Case Study Reveals Downside of Minimum Wage Hikes

Los Angeles and California embarked on an unprecedented experiment this past year, when both voted to phase in a $15-minimum wage over a period of years. In L.A., the rate will reach $15 in 2020 for businesses with 26 employees or more and in 2021 for smaller businesses. In California, the $15 rate will be achieved in 2021, making it the highest state minimum wage in the nation.

Business concerns were minimized by both the City Council and the State legislature, who believed that adverse impacts would be minimal. There will be a lot of interest over the next few years to see whether businesses were playing “chicken little” in complaining about the anticipated impact to their businesses and if the economy can absorb these increases with minimal disruption.

While it may take a while to measure the impact of the general $15 minimum wage, there is a more immediate gauge that might indicate whether we need to worry. In 2014, a year prior to the wage vote that was applied to all businesses, the City Council approved a dramatic increase in the minimum wage for nonunion hotels with 300 rooms or more – raising the wage from $9 an hour to $15.37 an hour beginning in July 2015. For hotels with between 150 and 299 rooms, the increase was delayed a year to July 1, 2016. It was a jump of 70.7-percent all at once. This unprecedented increase affected only certain hotels and included all tipped and non-tipped employees.

In Hollywood, only the Hollywood Roosevelt Hotel was impacted by the increase in 2015. So I thought it might be interesting to ask the hotel how it is coping with the minimum wage increase. I spoke with Brett Blass, the Chief Operating Officer (COO) for Journal Hotels, the hotel’s management company. Let me share with you what I learned.

Blass told me that the minimum wage increase has cost the hotel almost $3-million annually – a significant bite to its bottom line. Unlike some government entities, businesses must operate in the black if they are to survive, and so the hotel was forced to take action to cut costs.

Especially of concern to Blass is that the ordinance did not include hotels with which the Roosevelt competes for customers, eliminating a ‘fair and level playing field’ amongst the hotel competitive landscape. “It is impossible to fairly compete when operating a hotel bar, restaurant or the hotel itself when singled out by government wage mandates such as this,” he emphasized. “A hotel can’t just raise all prices, as pricing is marketplace driven.”

The hotel chose to close one of its three restaurants for lunch, Public Kitchen & Bar, resulting in the loss of 10 jobs. “Restaurant margins are not high to begin with,” Blass pointed out. “By increasing tipped wages so much, we found margins at an all-time low or in the red completely.”

Over time, between 30 and 40 full-time positions were eliminated, about 8- percent of the hotel’s total staff. (This job loss is in line with the experience of hotels in proximity to Los Angeles International Airport that were impacted by a similar City-imposed increase a few years before.) In addition, several planned new jobs were put on hold.

Besides this, numerous employees had their hours more closely scrutinized or cut – especially tipped workers in the restaurants. When the increase is applied to tipped workers, the overtime pay becomes astronomical for a business to pay. Overtime is calculated not just on the $15.37 an hour wage, but also on the tipped wages. With the new minimum wage and tips, waiters are earning between $60 and $70 an hour at the Roosevelt, according to Blass. Add in overtime at time-and-a half, and you get the picture. A business cannot afford to have an employee work more than eight hours and so time is reduced to ensure that an employee does not exceed that amount.

The minimum wage hike caused “bleed-up” to happen as well, according to Blass. The hotel had to raise their managers’ pay to keep them above the minimum wage employees.

“We had planned greater annual raises for many of the non-tipped work force,” reflected Blass, “but had to stick to the minimum wage increase only because of the massive and immediate increase to the tipped wage. About 35-percent of the total hotel staff are tipped, so those folks taking home tips every day got the biggest minimum wage lift.”

He also noted that the hotel just completed $22-million in guest room renovations, which would probably have been considered differently had the annual wage increase been known at the time of construction planning.

So, there you have it – a case study showing the actual impact of a minimum wage hike. Now, I’m sure the hotel employees who received increases were very happy, but I wonder what happened to the 8-percent who lost their jobs? Perhaps they found employment at other hotels covered by the wage hike, but if the cutbacks experienced at the Roosevelt are an indication, I doubt it.

I realize that there is a difference between a one-time wage-jump of 70.7-percent versus a phased-in increase, but there is still a lot of good information we can glean from this case study. There are important questions that experts should analyze, such as how many new jobs will not be created by businesses coping with their increased overhead costs, and how much investment in their businesses will not occur since the money is not there. Such investment would create other jobs within the economy that now might not happen.

