Local News in Brief : Club Plans Fall Through

The owner of the Comedy and Magic Club in Hermosa Beach has pulled out of a $2.45-million deal to buy a commercially zoned site on Pacific Coast Highway, and the city is in escrow with a second buyer who reportedly plans to build a hotel.

The vacant, 28,000-square-foot site at Pacific Coast Highway and Gould Avenue--which is being sold as part of a settlement of a legal dispute involving the city, developer Charles Gotanda and his bank--was auctioned off last month.

The new buyer, Cheng Yi Chang, was the second-highest bidder and will pay $2.35 million for the property, said Betty Ryan, the broker who handled the sale for the city. “My understanding is that he wants to build a hotel; I have no details,” she said.

The buyer, who could not be reached for comment, is on the management staff of the Dynasty Inn of Gardena. Escrow is expected to close by Aug. 16.

City Manager Kevin Northcraft said: “In terms of city revenue (a hotel) would be good for us.” The city collects an 8% tax on room rents, he said.

He said that Michael Lacey, owner of the comedy club on Hermosa Avenue, put up about 5% of the sale price--or $122,500--when he was named the highest bidder. It has not been decided whether Lacey will get that money back, Northcraft said.

Officials would not comment on why the deal fell through, but Northcraft said that “it’s reasonable to assume” that Lacey did not want to go through with it after learning that the condition of the soil was uncertain because a gas station had once been on the site.

Lacey declined to comment except to say that there are still tanks on the site from the previous gas station, and “that’s something that can be a little riskier than I had planned on.”