Proposed Settlement Fails to Bring End to Hotel Controversy

A proposal aimed at settling a long, bitter dispute between the city of West Hollywood and hotelier Severyn Ashkenazy appeared to be headed for trouble this week after tenants and other critics reacted angrily to the plan.

At a City Council meeting Monday, more than two dozen people denounced a proposal that would allow Ashkenazy Enterprises Inc. to convert four apartment buildings into hotels in exchange for a promise to pay the city $4.9 million over the next 20 years.

“The fact that Mr. Ashkenazy builds and operates luxury hotels does not disguise the manner in which he operates, which is sleazy,” said Janet Bridgers, who was among those who urged the City Council to reject a settlement.

18 Months of Talks

Since it became a city in 1984, West Hollywood has opposed Ashkenazy’s attempts to convert the apartment buildings, located in residential neighborhoods, into small luxury hotels, claiming the conversions are illegal.

The proposal, hammered out during 18 months of private talks between city officials and Ashkenazy’s representatives, has enraged three dozen remaining tenants who stand to be evicted from their apartments and neighbors who see the city as surrendering by allowing hotels in residential areas.

On Monday, the City Council postponed until Sept. 6 a decision on whether to approve the proposed settlement.

However, Councilmen John Heilman and Paul Koretz have indicated that they will not go along with any deal that does not allow tenants to remain indefinitely in the would-be hotels. And several council members have expressed doubts about whether the proposed settlement is a good deal financially for West Hollywood.

In the negotiations, which ended last month, the company rejected the idea of allowing tenants to stay on indefinitely in any of the four hotels once the conversions take place, City Manager Paul Brotzman said.

Best Solution

Brotzman and other officials involved in the negotiations have sought to portray the settlement as the best solution for tenants, those living near the would-be hotels and for the city.

While acknowledging displeasure with some aspects of the settlement, Brotzman on Monday repeated his view that the agreement is preferable to “spending hundreds of thousands of dollars in litigation” with no guarantee that the city would prevail.

As proposed, the agreement sanctions hotel status for Le Parc, 733 W. Knoll Drive; Le Dufy, 1000 Westmount Drive; Le Reve, 8822 Cynthia St., and Valadon, 900 Hammond St. All of the buildings are in residential neighborhoods.

The $4.9 million would be paid in 19 annual installments of $250,000 and a final payment of $180,000, with most of the money earmarked to provide affordable housing.

As part of the deal, the company would not use the Ellis Act to evict remaining tenants in three of the properties until 1991. It also would provide hefty relocation fees if tenants are then forced to leave. Le Parc has had no tenants since 1979, a company spokesman said.

Allowed to Remain

About a dozen tenants of a fifth property, 949 Larrabee, would be allowed to remain in their apartments indefinitely under the agreement, which allows the building to operate as a hotel for guests who stay for at least 30 days.

The pact also grants Ashkenazy permission to go ahead with a long-stalled effort to convert the unfinished ninth floor of his swank Bel Age Hotel to luxury suites and to construct two “presidential suites” in the hotel’s rooftop penthouse.

The ninth floor has been used as storage space since the 198-suite hotel opened shortly before West Hollywood became a city. The county accused Ashkenazy of exceeding the height limit of the original plan and prevented him from developing the floor for occupancy.

At the hearing Monday, several Ashkenazy representatives listened without comment as critics took turns calling for the council to reject the proposed settlement.

“Since when did we start bailing out failing businesses with these kind of sweetheart deals?” said Gary Sullivan, who lives across the street from Valadon. “I will not protest your using my tax dollars to fight this matter in court for the next 10 years if that’s what it takes. . . . At least you will have earned the respect of your constituents for putting up a fight.”

Ashkenazy Enterprises filed for bankruptcy in 1986. Since then, it has sold the Valadon and 949 Larrabee buildings, although the company continues to manage them.

1,000 Units

If approved, the settlement would bring to more than 1,000 the number of hotel units in West Hollywood operated by Ashkenazy.

Ira Stein, a community activist who has strongly opposed sanctioning hotels in residential neighborhoods under any circumstances, called the settlement “laughable” for failing to ensure that the city would ever collect any of the promised $4.9 million.

He and others accused city officials of trying to promote a “sell-out” by allowing Ashkenazy to pay the money--which includes $1.2 million in delinquent hotel occupancy taxes and penalties--without interest over such a long period.

“If I were a businessman I’d consider opening a business in West Hollywood,” opponent Peter Cassidy said. “Where else could you get an interest-free loan of $1.2 million over 20 years to repay taxes that should have already been paid?”