The $201-million sale of the Hollywood & Highland retail, hotel and entertainment center closed Friday as the new owners announced plans for $20 million-plus in improvements to boost traffic year-round at the complex where the Academy Awards ceremony is held.
It was reported last month that the Hollywood Boulevard site would be purchased by CIM Group Inc. of Los Angeles from Trizec Properties Inc., a Chicago real estate investment trust.
The project was completed in 2001 at a cost of about $650 million, but it turned out to be a financial debacle for Trizec. In 2002 Trizec wrote down the value of its investment to about $200 million and announced its intention to sell the property.
Originally envisioned as an attraction for well-heeled foreign tourists, the center was hammered by the drop in tourism after the Sept. 11 terrorist attacks. The site also got mixed reviews for its design, which some visitors found confusing.
The development did succeed in bringing the annual Academy Awards ceremony back to Hollywood and helped attract other large investors to the area.
"It has been a godsend to Hollywood," said real estate broker John Tronson of Ramsey-Schilling Co. "Everybody benefited from it except Trizec."
With the purchase of Hollywood & Highland, CIM Group now owns 1.7 million square feet of commercial property in eight Hollywood properties, most of which surround the historic Grauman's Chinese Theater. The company's strategy is to find uses for its buildings that also will appeal to Los Angeles residents, instead of only tourists, said Avi Shemesh, who co-founded CIM Group with fellow Israeli immigrant Shaul Kuba.
The owners have not selected an architect to make improvements at Hollywood & Highland, but they expect to make architectural changes, along with adding escalators in key locations, new lighting and video screens.
CIM Group will work with tenants to help them adjust their merchandise to target local buyers and may bring in other restaurants, Shemesh said. The company also will try to draw more attention to its anchor tenant, the movie theater complex, which Shemesh said is underutilized.