Stalled negotiations have jeopardized plans for a nine-story, 209-room hotel and commercial complex that was expected to become a cornerstone of redevelopment near Hollywood Boulevard and Vine Street in Hollywood.
Talks between landowners and Days of the West Inc., a Sacramento-based hotel chain that was to construct the two-acre project at Vine Street and Selma Avenue, reached an impasse late last year, according to representatives of the two sides.
The deadlocked negotiators now say it appears less and less likely that the development will proceed.
'Just Stopped Talking'
"I thought we had a deal seven or eight months ago, then we just stopped talking," property owner Larry Worchell said Monday. "The door's still open, but I don't see this being developed real quickly. It may be that the price is too much" for the developers.
Jim Hansen, vice president of Days of the West, said the firm remains interested in the site, now a parking lot. But high land prices and construction costs make it doubtful the company can build the hotel and keep room rates within the chain's mid-level price range, he said.
The firm is now negotiating for an alternate site in Hollywood Plaza, a four-acre complex being planned for Hollywood Boulevard and Highland Avenue, Hansen said.
That project, near Mann's Chinese Theatre, would be located next to the 312-room Hollywood Roosevelt Hotel and a 468-room Holiday Inn. It also would border the proposed $150-million Melvin Simon complex, which includes plans for a 400-room hotel, an office tower and motion-picture museum.
"We're far from a deal at this point," Hansen said. "We're trying to find (a project) we can do. When one stalls out, you've got to start looking at another right away."
Vital to Redevelopment
Plans for a hotel complex near Hollywood and Vine would be significant for long-range growth under Hollywood's $922-million redevelopment plan, according to Hollywood-area Councilman Michael Woo, who led a push to adopt the plan a year ago.
The millions of tourists who visit Mann's Chinese Theatre each year usually are disappointed when they travel east to Hollywood and Vine, where nondescript storefronts and parking lots convey little of Hollywood's glamour, Woo said.
"I still think the area is ripe for some kind of quality development," the councilman said. "The question is whether this (project) is our best shot . . . or whether it could be some other project."
Days of the West, a franchise of the nationwide Days Inns hotel chain, proposed a nine-story hotel and a 35,700-square-foot office building surrounded by a plaza of restaurants and retail shops.
But company officials were unable to win a commitment from the city or its Community Redevelopment Agency to help pay for a $7-million parking structure that would serve the complex.
Without funding for the 465-space parking structure, the financial viability of the complex became clouded late last year, Hansen said.
In the meantime, landowners were reluctant to tie up the property for a year or two hoping that redevelopment officials would approve funding for the parking structure, said commercial real estate broker Paul Ramsey, who handled negotiations.
Rising land values since the project was proposed in late 1985 add further doubt that the complex will be built, Ramsey said.
"For the moment, we're not optimistic about it," he said. "There's some communication, but not a lot."
Worchell said landowners are considering other ways to use the property, possibly for an office complex or for an office-and-hotel complex. He said landowners could expand the two-acre site by bringing in adjoining parcels.
'Lot of Interest'
"We're talking about piecing together about six acres that are now under various ownerships," Worchell said. "There's a lot of interest . . . among developers."
Although land prices have risen dramatically in recent years, he said, anticipation of the 30-year redevelopment effort promises to keep values rising and to fuel investor interest in the Hollywood and Vine area.
A major project on the Selma Avenue site would "glue together" the historic intersections of Hollywood and Vine and Sunset and Vine, Worchell said.
"It's a matter of putting the right team together and the right concept together," he said. "Something will happen."