Merchants Win Delay on Hotel Plan

After a barrage of criticism from local business leaders, the Los Angeles Board of Harbor Commissioners voted Wednesday to delay action on a proposal to build a shopping center and 200-room hotel at the World Cruise Center near the entrance to the Vincent Thomas Bridge.

In agreeing to the postponement, the commissioners decided to conduct a special session on the proposal sometime before their regularly scheduled meeting on Oct. 15. No date was set, but board President Jun Mori asked merchants and residents to submit written comments to the commission as soon as possible.

Merchants and leaders from several business organizations appealed to the board to consider the development’s effect on businesses in downtown San Pedro and in the Ports o’ Call seaside village before endorsing a staff recommendation that it be forwarded it to Mayor Tom Bradley for approval.

“People in San Pedro are having a hard time now,” said Tony Katsaras, owner of a store at Ports o’ Call, who fears that the retail portion of the development will hurt business in other parts of San Pedro.

“We were not even considered in the staff report,” complained Rick Gaydos, president of the San Pedro Revitalization Corp., a city-funded group that he said will spend about $2.5 million in the next two years to upgrade downtown San Pedro.

Representatives from H.C.T. Inc., a Hollywood-based development company that proposed the hotel and shopping center, assured the commissioners that the project is intended to generate business, not siphon it from the downtown or Ports o’ Call areas.

Cyril Chern, vice president of the company, said waterfront developments in other major port cities such as Boston and Baltimore have increased business by about 45% within a five-mile radius of those ports. Chern estimated that the proposed hotel and retail development would bring about 2 million additional visitors to the port during its first year, and as many as 5 million within three years.

Chern said the retail portion of the development, set at 140,000 square feet in the company’s proposal, does not constitute a major shopping mall as some of the project’s critics contend. In an interview before the meeting, Chern said the size of the retail development is “negotiable” if the Harbor Department concludes it is too large, but he said some retail space is necessary to make the project profitable.

The Ports o’ Call village has about 75,000 square feet of retail and restaurant space. In comparison, the Peninsula Center shopping mall in Rolling Hills Estates has 315,000.

“If you just have a hotel, you will be bankrupt within a year,” Chern said. “It is the mix that makes the project successful.”

In addition to the hotel and retail space, the $54.7-million H.C.T. proposal calls for a multiscreen cinema, an exposition center and 25,000 square feet of office space.

Also on hand at the board meeting were two local developers whose $27.5-million cruise-ship-shaped hotel proposal lost out to the H.C.T. proposal during reviews by the harbor department staff.

Potential Landmark

In a report to the commissioners, R. W. Kennedy, director of property management for the port, said the H.C.T proposal was chosen because, among other things, the design would be a “landmark and serve as an entryway to the Harbor,” would earn the port more money than the other proposal and would allow for “higher public-use potential” of the land. Kennedy also cited the company’s experience in managing multimillion-dollar projects and its capability of funding the project.

The board’s decision to delay action on the H.C.T. proposal, however, appears to have breathed new life into the cruise-ship hotel proposal, which for two years was considered to have the inside track for the World Cruise Center development.

Podesta-Moller & Associates, the San Pedro-based company that submitted the ship-shaped design, originally proposed that a hotel be included in the World Cruise Center, a complex under construction at the northern end of the main channel that will be able to accommodate five cruise ships when all three terminals are completed.

Limited Retail Space

Steve Podesta and Bill Moller, clearly disappointed that their company had been edged out by H.C.T., told the board that they intentionally limited the retail space in their proposal to protect San Pedro merchants. The Podesta-Moller proposal calls for a 240-room hotel, 10,000 square feet in restaurants and bars and less than 5,000 square feet in retail space.

“We thought it would tear apart the retail portion of San Pedro,” Podesta said of including more retail space in the proposal.

After the board’s decision to delay action on the proposal, Chern said he understood why businesses in San Pedro might worry about the proposed retail development, but he said he is confident merchants will support the proposal once they know more about it. He described Podesta’s and Moller’s comments to the board as “sour grapes.”

Moller said he was pleased with the delay because he said it is important that the community support whatever development is built at the cruise center.

“We want what is good for the community,” Podesta said.

When the board decides which proposal to recommend to Bradley, the approval process will have only begun, harbor department officials said. According to city policy, the recommendation must be reviewed by Bradley’s staff, approved by the mayor, and then formally approved by the harbor commissioners and the City Council. At that point, the Harbor Department will have the go-ahead to negotiate with the chosen developer.