I wonder how much prices are going to rise over the next few years as the wage hikes work their way through the economy, and how much this is going to cost all of us. I wonder how many employees are going to lose their jobs and what efficiencies businesses will implement to reduce their overhead.

As we stated at the hearings, no one was arguing that an increase in the minimum wage was not warranted. However, based on the Roosevelt experience, I believe more caution and restraint would have been the wiser course. Now we wait to see how this plays out, and hope for the best.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Job Creation Needs to be a Top Priority

There has been a lot of information in the news lately about jobs. Let me share some statistics with you.

Last month, the Los Angeles Economic Development Corp. (LAEDC) projected that job growth in this county would result in 346,000 new jobs between 2015 and 2020. That is in addition to the 469,200 jobs created since the rebound began in 2010. L.A. County led the nation with the largest number of jobs created during that period, according to the Washington, D.C.-based Economic Innovation Group.

That sounds pretty good until you learn that most of the new jobs we are creating pay below the median wage (which was $32,537 in 2014). The LAEDC report showed that the largest growth area would be in office administrators and food servers, which will add 93,000 jobs. By comparison, the county will gain only about 19,000 production and engineering jobs. The LAEDC said that Los Angeles may face a “brain drain” if it can’t figure out how to create more lucrative and advanced jobs.

I’m sure that you have read that L.A. has the largest gap in the nation between wages earned and the cost of housing. This is simply unsustainable. If we are to have a healthy economy, we must provide jobs that can sustain singles and families.

Joel Kotkin reported in an article entitled “L.A.: City of Losers?” that although our industrial job count of 363,900 is still the largest in the nation, it is down sharply from 900,000 jobs just a decade ago. He said that although the L.A. region is the number one producer of engineers in the nation, as many as 70 percent are leaving town to find work.

There are a lot of reasons for the decline in industrial jobs. One sector particularly hard hit has been Aerospace. In 1990, there were 130,100 Aerospace workers in this county. By 2010, employment in that sector had plummeted to 39,100 in the aftermath of the Cold War. And, in a sign of the times, some firms picked up and moved to Washington, D.C. to be closer to their funding sources. These were a few of the factors that resulted in this precipitous drop.

Of course there are other reasons as well. Some manufacturing moved overseas. Environmental regulations, taxes and the high cost of housing have made it increasingly difficult for some manufacturing concerns to operate here. We are not viewed as business friendly as many other cities and states. Frankly, there are valid reasons for those views.

Despite the bad news, there are also some positive signs for us on the jobs front. One of our most important employment sectors, entertainment, was hemorrhaging jobs until the State passed AB1839 two years ago which raised the incentives to bring filming back to California. Reports that I am hearing are that studios and stages in Hollywood are back operating at full capacity – something not seen in many years. Local residents who were having to go to places like Georgia, New York and Louisiana have been able to return home for work. The filming incentives have worked marvelously and will translate into thousands of middle-income jobs.

And there are new creative industries where L.A. is excelling. Mayor Garcetti, when he spoke to the Chamber last month, noted that L.A. is number one in new tech and green jobs. We need to find more niches where L.A. can produce jobs that will enable our residents to have an acceptable quality of life.

Earlier this month, it was announced that a Los Angeles-based coalition, the Smart Manufacturing Leadership Coalition (SMLC) had made the winning bid for the Smart Manufacturing Innovation Institute, from the U.S. Dept. of Energy. The institute will pool more than $140-million in public-private investment from universities and manufacturers to develop smart sensors for use in advanced manufacturing. We need more wins like this.

There is nothing that will solve the entrenched problems of poverty and homelessness more than the creation of good-paying jobs. L.A.’s natural advantages, including our unparalleled weather, respected research universities and think tanks, and some of the most creative people on the planet can help attract business. However, there needs to be a concerted effort by local governments to make the creation of median-wage jobs a top priority, rather than an after-thought. The days are long gone when we could depend on the weather alone to bring good jobs here.

That means more than just giving lip service. It means identifying areas for potential growth, listening to business leaders and then following through on their suggestions of how to attract their industries, investing to create an infrastructure to accommodate those businesses, and changing perceptions that we are not business friendly.

