Hilton Hotel Corp.’s name will no longer adorn L.A.’s new convention center hotel.
At a meeting in New York this week, Anschutz Entertainment Group Chief Executive Tim Leiweke let slip that his company had dumped L.A.-based Hilton in favor of Marriott International Inc.
Marriott plans to install a Marriott Marquis to handle convention goers and its Ritz Carlton brand for guests seeking higher-end services. The Ritz Carlton rooms will occupy the upper-most hotel portion of the 52-story tower, which will be topped-off by more than 200 condos.
KB Home, which is splitting the financing of the hotel with AEG and will sell the condo units, pushed for the change in brands, according to a source close to the decision.
The L.A.-based homebuilder believed it could get more for the condos if the hotel contained a Ritz Carlton and Marriott Marquis rather than a Hilton, the source said.
Calls to KB Home seeking comment weren’t returned. Hilton spokeswoman Kathy Shepard confirmed that Hilton is no longer involved in the convention center hotel project.
It’s unclear under what financial terms Marriott is taking over the hotel’s management contract. However, in addition to other incentives, Hilton had agreed to lend AEG about $30 million toward the project’s financing.
AEG spokesman Michael Roth said the company doesn’t comment on speculation and he couldn’t confirm Leiweke’s comments during the meeting.
However, a member in attendance at the New York meeting, where boosters were pitching Wall Street investors and developers on downtown L.A., confirmed Leiweke’s comments.
Leiweke told the group AEG is switching operators of the hotel, but said the identity of the new operator would be announced at a press conference in two weeks. However, during a slide show to the group, a rendering of the convention center hotel contained the Marriott and Ritz Carlton flags, according to the source at the meeting.
When Leiweke realized what happened, according to the source at the meeting, Leiweke said, “Oh well, I guess the cat’s out of the bag now” and continued on with the presentation, which included an overview of the company’s L.A. Live project.
The 1,100-room convention center hotel is the crown jewel of the L.A. Live project, which also includes a 7,100-seat theater, shops, restaurants, a nightclub, movie theaters and ESPN’s new West Coast broadcast center. The project is being built on the roughly 1 square mile of surface parking lots surrounding the Staples Center, of which AEG is the principal owner.
Checking Out
Hotelier Lew Wolff, who has built a number of hotels in the L.A. region, may be halting his long-time partnership with Philip Maritz.
The partners co-founded Maritz Wolff & Co., an L.A.-based firm that owns a portfolio of luxury resorts, hotels and office properties that is valued by Hoovers.com at $1.5 billion.
However, last week, Maritz agreed to lead a hotel team, consisting of former Maritz Wolff executives, for Broadreach Capital Partners LLC, which is branching out from its core strategy of turning around underperforming office buildings.
Maritz is bringing three senior executives from Maritz Wolff: Jeff Barone, Heather Castellari and Pat Lowery.
Under the terms of the deal, Maritz will continue tending to the existing Maritz Wolff portfolio but will make all new acquisitions through Broadreach Capital Partners and none through Maritz Wolff.
Wolff declined to discuss the matter and deferred all comments to Maritz, who was traveling abroad and unavailable for comment.
Since opening its L.A. office three years ago, Palo Alto-based Broadreach has been on a role, buying properties across the region.
In April, Broadreach paid $52 million for the CNN building, a 14-story tower at 6430 Sunset Blvd. in Hollywood. And in May the company sold a 104,000-square-foot office building at 3330 Cahuenga Blvd. for $30 million pocketing $9 million after owning the property for about 18 months.
Craig Vought, Broadreach’s co-founder and managing director, confirmed the addition of the Maritz Wolff team to HotelBusiness.com.
Broadreach has raised a $700 million fund to buy value-added and opportunistic properties those office buildings and hotels that can be fixed-up and re-sold for a quick profit.
As for Maritz Wolff, it owns 15 hotels, including the Fairmont Miramar hotel in Santa Monica, the Carlyle in New York and the Mansion on Turtle Creek in Dallas. The company also has a stake in several hotels managed by Fairmont Hotels & Resorts Inc. and co-owns Rosewood Hotels & Resorts LLC with Caroline Hunt, heir to late oil billionaire H.L. Hunt.
Still, Wolff has been branching out from the hotel trade. Last year he led a group of investors who bought the Oakland A’s baseball team.
Second Shot
With Whole Foods Market Inc. out of the picture, developer Larry Bond is pushing forward with a re-worked mixed-use project at Hollywood Boulevard and Garfield Place.
Bond Cos. sent out a letter to residents in the area bringing them up to date on plans for the redesigned Hollywood Garfield project. The four-story building will contain 108 units that could be rented or sold as condominiums.
The project which will be built on a vacant lot will also contain 5,000 square feet for retail stores that Bond says will be “neighborhood serving.” Bond still needs city approvals, but expects to break ground this year.
Neighborhood groups rebuffed an earlier plan to build a mixed-use project that contained a Whole Foods grocery store. The community worried about the increased traffic caused by the store, which residents believed would mostly draw wealthy patrons from the Hollywood Hills.
Garfield Place residents also didn’t like the idea of a loading zone off their street and residents were upset at what they perceived as a lack of parking. This time around Bond has included a smaller retail component and has promised to keep all services and delivery inside the project’s parking garage.
“We tried to address all the issues that were raised previously,” he said.
Bond is also including 180 off-street spaces, which he states is more than the maximum allowed by code and enough parking for residents and visitors, as well as all retail customers. “Neighborhood street parking will not be impacted,” he wrote.
The area has become a magnet for investment. In conjunction with the Community Redevelopment Agency of Los Angeles, a partnership of CIM Group Inc. and the Lee Group Homes LLC is planning a large mixed-use redevelopment project at the corner of Hollywood Boulevard and Western Avenue.
Staff reporter Andy Fixmer can be reached at
[email protected]
or at (323) 549-5225, ext. 263.
