A massive apartment and retail complex in the heart of Hollywood appears ready to rise from the dead.
Construction is to begin within a few months on Blvd6200, a proposed 1 million-square-foot mixed-used project that spans the north and south sides of Hollywood Boulevard a block east of Vine Street, after three years on death watch.
“I’ve worked on this project for about six years and I couldn’t be more excited about starting it,” said Frank Stephan, senior managing director for Clarett West Development in Los Angeles. “We’re pretty focused on starting before the end of the year.”
Blvd6200 would be the first of several high-profile projects in Hollywood to begin construction after being sidelined during the recession. An environmental review estimates that it will bring in more than 2,000 residents to live, work and shop in the neighborhood. That’s exciting for Kerry Morrison, Hollywood Business Improvement District manager.
“The key to a successfully revitalized (Hollywood) is people,” said Morrison. “We need more people living here.”
Blvd6200 was conceived by Clarett in 2005. But shortly after Clarett got its plans approved by the City Council in 2007, the real estate market began to slow and the project was put on hold.
In May, DLJ Real Estate Capital Partners, a real estate private-equity fund spun off of Credit Suisse AG last year that manages $4 billion, bought the project for an undisclosed price and kept Clarett on as the developer.
Blvd6200 will be a mixed-use six-story development with 1,035 apartments and 175,000 square feet of ground-floor retail space. It will take up 7.3 acres of land on both the north and south side of Hollywood Boulevard.
The developer is leasing the land from the Nederlander family, which owns the nearby Pantages Theatre. The land is now mostly used as parking for the Pantages.
Clarett is first developing the smaller portion of the project, on the north side of Hollywood. That will feature 535 residential units and 75,000 square feet of retail.
The ground floor will include retail and an interior courtyard open to the public. The apartments will be built in four five-story towers above the retail. Amenities, such as a swimming pool, will be on the second floor and accessible to residents only.
The second development would be a larger but similar project, with more retail, on the south side of the boulevard.
Clarett has not yet set a construction date for the second part of the development, but anticipates that it won’t begin until after completion of the first phase.
“We are staggering it,” said Stephan. “We wouldn’t want to deliver 1,000 units to the market all at once.”
Both sides of the project are entitled for some of Hollywood’s last approved supergraphics, those large advertisements on the sides of buildings. It received entitlements for seven supergraphics, for a total of 10,847 square feet between the two sides, with its approved application. The City Council has since banned supergraphics from Hollywood real estate.
Clarett has already received demolition and foundation permits, and has filed for final construction permits. The company hopes to bring in cranes by year’s end and complete the project’s first phase within 30 months.
Demands and benefits
Steve Algermissen, an executive vice president in Colliers International downtown L.A. office, said the project’s success will depend on the rental rates at the time. The uncertain economy and real estate market leave some question as to what kind of rents apartment buildings will be able to command two years from now.
“The perception is if it gets built, it gets leased,” Algermissen said. “It’s an accurate perception now, but we’ll see how things shake out.”
Stephan said it was too early to discuss specifics of the apartments or pricing. But there seems to be enough demand in the area to command competitive rates. Similar projects, such as the 270-unit Jefferson at Hollywood and the 375-unit apartment complex at 1600 Vine, are nearly entirely leased. Monthly rates for apartments in those projects run from roughly $1,500 to more than $3,000.
An environmental review for the Blvd6200 estimated that it would bring in 2,345 residents to Hollywood.
“We need daytime customers in the form of people working here and nighttime customers in the form of people living here,” Morrison said.
She also said the project is going to provide benefits to the Hollywood Business Improvement District even in the two years before those new residents show up.
“Seeing construction equipment come back is going to be a psychological boost to everyone,” she said.
Morrison said the construction of the W Hotel, which opened last year, provided such a sense of success to everyone in her organization that she made the picture of the construction cranes her computer wallpaper.
“It was a symbol of everything we had been working for, for so long,” she said.
Other construction projects in Hollywood waiting to get under way could also be boosted by the construction of Blvd6200. Some of the more notable among them include Millennium Partners and Argent Ventures’ proposed 1 million-square-foot mixed-use project that would include apartments, retail, office and a hotel near the Capitol Records Tower, and Champion Real Estate Co.’s proposed residential-retail project on nearly 3 acres of land at Highland and Selma avenues near Hollywood & Highland.
Delmar Nehrenberg, an L.A. real estate attorney at Allen Matkins Leck Gamble Mallory & Natsis LLP who represents construction companies in the area, said that those developers and others see some of their projects riding on the success of Blvd6200.
“They are watching this and are hoping it goes forward,” Nehrenberg said, “because it will give everyone momentum to get things rolling.”
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