It is a tall order in a county with 88 different cities, but wouldn’t it be amazing if all 88 cities were working together to attract these jobs? If they did, we’d have a lot more good news stories to write.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Master Plan Is Of Paramount Importance

Last week, the City held a public hearing on the proposed 25-year Master Plan for Paramount Pictures. This storied studio, which dates back to 1912, is the last remaining major studio located in Hollywood proper. Warner Bros., Columbia, Fox and Disney got their start here, but all moved out many decades ago. As hearings go, this one was cordial. Even those who had issues were on their best behavior. Everyone understands how important Paramount is to our community.

As Chamber President & CEO, I pointed out how critical Paramount is from a jobs standpoint. With 5,000 people employed on the lot on an average day, Paramount is our jobs anchor in South Hollywood. That is important to our economy because there are numerous ancillary jobs nearby that depend on Paramount – whether a restaurant or prop house or catering truck.

These are by and large middle income jobs. And that is important in Los Angeles – which is the most expensive city in the nation on an income to housing costs basis. It costs a lot to live here. With sharp declines in the aerospace and manufacturing sectors since the 1990s, it is vital that we grow our homegrown entertainment industry.

When you consider that there are only about 200 acres in all of Hollywood that are industrially zoned, it means that we must maximize the jobs on the industrial land that we do have. And Paramount occupies 56 acres, plus an adjacent six acres used primarily for parking. That is more than a quarter of our entire industrially-zoned land.

In order for Paramount to survive in the very competitive entertainment sector, it must be able to expand to take advantage of opportunities as they arise. It was pointed out at the hearing that Paramount is the last of the major studios to update its master plan. That provides them with the perspective to see what their competitors are doing.

It also clearly delineates why they need to plan for technologically advanced sound stages with adjacent production offices, new climate control and lighting systems. It explains why they will need high-tech post production facilities, and adequate parking. It demonstrates why upgraded employee amenities are planned. It is all about competition.

Over the next 25 years, under the proposed plan, Paramount will invest $700-million with a $1.1-billion economic output during construction, which will generate 7,300 construction jobs. However, for me the more important figure is the number of permanent jobs that will be accommodated on the lot once the plan is fully implemented – 12,600 jobs with $3.1-billion in annual economic output. Those are jobs that will enable employees to truly have a “living wage”. Those are jobs that many of our children will occupy.

A year ago, the State of California approved AB1839, which vastly increased funding to compete for entertainment jobs, and to bring them back from other states, due to their film tax credit program. In the subsequent year, we have seen just how successful the program has been. We now have a chance to grow this industry once more – and we must, if we are to demonstrate to the State that their investment was worthwhile.

What I heard at the hearing were typical concerns – traffic, the height of some buildings, making parking structures attractive, the preservation of historic resources, signage. These are issues that I’m sure will be addressed by Paramount as it moves forward with its plan. I did not hear any issues that were insurmountable. We encourage the City to approve a reasonable plan for Paramount and for our community. We all have a stake in Paramount’s future.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Dreaming Big in Hollywood

Hollywood leaders have a history of dreaming BIG and making things happen that might not happen elsewhere. The Hollywood Sign is a perfect example. Hollywood entrepreneurs put it up on the hillside, and the Hollywood Chamber of Commerce rescued it when it was falling down in 1948. It has become the symbol of Southern California.

The Hollywood Bowl is another great case. Who would have thought that a small group of community leaders would have the vision back in 1919 to purchase a hillside and develop an outdoor amphitheater that would seat 18,000 people? Likewise, the Hollywood Walk of Fame has become internationally renowned. It originated as an idea of a president of the Hollywood Chamber of Commerce, E.M. Stuart, who was the general manager of the Broadway Hollywood Department Store. It took six years to make that idea a reality.

People still dream big in Hollywood. Last week, I traveled to Washington, D.C. to join a delegation of the Friends of the Hollywood Central Park. This is another big idea – to put a one-mile long cap (cover) over the Hollywood Freeway in the area where the freeway is below grade between Hollywood Blvd. and Santa Monica Blvd. The cap would create a 38-acre regional park at a cost estimated to approach $1-billion.

Most people would shy away from such an ambitious undertaking, but not the Friends of the Hollywood Central Park (FHCP). Since this nonprofit, grassroots organization was formed in 2008, it has made annual trips to the nation’s capital to brief our representatives. Their president, Laurie Goldman, is passionate about the park. At our meetings in Washington, she explained in detail to numerous congressional representatives, the Department of Housing & Urban Development as well as the Department of Transportation the progress that has been made.

