A Wal-Mart on the site of the fabled Ambassador Hotel?
It could happen. Now that the nearly decade-long legal battle over the Ambassador Hotel site finally has been settled, its owners are revisiting their original designs to redevelop the 23-acre Mid-Wilshire property.
The owners, a partnership led by real estate mogul Donald Trump, are no longer contemplating building the mixed-use skyscraper they envisioned for the site in the late 1980s. Instead, they are exploring the possibility of building a lowrise, 1 million-square-foot “power center” retail project on the site of the legendary hotel.
Ted Slaught, senior managing director at the Charles Dunn Real Estate Services Inc., said that the owners are in discussions with a number of “big-box retailers.”
He wouldn’t name names, but stores like Wal-Mart and Home Depot fit into this category. Theme restaurants and multiplex theaters might also be part of the project.
Slaught, who has been working with the owners on the site for the past eight years, said the developers will have a more concrete proposal for the property after they’ve gauged tenant interest. The owners expect to submit plans to the city this spring, he said.
The Ambassador Hotel is located in a lackluster Mid-Wilshire office market, which stretches from Alvarado Street to Western Avenue.
The neighborhood is an untapped retail gold mine, Slaught said. About 1 million people live within a three-mile radius of the Ambassador, and the average household income is $50,000 within a five-mile trade radius (skewed upward because the affluent Hancock Park and Country Club Park neighborhoods are nearby), according to Slaught.
“A lot of people think of post-riot, war-torn L.A. when they think of Mid-Wilshire,” Slaught said. “But really it’s the center of multi-ethnic, economically vibrant L.A.”
The Ambassador, with its famed Cocoanut Grove nightclub, was the place to be seen during Hollywood’s Golden Era. It has served primarily as a film location while the owners and the L.A. Unified School District battled over the worth of the property. The dispute stemmed from the district’s 1990 decision to build a Mid-City high school on the portion of the site, an idea that was later dropped.
Plans to demolish the hotel, however, could provoke opposition from preservationists. While the hotel is not a registered historic landmark, it has significance because of its Hollywood history and also as the site of Robert F. Kennedy’s assassination.
“Our obvious interest is to try to save the building as part of a larger development,” said Linda Dishman, executive director of the L.A. Conservancy. The hotel is set far back from Wilshire, she noted. “There’s a lot of acreage to work with there, and we’d love to sit down (with the developers) and work out a win-win situation.”
Slaught said current plans call for demolition of the hotel, but that its “theme and artifice” might be incorporated into a new project.
On the development front
Developer Ira Smedra’s Arba Group broke ground last month on its 21-acre Hastings Village Shopping Center in eastern Pasadena. Smedra, the controversial developer who is best known as of late for his proposed Village Center Westwood retail-entertainment project, faced some contention with this 300,000-square-foot project as well. Neighborhood groups last year threatened to file a lawsuit, alleging that the project didn’t adequately assess the environment impacts. But the parties reached a settlement, allowing Smedra to begin construction on his open-air “power” center. Smedra expects the project to be complete by Thanksgiving
The largest retail project in Long Beach broke ground last week. Phoenix-based Vestar Development Co. started work on its 1.1 million-square-foot retail-entertainment center, located on the former site of the Long Beach Navy Hospital. The $70-million project will be anchored by a 26-screen Edwards Theaters megaplex and AutoNation, a car dealership.
In Century City, a proposed 38-story highrise office tower cleared a hurdle for development. The Planning Commission voted to approve AP Properties/JMB Realty’s skyscraper, provided that the developers scale back the project to 704,000 square feet and pay $6 million for traffic mitigation to nearby neighborhoods. Several local homeowner’s groups, however, have vowed to file a lawsuit against the Constellation Place development.
Office transactions
The investment sales side of the business also has been active in recent weeks, especially in downtown Los Angeles.
The 801 Figueroa office tower downtown and the Pasadena Hilton and its adjacent office building, at 150 S. Los Robles Ave., just traded hands as part of a national portfolio. San Diego-based Schiedler Group is under contract to buy the properties from the Octagon Group, an Indonesian-based investment group. Sources say that Schielder paid $250 million to $280 million for the entire portfolio, which includes several offices in Houston. The Schielder Group owns several properties in Orange County, but this will provide its first significant presence in L.A.
J.P. Morgan was originally believed to have the deal, but talks apparently fell apart last week. The 801 Tower, a 430,000-square-foot office building, is about 90 percent leased with the law firms Graham & James and Sedgwick Detert Moran & Arnold heading the tenant roster, according to Hayden Eaves of Cushman & Wakefield, who handles the leasing for the building.
The Hilton Office Tower in Pasadena is about 75 percent leased, and the 27-year-old building is generally considered a class-B building located in a class-A location.
And in a closed deal, Kennedy-Wilson Inc. purchased the Wilshire Bixel Building late last month for about $25 million. The L.A.-based investment group bought the 275,000-square-foot property from American Trading Co., which developed the building in 1986. The 1055 Wilshire Blvd. office, located on the west side of the Harbor (110) Freeway, is about 95 percent leased with the American Heart Association and John Hancock as major tenants, according to Richard Plummer of Cushman & Wakefield, who along with Wolfgang Kupka represented the seller. But one of the tower’s major leases Well Fargo Bank’s 100,000-square-foot space is going to roll one year from now.
Officials from Kennedy-Wilson couldn’t be reached for comment.
Bob Safai of Madison Partners, who represented Kennedy-Wilson in the deal, said the firm sees the purchase as “a great added value play.”
Staff reporter Joyzelle Davis covers the real estate industry for the Los Angeles Business Journal.
