Sunset Strip Builder Drops Luxury Hotel

A luxury hotel planned as the centerpiece of a controversial $250-million multiuse project in the heart of West Hollywood’s famed Sunset Strip will not be built, officials said Tuesday.

Financing for the proposed five-star Sunset Millennium hotel evaporated in the aftermath of the Sept. 11 terrorist attacks, a spokesman for the Maefield Development Corp. said.

Builder Mark Siffin will now try to construct luxury apartments at the two-block-long Sunset Boulevard site with an eye toward converting them into a hotel when the economy improves, said the spokesman. Work is continuing on the retail and office portions of the plan.

The news dismayed West Hollywood officials, who estimated that the planned 370-room hotel would help the overall development generate $8 million a year in future tax revenue. The project, planned for the site half a block east of La Cienega Boulevard to half a block west of Alta Loma Road, would have been the city’s largest.

Opponents of Sunset Millennium have complained that the hotel would destroy views from adjacent hillside homes and create gridlock on Sunset Boulevard. Even before last month’s terrorism, they predicted that financing problems could spell the end of the remainder of the project.

The critics said Siffin signaled Sunset Millennium’s shakiness in August when he sought permission from the city to erect oversize billboards containing advertising on the tops of Sunset Millennium buildings. Rent totaling as much as $60,000 a month from each of the signs was necessary for the project’s economic viability, Siffin said.

West Hollywood City Councilman John Duran said that comment “raised flags” among officials. “If the project was so marginal it needed revenue from advertising, it raised questions as to how viable the project was,” Duran said.

City leaders said Tuesday that they are waiting for a specific proposal from Siffin. But they voiced nervousness over an apartment development, which would generate less tax revenue than a hotel.

“You would necessarily, at some point, have to displace tenants to convert an apartment building into a hotel,” Councilman Jeffrey Prang said. “And without sounding too cynical, you’d be creating a residential district in an area of the Sunset Strip that is already too loud. I’d have 200 tenants calling me every Monday yelling about noise problems.”

Siffin was reported Tuesday to be on vacation and unavailable for comment. But spokesman Rick Taylor said the builder is preparing to redesign the project to substitute luxury apartments at the hotel site.

“Mark was trying to find funding, but the reality is nobody is giving him a dime for a hotel now. Nobody is lending on hotels. Mark just couldn’t do anything about Sept. 11,” Taylor said.

According to Taylor, development of a retail shopping area on the western side of the site is continuing. Remodeling of the former Petersen and Playboy office buildings there has been completed, although work has not started on the proposed $3-million pedestrian bridge spanning La Cienega. Taylor stressed that Siffin has no plans to sell the Sunset Millennium property.

But G.G. Verone, a businesswoman who lives on a hill above the site and for three years has led opposition to the Sunset Millennium project, predicted that’s what Siffin will end up doing.

In addition, the city gave him “the right to sell billboards 166 feet above the street if he goes bankrupt,” Verone said.