It was obvious that those in the meetings had been briefed before and were extremely interested in and supportive of the proposed park. While other cap parks have been built around the nation, few have been as ambitious as this one or driven by a grassroots coalition. And of course, this one is proposed in Hollywood, which makes it that much more interesting.

Goldman and her delegation explained that Hollywood is one of the lowest resident-to-park-space communities in California (and the nation). Our community has only 0.005 acres of open space per resident as compared to 0.012 acres of open space within the City of Los Angeles. The benefits in improving the quality of life for our residents are obvious. Green space and athletic fields will change the equation for thousands of residents. Air quality will improve substantially, and the two sides of Hollywood will be knit back together after a separation of more than 60 years. And thousands of construction jobs will be created by the project.

FHCP was successful in securing over $2-million in funding for an environmental impact report on the park, which will be released later this year. It is far ahead of all other freeway cap park proposals in Southern California and will likely point the way for them.

Of course, the big question is how you raise a billion dollars. FHCP has turned over every rock looking for possible sources, and is making progress. One possibility they are currently studying is an Enhanced Infrastructure Financing District (EIFD). The EIFD is a new tool that the legislature in Sacramento authorized and the Governor approved that allows communities to create districts that would tap into tax increment financing for specific projects, such as parks (kind of “Community Redevelopment Agency-lite”). If FHCP uses an EIFD, then they would dedicate 25 percent of the revenue generated for affordable housing. The New Promise Zone for Los Angeles may present other opportunities to seek federal funding.

I came back from Washington convinced that the FHCP can indeed make this park a reality. There is a lot that can be achieved when you do not take “no” for an answer. Sociologist Margaret Meade’s famous quote applies here: “Never doubt that a small group of committed citizens can change the world, indeed, it is the only thing that ever has.”

We are lucky to still have people who dream big in Hollywood. Our best wishes for continued progress to the Friends of the Hollywood Central Park!

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Ballot Measure Would be a Giant Step for L.A.’s Mass Transit System

A week ago, the Metropolitan Transportation Authority (METRO) Board held a hearing on a proposed $120-billion plan to dramatically expand mass transit throughout the region. The Hollywood Chamber of Commerce was on hand to support the Crenshaw Northern Extension. We have pressed for this project for several years, and so were pleased that it was included in the list of projects to be funded. However, we were disappointed that it is not scheduled to begin construction until 2049.

A little background for those not familiar with this project. The Crenshaw line is a north-south light rail line that will connect to an LAX people mover. Its northern terminus is at the Expo Line below the 10 Freeway. The proposal would extend that line north through the Mid City area and West Hollywood before terminating at the Hollywood & Highland Metro Station. I think most people would agree that it makes sense to connect the airport to the region’s top tourist destination. Hopefully, we can get this project’s timeline moved forward.

The important thing at the moment, though, is to get this plan approved on November 8th by the voters. That is not necessarily an easy thing, because all of the improvements (as currently proposed) would be funded by an extension of the existing sales tax for 18 years and an additional half-cent sales tax for at least 40 years, boosting the county’s base sales tax rate to 9.5-percent. The measure must be supported by two-thirds of the electorate.

In the past, L.A. voters have been supportive of mass transit, passing Measure R in 2008, and more recently, falling just short of the needed votes for Measure J in 2012, gaining 66.1-percent in support but needing 66.7-percent.

The new initiative calls for highway improvements as well as a dozen mass transit projects that would double our existing system. Having a transit system that gets people to where they want to go is key to the economic future of this region. It is also key to having a livable city.

One of the criticisms we often hear from opponents of mass transit expenditures is that the system doesn’t take people where they want to go – despite the fact that METRO is currently building five lines, more than any other place in the country. This new measure will expand the system even further. The sooner we get started on this expansion, the sooner there will be a system that gets people to more destinations.

The METRO network is the key to dealing with growth issues in the region, and is the only solution that I have heard from any source that makes sense. As is currently happening in Hollywood, future development would be encouraged in close proximity to transit stations. Yes, that may require up-zoning in areas near the stations, but by focusing development there, it also allows the City to preserve existing single-family neighborhoods elsewhere. As the system is built-out, residents will be able to utilize mass transit to get around. It is true that people will still have cars and use them, but by orders of magnitude, we will see significant improvement as the system is expanded.

