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$664 two-skyscraper plan pits New York developer Philip Aarons against Hollywood history
The Capitol Tower building, home of the Capitol Records label and Capitol Studios, is pictured on September 28, 2006 in Los Angeles. Photo: Tim Rue/Bloomberg News.

By: John Gittelsohn

LOS ANGELES (BLOOMBERG).- A proposal for Los Angeles towers as tall as 55 stories near the iconic Capitol Records building, where stars from Frank Sinatra to Taylor Swift recorded hits, is pitting a New York developer against defenders of old Hollywood.

Philip Aarons, co-founder of New York-based Millennium Partners, is proposing a $664 million, two-skyscraper complex with as many as 492 apartments and condominiums, 200 hotel rooms, a health club, offices and retail space near the intersection of Hollywood Boulevard and Vine Street, where John Lennon and Audrey Hepburn have stars on the Walk of Fame. The taller of the two towers would be almost twice the height of Hollywood’s next biggest building, and dwarf the 13-story Capitol Records property next to the site.

“This project is right for Hollywood because it’s a city of fantasy and spectacle,” Aarons said in an interview at his 10th-floor office, which has views of the Hollywood sign and Capitol Records building, a 1956 tower resembling a stack of vinyl records. “Its history comes from thinking big.”

While Aarons’s plan meets a Los Angeles city goal of increasing density near mass transit hubs -- the project site is near an existing subway station at Hollywood and Vine -- the towers would blot out views and aggravate congestion in the historic district, said Bill Zide, a screenwriter and producer who serves on the Hollywood Studio District Neighborhood Council, which voted against supporting the project last month. The 90 neighborhood councils across Los Angeles advise city officials on issues such as transportation, crime and development.

‘Alien Implant’
“It’s like an alien implant,” Zide said in a telephone interview. “It’s so disproportionate to everything else.”

The so-called Millennium Hollywood project, which was approved today by the city’s planning commission, comes as Los Angeles experiences an apartment and hotel construction boom following the worst property crash since the Great Depression.

Builders obtained permits in 2011 and 2012 for 16,042 multifamily units in Los Angeles County, more than three times the number of single-family permits in the two-year period, according to the California Homebuilding Foundation, a Sacramento-based research group. In downtown Los Angeles, Korean Air Lines Co. is planning an 1,100-foot (335-meter) hotel-office tower that will be the tallest in the western U.S.

Hollywood, six miles (10 kilometers) northwest of downtown, has more than 2,000 new apartments under construction or set to begin development in the next two years, said Leron Gubler, chairman of the Hollywood Chamber of Commerce and a supporter of the Millennium Hollywood project.

Lennar Project
Those developments include the 1,000-unit Blvd 6200, being developed by DLJ Real Estate Capital Partners and Clarett West Development, which broke ground in October a block east of Hollywood and Vine, and a proposed 76-unit building on Highland Avenue near Sunset Boulevard that would be homebuilder Lennar Corp.’s first apartment project in the West.

“One of the reasons we have so much congestion in Los Angeles is because it’s a horizontal city, not a vertical city,” Gubler said in a telephone interview. “If Los Angeles is ever going to change that paradigm, now is the time to do it in a few core areas.”

The Millennium Hollywood is the first Los Angeles project by Millennium Partners, which has developed $4 billion of real estate in New York, Miami, Boston, San Francisco and Washington since 1991. Its Manhattan developments include the Park Millennium and Grand Millennium near Lincoln Center, and Millennium Tower Residences in Battery Park. In Boston, it’s redeveloping the Filene’s department-store site into a mixed-use tower with 500 residences. In San Francisco, it’s planning a tower with 215 condos and a new home for the Mexican Museum.

Altering Skyline
“All of our projects altered the skyline,” Aarons said.

Millennium and Argent Ventures LLC bought the Capitol Records building and neighboring properties for about $50 million in 2006 from EMI Group Plc, which was Capitol’s parent at the time and was purchased last year by Universal Music Group. Capitol Music Group is the tower’s sole tenant.

At 585 feet, the taller of Millennium’s two Hollywood skyscrapers would overshadow both Capitol Records and the district’s tallest building, the 20-floor Sunset Vine Tower that was remodeled in 2010 by CIM Group and is on the market.

“It’s short by Millennium standards,” Aarons said of his project.

Aarons has been wooing Los Angeles officials and community groups as he seeks support for the Millennium Hollywood.

Project Architect
He hired William Roschen, a planning-commission member, as a project architect charged with blending the new and existing elements of the 4.5-acre (1.8-hectare) site. Roschen, now the panel’s chairman, said he’s recused himself from commission decision-making on the Millennium plan and declined to comment further on the project.

Aarons is chairman of Friends of Hollywood Central Park and donates office space to the group, which wants to build a public park above the Hollywood Freeway between Santa Monica and Hollywood boulevards. Aarons also was the founding chairman of the Friends of the High Line, which supports the elevated park on Manhattan’s West Side that helped spur a real estate boom in Chelsea and the Meatpacking District. The High Line’s reliance on private funding for maintenance and operations is a model for the Hollywood park, Aarons said.

While the freeway park proposal has won fans -- and will take years to build -- the Millennium Hollywood, which may begin construction as soon as next year, faces growing community opposition. More than 1,000 people signed an online petition against the project that was started by Hollywood Hills residents, and only one of the four Hollywood-area neighborhood councils is supporting it.

Size Restriction
The Hollywood site has a restriction of the total ratio of square footage to land of 4.5 to 1. The ratio can be increased to 6 to 1 with city approval, allowing 1.17 million square feet of floor area. That change was considered today by the planning commission. Millennium also sought permission to reduce the number of parking spaces, hold outdoor events and serve alcohol. Final approval from the city council and mayor is needed as well.

Tall, narrow towers will allow more street-level space for cafes, stores and performance space while providing less view obstruction than short, stout buildings, Aarons said.

Hollywood Sign
“We’re concerned that once they start building stuff this big, it’s just going to grow,” Bryan Cooper, president of Hollywood Heritage Inc., a movie-history museum and historic- preservation group, said in a telephone interview. “People have been able to see the Hollywood sign and the surrounding topography since Los Angeles was first developed. While we support many aspects of this project, we think those two towers are going to be eyesores.”

Orrin Feldman, an attorney who serves as vice president of the Hollywood Hills West Neighborhood Council, said Millennium’s plan lacks specifics, including a thorough study of its impact on traffic and air pollution.

“This fails the initial junior high school show-and-tell test,” he said in a telephone interview. “It’s a request for a free pass without community or city council review. It’s chutzpah.”

The request for project approval leaves room for alterations without extensive public review, according to Laurie Becklund, a Hollywood resident and former Los Angeles Times reporter.

Budget Crisis
“I’ve come to see it as an outgrowth of a perfect civic compost: a city budget crisis, mayoral politics, an understaffed newspaper stretched too thin to fully scrutinize the project and New York developers who specialize in ‘public-private partnerships,’” Becklund, a senior fellow at the University of Southern California Annenberg Center on Communication Leadership & Policy, wrote in a Times op-ed piece today.

The jobs and residences at the Millennium would allow more people in Hollywood to give up their cars for bicycles or public transit, Aarons said. The project will have a “less-than- significant impact” on trips added to the Hollywood Freeway, according to an environmental impact report that Millennium submitted to the city.

That assumption is disputed by the California Department of Transportation.

“The conclusion is not based on any credible analysis that could be found anywhere” in the report, Dianna Watson, Caltrans’s branch chief for regional planning, wrote in a letter to the planning commission.

Left Room
The vice president of the Central Hollywood Neighborhood Council, the only council that supported the project, is Laurie Goldman, who works as a community-relations consultant for Millennium. Goldman, also president of Friends of Hollywood Central Park, said she left the room when her neighborhood council discussed the project.

The Hollywood Millennium will help attract higher-end stores to a stretch of Hollywood Boulevard that has too many tattoo parlors, sex shops and hookah bars, Goldman said.

“I was listening to the Starline tour guide, trying to hustle people onto the tour, and he said, ‘Welcome to the Walk of Shame,’” she said in a telephone interview. “Because it’s like a dead zone there.”

The two candidates in a May 21 runoff for mayor -- Eric Garcetti, a city councilman whose district includes the Millennium Hollywood site, and City Controller Wendy Greuel -- have said they have concerns about the Millennium.

Hollywood Landscape
“I do not support the project as it is currently envisioned because the proposed height is out of scale with the Hollywood landscape and does not have a broad enough level of support throughout the community,” Garcetti said in a statement to the planning commission today.

Mayor Antonio Villaraigosa, whose term ends June 30, favors the project because it creates public space, as well as housing and jobs near a transit center, said Peter Sanders, a spokesman.

“By building tall, the developers are going to be able to open up the ground-floor area for open space -- a rarity in Hollywood -- while preserving the iconic Capitol Records building,” Sanders said.

The construction will probably force a halt to recording work at Capitol Records for months, according to Elliot Scheiner, a recording engineer and producer who has worked with Queen, Beck and the Foo Fighters in the building’s underground studios and echo chambers, which he said are the best facilities of their kind in the U.S.

‘Affect Everything’
“I have to believe it’s going to affect everything they do at Capitol,” Scheiner said in a telephone interview from his home in Redding, Connecticut. “History’s been made in those studios, and history should continue to be made there.”

Capitol Music Group is working with Millennium “to assure that the studios and the echo chambers will not be affected by the development,” Maureen Schultz, a Capitol senior vice president, said in an e-mail.

Aarons said he expects people to appreciate the project after it’s finished.

“I understand people’s nervousness,” he said. “Change is never easy.”

©2013 Bloomberg News

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