Whittier Spurns Renewal Project Near Hotel; It Isn’t Grand Enough

After more than a year of searching for a developer willing to transform a key downtown area across the street from the Whittier Hilton, the city’s Redevelopment Agency has rejected the only offer it received.

City Manager Tom Mauk said the plan now is to “brainstorm and start over with the process.” The City Council, acting as the Redevelopment Agency, directed the staff to re-examine possible uses for the area.

“You can study the thing to death, but the proof is in what developers actually want,” Mauk said.

However, in the case of a proposal from Relco Industries and Larry Sade, what developers wanted was not enough.

Relco, a Los Angeles development company, proposed building a one-story, 42,000-square-foot shopping strip anchored by a gourmet food market. The developers wanted the city to subsidize the project for $1.3 million--about 20% of its cost.

City officials said they didn’t want to pay that much, especially when they have expressed a preference for a larger project that includes both office and retail space. But Peter Novak, Relco’s executive vice president for development, said he doubts that the city can get what it wants.

‘Extraordinarily Speculative’

“Having done quite a bit of market study, we have concluded that at the moment, to do an office building in that particular area would be extraordinarily speculative,” Novak said. “Until and unless we are able to secure a tenant for a good part of an office building like that, I would not want to undertake such a venture in that location.”

Whittier Mayor Gene Chandler said the Redevelopment Agency voted this month to reject Relco’s proposal because it was “not dynamic enough.”

“When it’s done, we want to do it right, because it’s such a focal spot being across the street from the Hilton. We want to proceed, but we don’t want to put just anything in there to fill up the space,” Chandler said.

Novak said city officials seem determined to make office space a part of the project, but Chandler said the Redevelopment Agency isn’t locked into that idea. Chandler, though, said he would like to see a multistory development including offices, retail space and a “white tablecloth restaurant.” Such a project, he said, would generate tax revenue and bring people to the area.

There is an excess of available office space in Whittier, but Mauk said he hopes that a regional business, such as an insurance company, would occupy any offices built across from the Hilton and draw people from outside the area.

Mauk said developers have not been attracted to the block because it is miles from a freeway, is separated from Uptown Whittier and is relatively expensive at $25 to $30 per square foot for the land. Because of those factors, the city would be willing to subsidize the project, with the amount depending on the size and type of the development.

Novak said, in addition to the subsidy, “The city would have to discount the land significantly more if they wanted it to be developed for office (space) . . . . In real estate, it is very much a function of time. If one waits long enough, he will probably get his price, ultimately. The question is whether one can wait that long.”

Contrast in Land-Uses

The area is a priority for the council because of the contrast between the elegant eight-story Hilton at the corner of Penn Street and Greenleaf Avenue and the mismatched collection of businesses across Greenleaf.

The council’s expectations for the area were heightened by construction of the hotel, which opened last spring. City officials hoped that the redevelopment would increase land values in the surrounding area and help sustain an envisioned upscale shopping and dining area. Last year, the city mailed more than 100 requests for proposals to develop the block, but Relco’s was the only one submitted.

Despite not being close to a freeway and heavily traveled Whittier Boulevard, the 206-room Hilton has maintained an occupancy rate of at least 60% to 70% since a few months after opening last spring, said Melinda Johnson, sales manager for the hotel. About 85% of the hotel’s business comes from corporate travelers, although the Hilton is trying to build its tourist trade, she said.

Novak said a lack of tourism is a factor in developing the area, because guests traveling on business typically stay weeknights and are more likely to spend their time in meetings rather than shopping.

“It’s not a traditional business hotel and therefore its effect upon the immediate vicinity is somewhat different,” Novak said. “Blocks of rooms are taken out of circulation and they may be vacant for a while” because some businesses maintain several rooms continually to take advantage of a corporate hotel rate, he said. “It doesn’t provide the traffic to benefit the neighborhood.”

Liquor Store Poses Hurdle

Another obstacle to developing the block is The Uptown, a liquor store on the corner across from the Hilton. City officials say Vince Hayes and his family, The Uptown’s proprietors, have not been receptive to selling their 28,000 square feet of property at 7301 Greenleaf. Hayes declined to comment on the possible sale, saying only that the city’s intentions for the block are uncertain. He said that uncertainity has existed for the past 15 years.

Chandler said if the Hayes family won’t sell or become part of the development, the city may eventually condemn the property. Since acquiring the liquor store land is essential to developing the block, the request for proposals for the project include working with Hayes. “We would like to see him as a participating partner in the block. . . . We don’t want to circle around him and bypass him,” Chandler said.

The mayor said he “would like to see something going” within six months on the project.

While the city is stalled in the redevelopment of one area, another of the council’s priority projects appears to be proceeding smoothly.

The Redevelopment Agency this month took another step toward starting the renovation of the old Whittier Theater at the corner of Whittier Boulevard and Hadley Street. The thousand-seat theater, now boarded up, is one of only a dozen movie houses left in Southern California built before The Depression. Doerken Properties Inc., the Santa Monica-based development company for the project, envisions turning the theater into a regional performing arts center.

Replacement Park Sought

Doerken wants to build about 56,000 square feet of retail space next to the theater, and to do that, will need to acquire a small park owned by Los Angeles County. The county will give up the park if a comparable replacement is created in the city. The most recent action by the Redevelopment Agency authorized city staff to get appraisals on land adjacent to the Boys Club on Greenleaf Avenue as a replacement.

City officials hope that the theater, with its six-story tower visible for miles, will serve as a gateway to Whittier and set a cultural tone for the city. Doerken has proposed a two-story triangular-shaped building with an interior open-air courtyard, decorated in Spanish style. The accompanying retail space, including a restaurant, would complete the complex, and parking would be in a 750-car garage to be built behind the project.

Doerken is expected to close escrow on the theater and a couple of other parcels of land this month, said project manager Emil Neshanian. Doerken will pay the Pacific Theater chain of Los Angeles a reported $1 million for the theater, although Neshanian would not confirm that figure.

Pacific Theater tried to run the Whittier Theater as a movie house, even switching from English to Spanish-language films to attract more business. But the theater wasn’t a moneymaker, and Pacific last year discussed plans to demolish the landmark and sell the land for commercial use.

The City Council, however, was determined to preserve the theater, and in December designated it a historic building. That action delayed demolition for at least three months, giving Doerken time to submit its proposal to the city.

Neshanian said Doerken is now doing marketing studies to see if the area can support a performing arts center.