There are three general suggestions to handle growth that I have heard that do not make sense. Some people suggest that we merely concentrate all development in Downtown L.A., but that is not an answer for growth. This region is so vast and spread out that you cannot accommodate all development in the center city. Besides that, if you do not encourage development within sub regions, those communities will deteriorate. New development is critical to revitalizing our neighborhoods.

The proponents of the proposed Neighborhood Integrity “no growth” Initiative don’t want increased density near transit stations. For them, the solution is to merely build-out under the current zoning citywide. The problem with that is it would spread development all over the city whether near transit or not, resulting in more congestion everywhere. Plus, you cannot justify the high cost of building a mass transit system if you cannot concentrate potential riders near the stations.

And then there are those who say they don’t care where development goes so long as it isn’t built near their neighborhoods. That is again not a solution and an abrogation of our responsibility. Development must go somewhere if we are to have a healthy economy, and it is better to have a plan than no plan at all.

Which brings us back to the Metro proposal that will likely be placed before voters this fall. There are hundreds of successful transit examples worldwide that point the way for Los Angeles. We have reached the physical limits of growth in this region. The basin is filling in. If our children are to have a future here, we have to find a way to grow and improve mobility.

Voters need to seriously consider the benefits of this expansion of our transit system and determine if those benefits justify the increase in sales taxes. Personally, I believe that the expansion is warranted. This region is on the right track, and with the support of voters we will continue in the right direction.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

A New House Is Coming to Hollywood

Recently I attended a gala press announcement hosted by the Japanese Consulate and Consul General Harry H. Horinouchi. I was particularly interested to learn about a cutting-edge initiative that is going to be very beneficial to Hollywood, and which is bound to become a new attraction for both locals and tourists.

Known as Japan House, the program is a new public diplomacy initiative from Japan’s Ministry of Foreign Affairs to showcase the best of Japanese arts, culture, innovative technology, food, and more. The Ministry has selected three locations around the world to showcase the initiative – London, Sao Paulo and Los Angeles. Of particular interest to us is that Hollywood & Highland has been selected as the Los Angeles location.

The Los Angeles Japan House will bring the most authentic aspects of Japan to the world and will promote understanding and appreciation of Japan in the hopes of strengthening U.S.-Japanese relations. The concept is still being refined, but you can expect Japan House to open in the summer of 2017. You should also know that our own Beth Marlis, Chamber Chair of the Board, is on the advisory board to the Japanese consulate, working to make this a reality.

There are a few things that we already know about Japan House. It will consist of two separate locations at Hollywood & Highland. On the second floor, the facility will take up over 6,000-sq.ft., with a shop, café, multi-media room (and special presentations about Japanese culture), and a seminar room. On the fifth floor, there will be a Japanese restaurant featuring top Japanese chefs and an event space (in over 8,000-sq.ft.) which can accommodate 200 people.

This is exactly the type of attraction that Hollywood needs and can host better than any place else in Southern California. We already know that Hollywood is a magnet for people from the entire region. Enterprises such as the El Capitan Theatre, the Pantages Theatre, the Hollywood Bowl and Amoeba Records have proven that this is the place for entertainment. We are the top tourist destination in Los Angeles County as well – and with the pending opening of Universal Studio’s Wizarding World of Harry Potter – we expect that our desirability will continue to grow.

I believe that unique attractions such as Japan House have their greatest chance at success here. And they help our “brand” as well. For Hollywood to succeed, we must be able to continue to add new attractions that will draw people. We cannot sit back while other areas of Southern California open popular new venues.

Tourism, along with Entertainment and Health Care, are our three major employment sectors in this community. Thousands of jobs rest on our ability to continue to improve the Hollywood brand. The Hollywood Walk of Fame is one way that we constantly reinforce the brand, but we cannot rely just on the tried-and-true attractions.

We welcome Japan House to Hollywood and look forward to having their involvement in this community. As we learn more details about their plans, I am sure that the level of excitement will grow even more!

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Closure of Cashmere Sends Proper Message

Two weeks ago, the Los Angeles City Council took action affirming the Department of City Planning’s decision to revoke a Conditional Use Permit (CUP) for the Cashmere nightclub in Hollywood for multiple land use violations. The Hollywood Chamber of Commerce applauds the action by the Council and the efforts of Councilmember Mitch O’Farrell.

