One down for Caruso, one to go
Developer Rick Caruso has acquired one of the two properties he’s been seeking as part of his plan to expand the 15.5-acre Americana at Brand shopping center, but is no closer to a deal for the adjacent Golden Key Hotel.
Caruso Affiliated Thursday announced that it paid an undisclosed sum for the empty 7,500-square-foot brick building at 230 S. Orange St., adjacent to stores and restaurants on Caruso Way inside the Americana.
“We are very pleased to have reached a swift resolution,” Caruso said in a statement. “Our agreement brings us one step closer to achieving our goal, which is to redevelop the property in a way that enhances the downtown business district and provides important new revenue to the city.”
Henry David, the owner of the building, said in a statement that Caruso Affiliated “delivered on their promise to negotiate a fair and equitable agreement.”
Both parties declined to comment on the selling price. In November, David said he believed the property was as valuable as a nearby building the Glendale Redevelopment Agency acquired for $5 million in 2003, when the city used eminent domain to help pave the way for the mega-mall.
David’s one-story, ivy-covered brick structure, which has been in his family for decades, has an assessed value of roughly $260,000, according to Los Angeles County Assessor’s Office.
Ray Patel, owner of the Golden Key Hotel, said Thursday the deal has no impact on his desire to stay in business, despite a City Council directive that he and David either come up with a redevelopment plan or agree to sell to Caruso by Jan. 27.
“Good luck to him on whatever he wants to develop there,” Patel said of Caruso’s acquisition.
Last month Caruso sent Patel an appraisal valuing the property at $4.9 million and offered him $6 million for it – a 22% premium on the appraised value.
On Jan. 13 Patel sent Caruso a letter questioning the appraisal and saying the offer based on it “makes no sense.”
On Thursday, Caruso responded with a letter defending the appraisal and offering to negotiate directly with Patel or go to mediation to set a price. Caruso said he continues to seek a “constructive dialogue” with Patel on acquisition of the property.
Patel is suing the city and Caruso, alleging construction of the Americana from 2005 to 2008 damaged his business. That suit is scheduled to go to trial in June.
Separately, the last tenant to occupy David’s building, the owners of recording studio Backroom Entertainment Inc., also sued the Americana and the city, alleging mall construction and related noise ran them out of business.
That trial began Tuesday before Los Angeles Superior Court Judge Richard Rico. On Thursday lawyers for both sides prepared exhibits and documents, anticipating Rico will rule next week on whether the city and Caruso effectively condemned the business. If he rules that they did not, the case is over. If he sides with Backroom Entertainment, a jury would be impaneled to determine damages.