Beverly Hills has long afforded companies a platinum-plated address with amenities to match -- top-notch restaurants, hotels and boutiques in a walkable environment.
The city has attracted such prestigious businesses as MySpace, Live Nation, Platinum Equity and talent agencies William Morris and the Firm.
For The Record
Los Angeles Times Friday, June 26, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 39 words Type of Material: Correction
Beverly Hills office space: An article in Thursday's Section A about commercial office space in Beverly Hills said Platinum Equity had bought auto parts supplier Delphi Corp. Platinum is seeking to buy Delphi, but the transaction has not closed.
But in recent years Beverly Hills has suffered the loss of three high-profile companies: Creative Artists Agency and ICM, talent agencies that migrated to Century City; and Hilton Hotels Corp., which moved to Virginia after being acquired by Blackstone Group.
Conscious of those departures, the city has zeroed in on a new trend in commercial buildings that officials fear could hamper its ability to lure more big companies.
The trend is the move toward converting leased buildings into "office condos" in which square footage would be owned by the commercial entities that occupy it. Building owners who have embraced the concept say the strategy allows companies to build equity, much as residents (in good economic times) benefit from condo ownership.
But city officials fear that these "commercial subdivisions" could cost the city money in lost tax and fee revenue and make it more difficult to consolidate space for big employers.
"We are trying to attract large corporate tenants that would need more floor area," said Susan Healy Keene, the city's new community development director. "If we have a number of buildings that subdivide, that could make consolidation of those spaces more challenging."
With that in mind, the City Council voted this month to begin a public process to determine if office condos are a good strategy for the city or if they afford greater benefits to the property owners at the city's expense. The first hearing will be before the city's Planning Commission on July 23.
So far, the city has approved two "common interest subdivisions of commercially zoned property," Keene said.
The owner of the Flynt building on Wilshire Boulevard won city approval for a conversion but let the option expire without making the switch. Last October, the city approved a commercial subdivision for a medical building on North Robertson Boulevard.
"We anticipate more of these applications, so we're giving the council and the Planning Commission the opportunity to evaluate the process and options," said Cheryl Friedling, a city spokeswoman. "It's a robust opportunity to identify how they want to see the city move forward."
