Some Not Buying Plans for 2 Retail Projects : Development: Expanded commercial interests are seen as a threat to residential property values. But the city stands to gain $1 million in annual sales tax and business permit fees.
Retail developments that bring both cash and cachet have always been welcome in Beverly Hills. But when the commercial interests threaten residential property values, it is a recipe for conflict.
Now comes a rare case where all the parties seem to agree on the merits of two much-anticipated retail projects. But just how far the city should go to grant all of the retailers’ requests soon will be the subject of a heated public policy debate.
City officials next week will consider a zoning change that would allow Saks Fifth Avenue to expand its second-largest U.S. store and for Barneys New York, a prestigious menswear chain, to erect a new five-story West Coast flagship store. The two stores would be located between Bedford Drive and Camden Drive on the south side of Wilshire Boulevard.
The ordinance, if approved, would extend the city’s so-called retail overlay zone several blocks east to allow Saks and Barneys to exceed the city’s three-story height limit in the business district.
The biggest sticking point, however, appears to be Saks’ request that it be allowed to build part of its store on land zoned for apartment buildings. Residents in the area say that if Saks’ request is granted, it could set a dangerous precedent for other large stores that may want to expand onto nearby non-commercial property south of Wilshire Boulevard.
A key factor in all this--as with so many things in Beverly Hills--is money. The city’s recent budget crisis, which forced officials to slash close to $9 million from the 1991-92 budget, has fueled concerns over future revenue sources.
If the zoning amendments and building plans are ultimately approved, the city stands to receive more than $1 million annually in sales tax and business permit fees from Saks and Barneys. And most of the council members, who appear to favor the plan, say the stores will serve as much-needed anchors for the city’s commercial district.
“In terms of the city’s retail business, I think these stores would be terrific,” said Mayor Vicki Reynolds. “But it has to be worth it for the residents of the community. Still, I think there is potential to satisfy both sides.”
Many residents in the area, while agreeing that the city needs to upgrade its department stores, say the cost of approving the plans as submitted may be too great.
“What in the world is the City Council going to say when all the other department stores decide to expand into residential areas?” asked Ken Goldman, president of the Southwest Beverly Hills Homeowners Assn. “We really just question whether this is a proper long-range planning goal for the city.”
If the zoning change is approved, Saks, which has been at the same spot on Wilshire since 1938, would be allowed to pursue plans for a five-story expansion of its existing store and to construct another 46,000-square-foot store on the adjacent corner.
Barneys’ plans call for a five-story, 108,000-square-foot store on the site of the old American Savings building. Although the retailers have submitted plans for separate parking lots, the city Planning Commission has suggested that a joint underground parking structure be built to alleviate traffic problems in the area. Saks’ and Barneys’ executives are negotiating the matter. The City Council will hold a special hearing on the zoning amendments Thursday night.
Saks’ plan, which was proposed after the fashion chain was bought by a Middle Eastern investment group last year for $1.5 billion, has come under the most fire, because the envisioned expansion would bring the store close to residential properties to the south.
“The real question is how much will Saks be allowed to expand,” Goldman said. “So far they have said they need to expand (so much) or that they can’t do it at all and frankly, if they feel that way, we think it should be nothing at all.”
Store officials, however, say there is little room to expand elsewhere, and that the building, now more than 50 years old, is in desperate need of rehabilitation. And Saks executives say that they already have altered their plans numerous times to reduce the impact of traffic and parking in the neighborhood.
“It’s a beautiful store with a lot of charm and charisma but I don’t think it helps us compete in the retail climate of the ‘90s,” said Saks General Manager Ed Bodde. “If you’re in a beauty contest and everybody has new caps on their teeth, and one of your front teeth is missing, it makes a difference. We need to be on equal footing with our competitors . . . so we can begin walking down the runway.”
Officials at Barneys, whose only California store now is a small one at South Coast Plaza in Orange County, said they have long wanted to build a flagship store in the Los Angeles region and that Beverly Hills was always their top choice.
“We’re talking about the second largest retail market in the country,” said Irvin Rosenthal, senior vice president, “and it’s important to be represented appropriately in that kind of market. . . . There’s a lot of competition there but competition is good in the retail business and I think that our store will serve as an anchor that will draw lots of customers to Beverly Hills.”
Former Mayor Donna Ellman, who has been working as a consultant for Barneys, said it would be unfortunate if the city balked at plans to upgrade the retail district, especially if the stores can address residents’ concerns.
“If it doesn’t happen it will be one step towards changing Beverly Hills from the most exciting shopping area around to just another place to shop,” she said. “Beverly Hills must do something to remain competitive and exciting.”