Let me explain why the Chamber supports this action.

When an applicant seeks a CUP to open a club, the City establishes rules under which that club must operate. Those rules are set to protect the public – those who would visit the club as well as nearby residents and businesses. The types of rules that are set may include hours of operation, age restrictions, alcohol and food sales, capacity, and security requirements, among other things.

Over the years, there has been lax enforcement of CUPs. The Hollywood Chamber has been concerned for years about this and has urged proper enforcement. We were encouraged when the Planning Department set up its Conditional Compliance Unit a couple of years ago. We believed it was a step in the right direction. But progress has seemed to be painstakingly slow.

In the particular case of Cashmere, it had been the focus of numerous investigations by the LAPD over an extended period of time. Last August, a 20-year old male DJ died while employed at the nightclub. In another incident in 2014, investigators say a female college student was sexually assaulted at the club. Such incidents and investigations should have sent a message to the operator that steps needed to be taken to address the issues.

However, adequate measures were not taken. If an operator does not think there will be adequate enforcement, it can encourage some to flaunt the rules, which may have been the case here. The fact that the City has stepped in and taken the serious step to revoke the CUP sends a very strong message to those who don’t want to follow the rules. Without a CUP, the business is unable to continue operating.

Hollywood’s nightclubs are an essential component of our revitalization program. In the 1990s when things looked bleak as far as redevelopment, the clubs brought hope to the community. Early pioneers such as The Garden of Eden, Beauty Bar, Sunset Room and Deep helped to bring patrons to Hollywood. The clubs liked the edginess of Hollywood. Their success brought additional venues and Hollywood established a reputation as a nighttime hotspot.

A lot has transpired since those days as we have seen the revitalization of Hollywood take hold. Today, we see new retail, mixed-use residential projects, office space and hotels under construction.

While the clubs are no longer the backbone of the revitalization effort, they are still important. We have some great venues, which help us to provide nighttime entertainment. Most operators are outstanding, doing their best to adhere to their CUPs.

When the City clamps down on those who continually break the rules, it helps to establish the parameters for operating in Hollywood and it supports those clubs that do follow the rules.

Councilmember O’Farrell and the City took the right action in the case of Cashmere. While we hate to see any business close, we believe the message that was sent is good for Hollywood, good for our residents and visitors, and good for business.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Columbia Square Shows How Development Helps the Community

With all of the recent attacks on developers by NIMBYs (Not-in-my-backyard) who don’t want to see growth, I thought I would provide a case study on the positive aspects of new development.

Columbia Square is a perfect example. This $450-million, 700,000-sq.ft., mixed-use project by Kilroy Realty will have an “outsized” positive impact on Hollywood.

One of the most historic buildings on Sunset Blvd., Columbia Square was the West Coast home of CBS for many years. Built in 1938, it originated such shows as Jack Benny’s Lucky Strike Program, the Adventures of Ozzie & Harriet, and The Swan Show starring George Burns and Gracie Allen. When CBS moved their studios out of Hollywood in 2007, its future was in question.

Now, thanks to the work and investment of Kilroy Realty Corp., Columbia Square is shining once more. The historic buildings have been restored and renovated as the L.A. hub for Neuehouse, a New York-based creative workspace collaborative. Acclaimed New York architect David Rockwell, who also designed the interior of the Dolby Theatre, designed the space. Architectural Digest gave the facility glowing reviews in January.

Writer Mayer Rus said of the space “If you’d like a window into the leading edge of creative work (and play) spaces in 2016, you need look no further than the recently completed NeueHouse Hollywood, the West Coast counterpart to the original Manhattan office hub for the so-called creative class. …the L.A. complex boasts a few attributes its Gotham forebear cannot claim: a building with an impeccable modernist pedigree; a site with a long and compelling history in the production of popular American culture; and the kinds of amenities one can enjoy only in a heavenly Mediterranean climate.”

Rus continued in the Architectural Digest article that “there are a number of restaurant and lounge experiences, including alfresco dining on the roof terraces – in facilitating discourse and comfort in the workplace.”

Not only has the historic building been preserved, which benefits the community enormously, but it is a place that visitors and residents can patronize and enjoy. Several restaurants have or are in the process of opening, including Rubies + Diamonds, Sugarfish, Sweetgreen and Paley.

