The new owner of the Century Plaza hotel has revealed bold plans to demolish the renowned facility and replace it with two sleek skyscrapers containing condominiums, stores, offices and a smaller luxury hotel.
The Century City proposal comes during a crushing downturn in both the commercial and residential real estate markets. And the $2-billion plan, which has yet to make its way through the grueling city approval process, is sure to alarm many Westside residents, who say the area is already too crowded.
For The Record
Los Angeles Times Friday, December 19, 2008 Home Edition Main News Part A Page 2 National Desk 1 inches; 62 words Type of Material: Correction
Century Plaza: An article in Business on Thursday about a proposed development at the site of the Century Plaza hotel said the investment firm D.E. Shaw is among Wall Street hedge funds affected by the alleged $50-billion fraudulent investment scheme run by Bernard L. Madoff. The company says it conducted no business with Madoff and has no exposure to the alleged fraud.
The 726-room Century Plaza has played host to U.S. presidents, rock stars and business moguls, and served as the location for countless galas and social functions since it was completed in 1966 as the centerpiece of an office, retail and residential development carved out of the former back lot of the 20th Century Fox film studio.
For many years the Century Plaza's doormen wore red Beefeater costumes. The hotel's ballrooms welcomed high-profile events, including an opening charity gala in 1966 emceed by Bob Hope, who with singer Andy Williams entertained the likes of Ronald and Nancy Reagan and Walt and Lillian Disney.
President Nixon hosted a state dinner there in 1969 for the Apollo 11 astronauts after their successful journey to the moon. In 1995, Hollywood studio head and notorious embezzler David Begelman committed suicide in a room at the hotel.
The architect was Minoru Yamasaki, who also designed New York's World Trade Center towers.
The proposal by Los Angeles developer Michael Rosenfeld, who bought the property for $366.5 million in May, calls for razing the 19-story arc-shaped hotel on Avenue of the Stars and erecting two 50-story towers in its place. At 600 feet, they would be the tallest buildings in Century City and among the tallest in the region, with 293 condominiums, 100,000 square feet of office space, 106,000 square feet of retail space and a 240-room luxury hotel.
Unlike the existing hotel, the new Century Plaza would actually have a plaza -- two acres of public space with fountains and gardens.
The proposal won praise Wednesday from Los Angeles Mayor Antonio Villaraigosa, who through a spokesman said it could "transform an aging hotel into an iconic destination and a state-of-the-art, mixed-use development in the heart of our Westside."
But the development is certain to face scrutiny from neighbors worried that the Westside is becoming overbuilt. Traffic is already a nightmare much of the time, and city resources such as water and emergency services are stretched to their limits.
Some opponents signaled that they would fight to protect the existing hotel.
"We're seeing an assault on the '60s," said Linda Dishman, executive director of the Los Angeles Conservancy and one of several preservationists who increasingly are focusing their efforts on structures from the 1960s imperiled by new development. "If you look at Los Angeles in the '60s, the Century Plaza was one of the most significant projects," she said.
Rosenfeld faces the worst climate for real estate since the early 1990s.
The D.E. Shaw Group, Rosenfeld's financial partner in acquiring the hotel, will back the new development, said Francis Cappello, a senior vice president at D.E. Shaw, an international investment firm.
But the firm is among large Wall Street hedge funds caught up in the scandal around the $50-billion fraudulent investment scheme allegedly run by former Nasdaq chief Bernard Madoff, and has stopped redemptions of some of its funds. Cappello could not be reached for comment late Wednesday, but Rosenfeld said the firm's real estate fund was not one of the affected funds. "This is wholly unrelated," he said.
Rosenfeld has a strong track record in large-scale projects. His real estate investment company, Woodridge Capital Partners, has substantial hotel, residential and office assets in the U.S. and Canada, including a 3.5-million-square-foot, mixed-use project being developed in Calgary. Last year he sold the luxury Carlyle condominium tower under construction on Wilshire Boulevard near Westwood for almost $150 million.
By the time the new Century Plaza project is completed in 2015, Rosenfeld said, the economy is likely to have turned around. "This is a great opportunity to plan for the future," he said.
Stan Ross, chairman of the USC Lusk Center for Real Estate, said getting rolling on a major development in the midst of a downturn made sense in some key ways. Developers can negotiate favorable terms for construction materials and labor, he said, and lock in financing at favorable rates if it is available.
Under Rosenfeld's proposal, the Century Plaza hotel would continue to operate throughout the city approval and planning process, which Rosenfeld estimates would take as long as three years before demolition and construction could start.