Sunset Rising in Hollywood
Construction begins today on another high-profile real estate project in Hollywood, a $125-million shopping center and luxury apartment complex at one of Los Angeles’ best-known intersections.
The long-anticipated project on the northwest block of Sunset Boulevard and Vine Street will boast a massive electronic billboard, a surrounding frieze of advertising signs and a projector that will flash images of faces. A brace of Klieg lights, which should be visible for miles, will sit atop the 120-foot centerpiece.
Named Sunset & Vine, the project probably will be the largest multifamily residential development in Hollywood in the last 50 years, said one of the builders, Larry Bond of Bond Capital Ltd.
It will include 300 units of loft-style apartments designed to appeal to entertainment industry “echo boomers” ages 25 to 40. The entrance to the apartments will be through the Art Deco facade of the former TAV Studios, which housed the Merv Griffin Theater and ABC Radio when it was built in 1938.
The site at the eastern edge of Hollywood’s Walk of Fame also was once home to Capitol Records, the Spanish Ballroom and the Copacabana Club. Businesses that have agreed to move to the new development are Borders Books & Music and Bed Bath & Beyond. The 90,000 square feet of retail space will include restaurants.
Bond Capital’s financial partners are the California State Teachers’ Retirement System pension fund and Canyon-Johnson Urban Fund, a partnership of Beverly Hills-based Canyon Capital Realty Advisors and former Los Angeles Laker star Earvin “Magic” Johnson’s Johnson Development Corp.
Though the Hollywood office market has been soft for several months and the massive Hollywood & Highland shopping and entertainment center that opened in November has not performed to expectation, several smaller retail projects are in various stages of development, and apartments are in short supply. Market observers predict the fledgling economic renaissance in Hollywood will continue, though at a slower pace than expected before the economy slowed last year.
“In Hollywood, they want to be a little cooler now,” Johnson said. “For us to be a part of that is wonderful.”
The Hollywood project is part of an effort at Canyon-Johnson to move its investments beyond the inner city into other promising urban locations, said co-managing partner Ken Lombard. The company has amassed a $200-million fund to develop urban “infill” projects, which involve reclaiming underused space in long-established neighborhoods.
Many institutional investors still consider ethnically diverse, densely populated urban areas such as Hollywood an investment risk, even though the demand for services is often greater than the supply, said Bobby Turner, the other co-managing partner of Canyon-Johnson.
“The whole thesis of our funds is that the [real estate] fundamentals are hugely favorable. Sunset & Vine is the poster child,” Turner said.
It’s also the first major mixed-use project in Hollywood’s commercial core to have a significant residential component, said Jeffrey Skorneck, project manager for the Community Redevelopment Agency.
“We believe it will be a catalyst for more of its sort,” he said. The project is in a CRA zone, and portions of its property tax payments will be used for improvements in the area.
The substantial presence of advertising at one of the most heavily traveled intersections in Los Angeles will contribute to the developers’ bottom line, Skorneck said, but it has been designed to enhance the environment.
Other recent or planned projects in the neighborhood include the ArcLight Hollywood theaters at the Cinerama Dome and Capitol Records’ expansion of its campus on Vine Street. A hotel and residential project at the Hollywood and Vine subway station has been approved by the Metropolitan Transportation Authority.
The retail portion of Sunset & Vine should be completed by the end of 2003, and the apartments are expected to be ready the following spring.
The executive architect is Gruen Associates. Charles Pankow is the general contractor.