Hoteliers Have No Reservations About Koreatown

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Koreatown has emerged as a nightlife hot spot over the past several years, and now boutique hoteliers are jumping in. They’re aiming to make it a destination where visitors can stay more than just a few hours while they enjoy drinks and Korean barbecue.

Two boutique hotels opened in the past few months in the center of Koreatown, citing a lack of major competition nearby. Being in a neighborhood that Korean investors are familiar with also makes it easier for hoteliers to fund their projects.

New York’s Sydell Group soft opened its 12-story, 388-room Line hotel last month. Backed by Ron Burkle’s Yucaipa Cos., the hotel, at Wilshire Boulevard and Normandie Avenue, strives for the boutique moniker through its design rather than size. It tapped celebrity Korean-American chef Roy Choi to open one of the hotel’s restaurants, Pot.

Sydell bought the building for $35 million in 2011 from Majestic Towers and renovated it for about $100,000 a room. The hotel is scheduled to be completely open this spring.

Just north, at Sixth Street and Normandie, Orange County boutique hotel developer and operator Broughton Hotels opened Hotel Normandie in September. Broughton purchased the building in March 2011 for an unspecified amount and renovated the 94-room hotel for about $6 million.

Construction for a third entrant, Nest on Catalina, a boutique long-term-stay hotel four blocks east, is expected to start later this year. The proposed $25 million hotel, on Catalina Avenue between Wilshire and Sixth, will have 75 rooms.

Hospitality consultant Bruce Baltin of PKF Consulting USA’s downtown L.A. office said the boutique hotels have become popular in the entire city, not just Koreatown.

“Boutique hotels are starting to show up all over Los Angeles,” Baltin said. “Los Angeles has been getting a lot more recognition, even internationally, as a city with a diverse arts scene. It’s a city that really welcomes boutique hotels.”

Developers see the new Koreatown boutiques filling a demand that existing hotels there haven’t met.

Andrew Zobler, Sydell’s chief executive, said he chose the heart of Koreatown because of the area’s lack of full-service hotels. Both the Hotel Normandie and Line have more rooms than most of the existing hotels in the area, which range between 40 and 90 rooms.

“There are not that many hotels on Wilshire Boulevard,” Zobler said. “There’s a four- or five-mile gap where you don’t have full-service hotels.”

Hotel developers expect their rooms to be filled with South Korean travelers drawn in large part by the significant number of Korean businesses in the market.

In fact, at least one hotel – Line – found backing from South Korean investors. It used the government’s EB-5 program, which grants green cards to individuals who invest $1 million in American projects that create 10 permanent jobs.

Line’s Zobler declined to say how much money his project raised from EB-5.

Beyond the Korean connection, developers find the location is attractive because of its proximity to both downtown and Hollywood. Hotel Normandie and Line are both within walking distance of the Wilshire-Normandie subway station and the Metropolitan Transportation Authority has plans to extend rail lines further west in the coming decades.

“We’re right on the Metro stop,” Zobler said. “You could be at Hollywood and Vine in 12 minutes or so. It’s one of the few places in the city where having a car might not be an advantage.”

The area has also become a nighttime destination with clubs, Korean spas, restaurants and bars.

“The one thing I like about Koreatown, it really does feel multicultural,” Broughton said. “I’m excited there are so many restaurateurs that are looking at Koreatown and I’m hoping it becomes the next foodie neighborhood.”

Still, despite the recent improvements, Zobler said the challenge will be convincing potential guests who might not know about Koreatown.

“It is not a traditional hotel location for Los Angeles, so you have a bit more work to do,” he said. “You are convincing other folks and other people who want to stay in other places.”

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