Hotel Plan for Norwalk Faces Last Big Hurdle

For years this city has wanted a luxury hotel built at the former Henry L. Wright Elementary School site near the Civic Center.

The 20-acre site is right off the Santa Ana Freeway, just a stone’s throw away from City Hall, and one of the last large remaining parcels available for development in this 11-square-mile city.

But the dream for a first-class hotel almost turned into a nightmare, with four developers dropping out of negotiations for various reasons and the school district having to fend off a lawsuit from one of the developers.

Now it looks like the dream is edging closer to reality. The City Council will consider several planning and zoning approvals for a $70-million project at a 5 p.m. public hearing Monday. The approvals would represent the last major hurdle blocking the path of the project, which is now on its fifth developer. Construction could begin within a year after the approval of a development agreement, which may be considered by the council later this month.

“I’m hoping it will work,” said Mayor Robert White. “I really think this time it’s going to go. I’m tired of hassling with it.”

Concern Over Parking

Although the current proposal has received high marks from city officials, many are still concerned about parking because the project would come up more than 300 spaces short of city requirements.

Redondo Beach-based London Pacific Investments, which has agreed to buy the site from the school district for $9.1 million, has proposed a mixed-use development, which would include a 175-room hotel with restaurant and ballroom space, a movie theater, several retail stores, a six-story office building and a 168-unit condominium complex.

The development company has worked on the project for almost two years, investing close to $500,000 on design studies and plans. Its first plan met with resistance from both the Planning Commission and City Council.

During a public hearing in August, the commission rejected that proposal because of concerns over parking and design of the residential portion of the project. The developer appealed the commission’s decision to the council, which voted in September to send the proposal back to the commission.

A revised plan was submitted by the development company in January. It scaled down a proposed 232-condominium complex to 168 units, changed the layout of the residential portion of the project and provided additional meeting space in the hotel. The commission in February unanimously approved the plan, which would be the largest single project ever undertaken by the city.

“I don’t think I ever felt like giving up,” said Jules Walder, president of London Pacific.

$3,527,000 ‘Incentive’

Michael Wagner, the city’s director of redevelopment, said an agreement is currently being negotiated between the Redevelopment Agency and the developer. He added that a public hearing could be scheduled as early as March 23 to consider the agreement, which would provide $3,527,000 to the developer as an “incentive” for building the project. Such incentives are used by many redevelopment agencies to lure projects to a city. The Norwalk Redevelopment Agency would also loan the developer $500,000, which would have to be paid back within one year.

City officials say they are eager to make the project work, especially since a study commissioned by the city last month found that there is a growing demand for both hotel and motel space in Norwalk. But the study also pointed out that the most successful hotels are those owned by major chains, and Southeast Los Angeles County is rapidly approaching the saturation point on full-service hotels.

“If we wait two years from now, we might never have a hotel project,” said Councilman Cecil Green. “We have hotels going up all around us.”

Since 1979, when the school district first decided to sell the Wright school, the city has made it clear that it would like to see a hotel on the site.

“Everybody knew up front what the city expected to see there,” Green said.

The biggest obstacle that remains is parking.

City officials interviewed last week were concerned over the 938 spaces that the developer is proposing. The city codes require 1,300 spaces.

“I still have a problem with the parking,” said Councilman Marcial (Rod) Rodriguez. “It’s still 362 stalls short.”

‘Shared Parking’ Concept

London Pacific has proposed a “shared parking” concept, where the same spaces are used at different times by the various facilities on the site, such as the office building and movie theater.

But a proposal by Caltrans to widen the Santa Ana Freeway could affect parking for the hotel in the future.

Caltrans spokeswoman Margie Tiritilli said the state is conducting preliminary studies on the feasibility of widening the freeway from one to three lanes at various points. The freeway widening would take away land from the southern portion of the project’s site.

She said the Department of Transportation will present its findings to the public at a meeting in May. The department, she said, wants to take the path that is the “least disruptive to the public.”

In order to make up for any parking space that may be lost in the freeway widening, London Pacific has agreed to a contingency plan to install subterranean parking or a parking structure.

The proposal to build a hotel on the site also has proved frustrating for officials of the Norwalk-La Mirada Unified School District, which closed the Wright school because of declining enrollment and has seen four development proposals fall through.

The first developer to tackle the hotel project, Shapell Industries, entered into escrow to buy the property for $5.1 million in 1980 but pulled out of the deal because of high interest rates. The second and third developers, Eastern Global Corp. and Johnny Johnson, withdrew from the project because of difficulties in attracting a major hotel. A fourth developer, Trammell Crow, briefly considered developing the property but also pulled out.

Johnson also had proposed building a casino in conjunction with the hotel, and the city adopted, and later rescinded, an ordinance allowing a gambling parlor in the city. Johnson, who had an option to build a hotel after Eastern Global defaulted on an escrow payment, brought suit against the district and two developers in 1984, alleging that the district conspired with other buyers to cut him out of sale of the property. The district filed a countersuit against Johnson for holding up the sale of the property. The case was settled out of court last year.

“We’ve gone through a period of frustration over the years,” said Howard Rainey, administrator of business services, who noted that school district officials are optimistic over the current proposal.

“We obviously wish it was over a long time ago. I’d like to see it culminate so we could get on with other things,” he said.