Hollywood Roosevelt Files for Bankruptcy
The Hollywood Roosevelt Hotel, site of the first Academy Awards ceremony in 1929 and a symbol of recent efforts to revitalize the sagging movie capital, has filed for protection under federal bankruptcy laws, representatives of the 13-story landmark said Friday.
The action is aimed at keeping the 324-room hotel open while its owners restructure the payments on secured debts totaling $38 million, said attorney Richard Wynne, representing the Hollywood Roosevelt Limited Partnership. The owners hope to reach financial agreements that will enable the struggling hotel to continue operating and to complete further improvements that will augment its income, Wynne said.
The owners so far have not discussed selling the hotel and have no plans to close it, he added.
“It’s business as usual,” Wynne said, stressing that there are no changes immediately planned for the hotel’s daily operation or management. “We’re very positive. It’s a national landmark. It’s been extensively renovated. Chapter 11 is just a fact of life in America today.”
Redevelopment Lagging
But the filing, on Wednesday, underscored the lagging pace of Hollywood’s $922-million redevelopment effort, designed to bring new business and luster to Hollywood’s commercial core. The Roosevelt, purchased and renovated by the partnership at a cost of $50 million, was given a festive reopening celebration in early 1986, an event that was expected to signal a rebirth of the community.
The hotel, restored without any government funding, is located on Hollywood Boulevard just west of Mann’s Chinese Theatre--the area considered most ripe for new commercial growth. But the hotel has been plagued by low occupancy rates, about 65% last year, said David Loppert, a hotel vice president.
Although rates have improved to about 80% in recent weeks, debt obligations have caught up with the hotel, Loppert said. Rooms rent for an average of $125 a night, and 10 luxury suites are being reconstructed.
Meanwhile, other planned commercial developments that were expected to further boost occupancy rates, including the $300-million Hollywood Promenade office, hotel and entertainment project encircling Mann’s Theatre, have not been built as quickly as hotel owners had hoped, he said.
“The Hollywood Roosevelt is really the only major redevelopment that has come to fruition in Hollywood,” Loppert said. “It is kind of frustrating that the other major projects . . . have been stalled. We’ve been waiting with bated breath for the (Hollywood Promenade) to get off the ground.”
The Promenade, which is expected to contain a 400-room hotel as well as a 19-story office tower, has been delayed about two years, largely because of lawsuits and difficulties in acquiring all of the 2 1/2-block site, said Linda Sonnonstine, a spokesman for the Melvin Simon & Associates development firm.
But the project broke ground earlier this year and is expected to go forward without further difficulty, she said. It is scheduled to open in 1992.
Suit by Activists
Officials of the Los Angeles Community Redevelopment Agency expressed surprise at the bankruptcy filing but predicted that the hotel would continue to be a part of Hollywood Boulevard, whether or not the ownership changes. They blamed the slow start of the redevelopment plan on a lawsuit filed by activists that sought to overturn the plan. But the agency won that suit earlier this year and is planning to accelerate its effort in Hollywood, said Judy Broverman, the CRA’s chief deputy administrator.
The hotel, which now features a painted swimming pool by artist David Hockney, was the regular meeting place of the Academy of Motion Picture Arts and Sciences in Hollywood’s heyday.
“It’s phenomenally important,” said Judie B. A. de Turenne, chairman of Hollywood Heritage Inc., the largest preservationist group in Hollywood. “It would be a great tragedy to lose the hotel.”
The owners will be meeting next week with creditors to begin negotiating agreements, attorney Wynne said. The owners are due to file a full list of debts, including overdue payments, in 45 days and a complete reorganization plan in four months, he said.
