The Chinese owners of a former department store site in Beverly Hills — long considered one of the region's most desirable development locations — are proposing to add a top-of-the-line hotel in their planned $1-billion condominium complex.
Wanda Group, which bought the property at 9900 Wilshire Blvd. last year, said Wednesday that it planned to reduce the number of condos in the development, designed by Getty Center architect Richard Meier, to make way for a luxury hotel.
Beverly Hills is one of the top U.S. hotel markets and could absorb a new luxury entrant without difficulty, hospitality consultant Bruce Baltin of PKF Consulting said. The luxury hotel market suffered badly in the last economic downturn, but room rates have since risen to all-time highs, Baltin said.
"L.A. is getting to be more of a world city and getting more international business," Baltin said. "Our rates are reasonable compared to the rest of the world."
Top hotels in Beverly Hills were nearly 80% occupied last year and charged guests an average of $453 a night, according to PKF. Baltin predicts that by the end of this year the average daily rate will rise to $480, a number unlikely to make well-heeled travelers balk. Five-star properties in the area include the Peninsula Beverly Hills, the Montage Beverly Hills, the Beverly Hills Hotel and the Hotel Bel-Air.
The planned development, now called One Beverly Hills, is next door to the venerable Beverly Hilton Hotel and a new Waldorf Astoria hotel under construction at the intersection of Wilshire and Santa Monica boulevards. The Wanda hotel would be on the south side of One Beverly Hills facing Santa Monica Boulevard.
The 134-room hotel would be operated by Wanda Group, which is China's largest commercial property developer and the owner of the AMC theater chain. Wanda already operates 71 hotels, almost exclusively in China.
Condo development at 9900 Wilshire was approved by the city a decade ago, but the proposal to include a hotel in the project will require the developers to go before city officials again. The developers hope to secure permission for the altered project within 18 months and begin building it in early 2017. Construction would take at least two years.
The Wanda Group and partner the Athens Group, which developed the Montage Beverly Hills hotel and condos, hope city leaders will be persuaded in part by the prospect of additional public revenue from taxes the city charges hotel guests. The developers estimate that by eliminating 42 residences from the plan and inserting a 134-room hotel in the same space, the annual tax revenue generated from the complex for the city would rise $4.2 million to $6.9 million.
One Beverly Hills would have 193 residences. The height and density of the project would not change from the approved design. A small collection of shops, however, would be eliminated, and the capacity of the underground garage would be increased from 802 parking spaces to 1,083 spaces.
The hotel would have a spa and a rooftop pool available only to residents and hotel guests. It would also have restaurants open to the public on the rooftop and ground level. There would be three-fourths of an acre of public gardens accessible from Wilshire Boulevard and Merv Griffin Way.
The eight-acre site was once home to a Robinsons-May department store, which has been demolished and leaves a gap in a block that could be considered the western gateway to Beverly Hills, said David Shu, general manager of Wanda Beverly Hills Properties, a subsidiary of Wanda Group.
The company hopes to become the world's largest operator of luxury hotels.
Wanda was founded in 1988 by Chinese billionaire Wang Jianlin and operates luxury hotels, commercial properties and department stores. It is active in entertainment, tourism and e-commerce. The company went public in 2014 and reported assets totaling $85.6 billion and annual income of $38.8 billion.
A Wanda hotel will be included in commercial developments the company has underway in Chicago; London; Madrid; and the Australian markets of Sydney and the Gold Coast south of Brisbane.
Wanda bought 9900 Wilshire for $420 million last year from a group of investors led by Hong Kong private equity real estate firm Joint Treasure International. Joint Treasure bought the property for $148 million in 2010 and announced it would build condos under the approved plan. An offer from Wanda to buy the property was too good for Joint Treasure to pass up, however.
For Wanda, the significance of the development extends beyond real estate. The company said last year that the project at 9900 Wilshire Blvd. would serve as its "first important step into Hollywood."
The development "is expected to aid China's entry into Hollywood's film industry and generally promote Chinese culture abroad," Wanda said at the time of the purchase. The company is building what it says will be the world's largest film and television studio on nearly 500 acres in Qingdao, China. It is set for completion in 2017.