Also preparing to move into Columbia Square is Viacom. CEO Philippe Dauman recently discussed the pending move into 180,000-sq.ft. of space with the L.A. Times. He noted that this will become the headquarters for their West Coast media networks and home base for about 700 employees from MTV, Comedy Central, VH1, BET, Spike, TV Land and Logo. It will provide them with new production stages, a lot of shooting space and a rooftop area for shoots with views of the Hollywood Sign. He noted that the Hollywood facility will be the largest mobile content studio in the industry.

Besides Viacom, Kilroy has announced that Fender Guitar has leased 40,000-sq.ft. and will be moving their headquarters from Scottdale, Arizona, to Hollywood. These will be new, high quality jobs for Southern California and Hollywood.

After the loss of dozens of entertainment firms over the past 20 years, the announcements by Viacom and Fender Guitar send a great message that Hollywood is back. However, of even greater import is bringing more than 700 quality jobs to the community. Hollywood has an opportunity to show that with smart growth, it is possible to grow a community with balanced jobs and housing. We are building both. We currently have 1,800 housing units under construction and more in the pipeline. In addition, there are several hundred thousand square feet of office space in development as well as several hotels.

This balance of different uses is what makes the revitalization of Hollywood so exciting. Locating jobs and housing in close proximity with nearby entertainment options and shopping are especially attractive to the Millennials who are locating here. When you consider the compact nature of Hollywood which makes it walkable, as well as its transit connectivity, one begins to see how growth can and should occur to make a community livable.

Due to this single project, we will see the preservation of a historic landmark, hundreds of construction jobs, hundreds more permanent jobs, new opportunities for dining as well as outstanding architecture. It is a win-win for the community. And it would not have been possible without the vision and investment of a developer.

Let’s keep this in mind when next you hear the negative attacks against development.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Why it is thumbs down on Neighborhood Initiative

By now, you may have heard of a new anti-growth effort, the Neighborhood Integrity Initiative, being promoted by a group called the Coalition to Preserve L.A. The initiative would impose harsh restrictions on projects that require major changes to city planning rules – including putting a moratorium of up to 24 months on development projects that cannot be built without votes from elected officials to increase density. It would make it difficult to change the L.A. General Plan for individual real estate projects. It would place City employees directly in charge of preparation of environmental review of major projects. It would require the City Planning Commission to update the City’s community plans to be consistent with the City’s General Plan – even though these initiative supporters often fight any effort to update the community plans.

Let me say the obvious – that the goal of the initiative proponents is to stop any significant development within the City of Los Angeles. They claim that their initiative “will preserve the character of neighborhoods throughout the City of Los Angeles and improve the overall quality of life for city residents.” In actuality, it will worsen the quality of life for city residents – as there will be fewer jobs, higher housing prices, and more congestion.

In order to justify radical initiatives like this one, the proponents always paint City officials as inept and developers as villains out to make a buck and destroy the character of neighborhoods. They never want to discuss the reasons behind the City’s actions or where growth should occur. They have no solutions. They merely want to turn the clock back fifty years to the Los Angeles of another time.

The problem is that you cannot go back. Los Angeles is the least affordable place to lease or buy a home in the nation and has had the biggest housing price increase over the past 15 years in the U.S., primarily because it is so difficult to build anything here. One of the reasons why we have so much gridlock is because of people who over the years have refused to consider smart growth solutions that have been implemented in cities around the globe.

The Los Angeles metropolitan area has reached its physical limits. We cannot keep growing outward and forcing people to commute vast distances. We should not allow the interior areas of the City to deteriorate in order to “preserve” neighborhoods. We should not prevent affordable housing from being built in our city.

Smart growth advocates and planners will tell you that the successful planning model is to direct growth to occur along transit corridors. As our mass transit system is built-out, it will eventually enable people to travel where they need to go without using their vehicles. We are then able to preserve those single-family neighborhoods that are so valued by the initiative proponents. (This used to be referred to as the two-percent solution – to direct development onto two-percent of the land in order to preserve 98 percent of the land.)

Opponents argue that the mass transit system is not yet built-out and that we should wait until that occurs before we build around mass transit stations. However, if we wait, traffic will continue to worsen for everyone because housing and jobs will be built in places that only add to congestion.

They also argue that it is impossible to build new projects without creating more traffic. They are correct that there will be some additional traffic. However, by matters of degrees, the increase in traffic will be substantially less due to the nearby transit, and because jobs will also locate close to these stations. There are currently five mass transit lines under construction by Metro in greater Los Angeles – that is more than any place else in the nation. As these lines come into operation, it will be easier to see the wisdom of guiding development to transit corridors.

