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Tuesday, December 6, 2004
Major Mixed-Use Project Planned
for Pantages Area
turning away developers for more than two decades, the family that owns
the Pantages Theatre is planning a $300 million entertainment-themed development
that would surround the Hollywood facility.
A deal with an unnamed New York developer could be reached within weeks for a mixed-use project that would contain entertainment, housing and subterranean parking, among other possible features, said Neil Papiano, an attorney representing Nederlander Producing Co. of America Inc.
It would dovetail with other large housing, retail and hospitality developments already under way in the area surrounding the intersection of Hollywood Boulevard and Vine Street.
James M. Nederlander, who runs the family company that owns the Pantages and several acres of surface parking lots along Hollywood Boulevard, wants to redevelop the stretch east of Vine Street as an entertainment and theater destination, said Papiano, a partner at Iverson Yoakum Papiano & Hatch.
Until now, no developers proposal has measured up to his vision. But nearby projects have taken root, and changed the outlook for the type of project Nederlander has in mind.
Adjacent to the site, Dallas-based Gatehouse Capital Corp. and Foster City-based Legacy Partners Inc. are seeking final approvals to develop a $325 million complex of housing and retail anchored by a nearly 300-room W Hotel. Condo conversions at the Equitable Building and the Hollywood & Vine Plaza are also under way.
In April, Nederlander hired the New York-based real estate investment firm Holiday Fenoglio Fowler LP to recruit developers, and the proposal from the New York developer has emerged as a frontrunner. A contract could be in place within six to eight weeks, Papiano said.
The developers proposal calls for a $300 million mixed-use project with shops, restaurants, housing and an expansive underground parking garage, according to attorney Benjamin Reznik, a partner with Jeffer Mangels Butler & Marmaro LLP, who is representing the New York developer.
Nederlander, whose company owns 26 theaters worldwide, is also interested in a boutique hotel and possibly a second live theater for plays. Papiano said Nederlander recognizes that putting all those pieces together into one development may not be feasible yet.
Reznik said neither the hotel nor the live theater is in the developers current proposal but he said each could still be added. Right now everything is conceptual to make sure everything is economically viable, he said.
Both attorneys said their clients believe a deal could be reached between the Nederlanders and the developer within weeks. I personally believe we could have an agreement by the end of the year, Papiano said. That being said, (Nederlander) has waited this long so I dont think were in any sort of rush either.
Nederlander, who runs the company with his son, is not interested in selling any of his property and, because he wants to retain control over the development of the site, he will only consider entering into long term land leases. He did not respond to a request for an interview.
Beyond the surface parking lots, the Nederlanders own a patchwork of properties extending east along Hollywood Boulevard from the Pantages that includes the Henry Fonda Music Box Theatre and the Hollywood Palladium.
The family also owns the Wilshire Theatre in Beverly Hills and has a long-term lease with the city of Los Angeles to operate and manage the Greek Theatre in Griffith Park. Though the company is mostly based in New York, it is co-headquartered in Hollywood, the site of its concert promotion division.
Over the past six years, Nederlander has had about five serious offers to develop its Hollywood Boulevard parcels. Two years ago, a developer proposed building a Hard Rock hotel. Last year another developer wanted to blanket the lots with condominiums and apartments.
But Nederlander feels housing should be off Hollywood Boulevard, Papiano said, toward the rear of any proposed development. Anything on the boulevard should all be entertainment-related or commercial-related.
Until now, this agenda may have been economically unfeasible. But with the large number of apartments and condominiums under development nearby, an active restaurant and club scene, and the W Hotel going up across the street, that situation has changed, Papiano said.
I get the feeling people out there looking at this feel more confident of what he has in mind than they did previously, he said. The kinds of proposals we get now are much closer to his original vision.
Because so many developers had unsuccessfully courted the Nederlanders, builders and civic leaders said they had written off any construction for decades. For that reason, officials at the citys Community Redevelopment Agency were surprised when Joseph Morningstar, a senior managing director at Holiday Fenoglio Fowler, notified them Nederlander had retained the firm. So were officials in the office of Councilman Eric Garcetti, whose 13th District includes the site.
Its more than they have ever done before, said Josh Kamensky, Garcettis press deputy. No one has been courted by more convinced suitors than the Nederlanders. Now, however, they are the ones pitching the idea of developing those parcels so theres a sense its more serious than it has ever been before.
Helmi Hisserich, deputy administrator for the CRAs Hollywood region, said Nederlander had always wanted to develop the area to build more parking for the Pantages and give theatergoers more activities once shows let out.
Hisserich said construction on the Hollywood & Vine project that features the W Hotel could begin in 2006 and take two years to complete. She said it was feasible Nederlander could begin construction on a project by that time as well.
Its doable, totally doable, she said. Weve always anticipated there would be higher density development at Hollywood and Vine.
Still, Papiano said Nederlander hasnt signed an agreement and could still decide to hold off on developing the land. He takes the long view, Papiano said. He didnt buy all this land to develop it and make some quick money. Hes in it for the long haul.
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