Earlier this year, Los Angeles city leaders sold an old fire station to a developer with plans to remake a Studio City landmark — the rustic collection of ballrooms and banquet halls known as Sportsmen's Lodge.
Once a hangout for Hollywood stars such as John Wayne and Bette Davis, later a go-to spot for political events, the woodsy lodge has long hosted bar mitzvahs and weddings, even the reception for Ronald and Nancy Reagan.
Now there are plans to turn the storied spot into Sportsmen's Landing, an upscale commercial hub with shops, restaurants and a fitness center along a narrow stretch of the Los Angeles River.
But as plans for the 21st century makeover move forward, some critics who fear the redevelopment will worsen parking and noise have begun questioning how and why the fire station sale happened. Beyond the debate in Studio City, the deal has focused fresh scrutiny on how Los Angeles decides what to do with old buildings and land it no longer uses.
The property was first appraised by the city in 2008 at more than $1.7 million, then $1.5 million, before a third study was done and the price was negotiated to roughly $1 million. When the economy soured and the developer couldn't come up with the money, the station remained unsold for years before city officials revived the deal.
"Why would they hold a property so long for one person when they're screaming, 'We don't have money for policemen'?" said Victoria Shulem, a resident concerned about the project.
City officials say it made sense to sell the small parcel directly to the developer, rather than putting it up for auction because it's next to his planned project. Ian Thompson, spokesman for Councilman Paul Krekorian, who represents the Studio City area, said the sale "absolutely allows for the best use of this property." The fire station was ultimately sold for slightly more than it was valued in another, lower appraisal years later, he said.
The sale "also prevented the property from potentially being converted into a high-density housing project that would not fit with the character of the community," Thompson said in a statement. Nobody else inquired about the property, but such development is happening throughout the city, he said.
Los Angeles city codes outline a process for selling unused property, including obtaining an appraisal. State law also requires local governments to first offer to sell or lease such properties to other public entities, which L.A. did with the fire station. But the city does not always explain why it decides to sell a property through a direct sale, rather than by auction.
The odyssey over the Studio City parcel began years ago, when developer Richard Weintraub bought the Sportmen's Lodge. Weintraub, who is also leasing the neighboring Sportsmen's Lodge hotel, also sought to buy the abandoned fire station. Seven years ago, city officials decided to sell him the adjacent property instead of conducting a public auction.
Officials with the Department of General Services did not respond to questions about how the price of roughly $1 million was reached, other than to say it had been negotiated. City appraisals, obtained by Studio City writer and former City Council candidate Eric Preven through a public records request, show big changes in the estimated value: Los Angeles officials first got the property appraised at more than $1.7 million in 2008. Later that year, the same appraiser reduced his appraisal to $1.5 million.
Meanwhile, the developer had gotten an appraisal of less than $900,000 for the property, according to Aaron Green, a consultant working for Weintraub. Before the price was settled, city officials obtained yet another appraisal, this time from a different firm that pegged the value at about $1 million.
But at the time, Weintraub was "unable to secure financing" because of "the dire economic times," wrote then-Councilwoman Wendy Greuel, who was succeeded by Krekorian. The city gave him extra time to come up with the money, asking him to put 10% down to maintain the chance to purchase the property for a year.
Weintraub didn't put the money down, but the property remained unsold. Last year, Krekorian revived plans to sell the fire station to Weintraub at the same price. City officials said it was a good deal because a new appraisal pegged the value of the station lower than before. The city again obtained two estimates from the same appraiser: the first at $830,000, the second about $1 million — $5,000 less than the sale price.
Selling the property "is in the best interest of the city because it will eliminate costly maintenance of the city parcel," a report from City Administrative Officer Miguel Santana said.
Preven, who ran unsuccessfully against Krekorian this year, argued that the property had been "greatly discounted" from the original appraised value. Steven Quat, a Studio City Neighborhood Council member who is against the project, said the fire station should have been up for a competitive bid.
"It was a sweetheart deal," Quat said.
Jay Handal, co-chairman of the Neighborhood Council Budget Advocates, argued that the larger problem is that the city has not done enough to ensure that it gets the maximum possible value out of all of its excess properties.
"I just think there's no plan," Handal said.
Green, who is serving as a spokesman for the Sportsmen's project, said the sale "guaranteed the city would get full-market value, something that would not be guaranteed if this otherwise not very useful property had gone out to auction." He said it was widely agreed that "the best use for this very small piece of surplus property would be incorporation into the project."
Greuel, who first asked city officials to begin the negotiations over the firehouse, said the roughly 9,000-square-foot lot would not have been as valuable for someone who didn't own the adjacent land.
"It's surrounded by the Sportsmen's Lodge," she said.
Thompson said that Krekorian had considered turning the station into a district office or giving it to a nonprofit to use as a homeless shelter but found it would require costly renovations to make it usable.
A city commission allowed the project to move forward this year. Although the redevelopment project is backed by many area groups — including the Studio City Neighborhood Council, the Studio City Chamber of Commerce and the Studio City Business Improvement District — neighbors concerned about a parking crunch and other possible effects have filed appeals along with Ventura Boulevard Associates, which owns the hotel on the same site.
Green contended that the opposition had been drummed up by the hotel owners, who have been locked in a legal battle with Weintraub over the hotel lease. A council committee is expected to hear the appeals later this year.