Hollywood is the poster child for those opposing development. They point to the 70 or so projects in the pipeline and argue that development will destroy the quality of life and the character of Hollywood. In my view, exactly the opposite is occurring. We are creating a great example of how urban development should happen – with walkable neighborhoods and jobs, shopping, and entertainment close by. Opponents seem to forget how bad things were in Hollywood 20 years ago. What has turned central Hollywood around is the new development. And this development is occurring in the center of Hollywood, close to mass transit. Parking lots are being replaced by exciting new development that make it an attractive neighborhood.

New development has made it possible to preserve historic structures. About 15 years ago, I was visited by representatives of the Los Angeles Conservancy who were concerned about the possible loss of two very historic properties – Columbia Square and the Palladium. Today, because of new development, both of those historic venues are saved and will again be show places.

I was recently told the story of a local resident whose children have moved to the East Coast with no intention of moving back to L.A. Why? Because they are tired of living in an urban area where it is impossible to get by unless you use a car and are stuck in traffic gridlock. Passage of this initiative will only perpetuate that ineffective and outdated model.

So I ask the proponents of this initiative to tell us exactly where they think development should occur. They have no answer to that question. And until they can answer it, then this initiative should be given no credence. If you like the current gridlock in L.A., it will never change with their plan. Their solution to go backwards is no solution at all. They would merely be preserving a model that we already know no longer works.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 23 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Target Should Not Be A Target Any Longer

For more than a year now, construction has been at a standstill on Hollywood’s new Target store at the corner of Sunset and Western Avenue.  This would be Hollywood’s first “department” store since Sears closed their nearby store in 2008.  This store will allow Hollywood residents to shop locally without having to leave the community for many necessities, and it will provide 250 critically-needed jobs for the neighborhood – if it is allowed to open.

Construction ceased because a neighborhood group sued, complaining that the City should not have granted an exception to what is known as the Station Neighborhood Area Plan (SNAP) that governs construction in the area.  A judge agreed and said the City should have changed the zoning on the property rather than granting an exception.

The City has now come back with a recommendation to meet the judge’s order by proposing a new Subarea F specific plan amendment to apply to large scale highway-oriented commercial projects.  This is a reasonable addition to the SNAP ordinance that addresses how superstores can properly fit into the urban context.

However from the tone of the first hearing last month, some residents are still not satisfied.  A few even called for the half-built Target to be torn down and rebuilt to the 35-ft. height allowed by the SNAP ordinance, with underground parking.

It may help to provide a little more background.  The SNAP ordinance allows mixed-use projects (retail and residential together) to be built to a height of up to 75-feet.  If a project is not mixed-use, it is only allowed to build as high as 35-feet. The City had felt the benefits of the Target project to the community merited an exception to SNAP to allow for the project to be built to the higher height.

Why are these residents so insistent on the 35-ft. height?  Some said that their desire is to have more mixed-use projects to meet the need for housing in the area.  Others pointed out that the Target in West Hollywood has underground parking and so this one should as well.

Now, by my latest calculations, there are 320 housing units under construction at the moment within the SNAP area and another 762 units in the pipeline.  That is nearly 1,100 housing units.  Exactly, how many housing units do they want to see?  Is it their object that every project that is built within SNAP be a mixed-use project?

As far as the desire to have underground parking, I would again ask why the parking must be underground.  The design of this project is such that the parking would be shielded and there would be other retail on the ground floor.  It is not going to be unsightly.  What is unsightly is this half-finished building.

Within the last month, two new mixed-use projects have been announced across the street on two sides of the Target.  Each of these will be six or seven stories and up to the 75-foot height limit.  So what would we be achieving by forcing the Target to be reduced to 35-feet?  Certainly not any view protection.  There is no reasonable rationale as to why a strictly-retail center should be limited to 35-feet when its neighboring buildings are at 75-feet.

The proposed new Subarea F designation for retail makes sense and should be approved.by the Planning Commission when it meets this coming Thursday, November 12th, at 8:30 a.m. at City Hall.  If you agree with me, I would urge you to attend the hearing and let the commissioners know that Hollywood needs this project and its 250 jobs.  It is time to move forward with a project that will benefit this community.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 23 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood