Category Archives: Hollywood

The Elephant in the Room

The legislative season is over, and we finally have begun to see our California legislature act on the housing crisis in this state. The Governor signed 15 bills that were intended to smooth the way to more housing being built.

Over the past year, you have heard me discuss the importance of addressing California’s housing crisis. So, I think it is appropriate to commend the legislature and the Governor for taking steps to start addressing what is an enormous problem.

Among the bills that were passed was a $4-billion bond measure to provide new affordable-housing units, a provision to streamline housing requirements in cities that aren’t building to state-mandated goals, incentives for cities to plan new neighborhoods, and prod local governments to get shovels into the ground, and giving the State the ability to review any action or failure to act by a city or county that it deems out of compliance with its housing element.

According to the California Department of Housing and Community Development, the State is currently falling about 100,000 units short each year in what it should be building to meet the demand. Under the best-case forecasts, the 15 new measures will only make a dent in the shortfall.

Our representatives admitted this is only a down payment on what is needed to really have an impact on the housing crisis. The fact is, the one way to resolve the housing shortfall in a big way is to spur the private sector to build more units. The only way to do that is to address the “elephant in the room” which is to reform the California Environmental Quality Act – more commonly referred to as CEQA.

Achieving CEQA reform is a monumental task because of the many special interest groups that have grown a cottage industry of using CEQA to squeeze developers for money, concessions, or to outright stop needed projects. The Hollywood Chamber was a part of a broad-based statewide coalition that worked for years to reform CEQA. A couple of years ago, we thought reform was finally doable. However, amendments were tacked on to the reform bills that would have ended up making CEQA compliance even worse, so the reform effort was dropped at that time.

Before that, in 2011, our Chamber convinced then-State Senator Curren Price to introduce SB735 for us. We thought we had the perfect solution – a measure that would strengthen the timelines for judicial consideration of CEQA cases. The idea was to require the courts to meet stricter administrative deadlines, enabling judges to decide cases as was originally the intent of the CEQA law.

However, our effort died when the State Judicial Council opposed our efforts, saying they did not have the wherewithal to speed up the process. Because we were just coming out of the Great Recession, there was no chance of providing the funding that they needed to expedite the process at that time.

So, when the Legislature takes this issue up again next year, I have a few suggestions. Why not provide more funding for judges to review CEQA cases and also to provide an expedited litigation schedule for resolution of an action and stricter timelines for appeal of a judgment for all projects? While we appreciate that the State extended an expedited schedule for court review of large Environmental Leadership Development Projects, this should apply to all projects – especially housing. Providing more funding for the courts review process might be the best investment the State could make in speeding up the construction of new housing.

This wouldn’t solve all CEQA-related problems, but it would be a start. While it wouldn’t please those whose goal is to delay and delay and delay, I believe the majority of Californians would support common-sense action that would still allow CEQA challenges but speed up the litigation.

And here is another suggestion. Rather than just encourage cities to meet their housing goals, why not add some teeth to hold cities accountable to meet the mandate of their housing goals? Just last month, the news media reported that the city of Redondo Beach approved a moratorium on new multifamily units even though they had only achieved 41 percent of their housing goals. If there are no penalties, cities will continue to consider meeting housing goals as a suggestion rather than a mandate.

There will be other suggestions made, but I thought I’d get a head-start out of the gate. Let’s encourage our legislature to take the hard steps to resolve the housing crisis.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 25 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

 

Building a Prosperous Hollywood

Hollywood has always been associated with new ideas. If you think about the early entertainment industry that located here, it was all about creativity and creating stories that would be compelling.

Here we are 100 years later, and creativity continues to rule in Hollywood, even as the entertainment industry undergoes a major transformation due to new technologies that are opening new opportunities. And so, it is logical to assume that Hollywood would be one of the places in Southern California popular with the new media and tech industry.

One example of the draw that Hollywood has become for new start-ups is with our shared workspace providers. The first to come to Hollywood was We Work, which opened its first Los Angeles location here in Hollywood in 2011. They will be opening their third Hollywood facility on Vine Street this fall. Among their 1,900 Hollywood “members” are entrepreneurs, freelancers, start-ups and small businesses. They provide work space for businesses, ranging from one employee up to 100 employees. Many of these entrepreneurial and tech start-ups may over time grow significantly – creating a lot of jobs. In addition to We Work, other shared workspace concepts have invested in Hollywood, including Neuehouse at Columbia Square, and HClub, which will open next year in the former Redbury Hotel. We expect this critical mass of new businesses to have a profound effect on Hollywood going forward.

One of the exciting new companies that has located in Hollywood is Pavemint – a company that is rolling out its app and services this month. The company relocated from Houston to Los Angeles in 2015, finding a home in a historic building on Hollywood Blvd. Today, they have 40 full and part-time positions.

Probably, the easiest way to understand this company’s model is as the “Airbnb” for parking. Their goal is to unlock the inventory of parking spaces in Los Angeles through a peer-to-peer marketplace.

For the past two years, they have worked on refining their app to work seamlessly for those looking for parking spaces. At the same time, they have been building up an inventory of parking within Los Angeles. Although not the first parking app to hit the market, Pavemint already has the largest peer-to-peer parking network in the U.S.

They chose Hollywood as their base for several reasons: first, they were able to find cool office space on Hollywood Blvd.; second, Hollywood was centrally located, and finally, Hollywood has a parking problem. They are continuing to expand their inventory of parking spaces here and throughout L.A., and later expect to expand to other cities.

This is a job-creating concept that wouldn’t have even been imagined a few years ago.

We want to continue attracting cutting-edge, creative companies like Pavemint to Hollywood and to have them grow here. In order to do so, we need to build an environment that is conducive for these growing firms, with incubator shared working spaces available to get them started and then an inventory of additional office space to grow into, workforce housing, shopping, easy transit access and entertainment. And we need to preserve the “cool” factor of Hollywood.

What is noteworthy is that a lot of what is occurring in Hollywood has happened organically, without a lot of “priming” from the government. Where the government must step in is to provide the services and security needed to keep this an attractive business location. That means being business friendly, addressing issues such as homeless encampments and providing needed services for mentally-ill homeless persons, which I’ll address in a future column.

Hollywood is well positioned to truly become a live-work model for the entire region. If we can demonstrate how to make this work successfully here, we can show other communities the way to facilitate growth and prosperity.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 25 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

New Hotels Enrich Hollywood and Los Angeles

Two new hotels opened in Hollywood last month – the Kimpton Everly with 216 rooms and the Hampton Inn Hollywood with 112 rooms. Together with the Dream Hotel that opened in July, we have added more than 500 rooms to the Hollywood market this year. This is a 15-percent increase in the number of hotel rooms in Hollywood, bringing our total rooms to 3,926 in 51 properties.

By my count, there are another 15 hotels proposed for Hollywood. I’m sure some people are asking if we can support all of these hotels. One important thing to remember is that the hotels do not all come online at once. It is a long-way from a hotel being proposed to under construction. There is no guarantee that all the proposed venues will be built. The marketplace will be the final determinant of what is actually built. The interest in building new hotels in Hollywood is a nice problem to have!

I recall back in the year 2000 when our chair-of-the board, Oscar Arslanian, and I trekked to Beverly Hills to meet with a representative of Hilton Hotels to convince them that they should come to Hollywood. At the time, we had a boutique hotel task force and were trying to get new hotel construction in Hollywood. It had been 25 years since a significant hotel had opened in Hollywood. Hilton turned us down, saying that the timing wasn’t right for a hotel in Hollywood. We were ahead of our time.

It was a frustrating period for us. Hollywood was the top tourist draw in Los Angeles County, and yet no new hotels were coming to our community. They were locating in neighboring cities, which meant transient occupancy taxes (TOT) collected by those hotels were also going to other communities. TOT taxes can be an important component of a city’s budget, so this was potentially a huge loss for Los Angeles. In L.A. during its last fiscal year, the city received $230.8-million in TOT taxes and another $27.5-million from short-term rental taxes. With Los Angeles facing a budget gap of over $200-million, finding new sources of revenue are key to its survival and maintaining services. Each new hotel that opens in the city helps fill the budget shortfall.

Aside from providing tax revenue to a city, there are numerous other benefits that new hotels bring to the community – one of which is jobs. The Dream Hotel and its associated restaurants employ about 800 people. The Everly Hotel has a staff of 125 and the Hampton Inn employs another 40. These are all new jobs, on sites where there were few jobs before. To be able to add this many jobs to our employment base is exciting. Yes, many of these jobs are entry level positions, but in this community with all income levels, we need both entry level and executive positions.

New hotels also add to the ambiance of a neighborhood. Infill development helps to activate the street. The areas around the Dream Hotel and Everly were previously “dead” as far as pedestrians. There was no reason for anyone to walk there. Now, you see people walking to and from these venues, which creates more interest but also makes the neighborhood safer. It is impressive to now see people walking in Hollywood, not just on the major thoroughfares, but also on the side streets. Hollywood is a model for the entire City on how to activate a neighborhood.

And hotels also are great public gathering spaces for locals – with lobbies, restaurants, meeting rooms, and in some cases, rooftop terraces that overlook the Hollywood Hills and urban L.A. As we all know, Hollywood has the unfortunate distinction of having little park and open space. This makes it even more important to have places where people can gather. The general manager of the Everly Hotel related to me that they are positioning their hotel as one that is serving the local neighborhood. Since this new hotel lies in close proximity to many of our hillside neighborhoods, it only makes sense.

The fact is new hotels enrich a community in many ways. Downtown Hollywood is becoming an even more attractive urban neighborhood by having these hotels to complement the residential, retail and office components that are coming online. The Hollywood hotel boom is a very good thing for our community and for the City as a whole.

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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.

 

Does the Middle Class Have a Future in Los Angeles?

Recently I read Richard Florida’s book, The New Urban Crisis. Among the critical issues he identifies is the decline of the middle class in our urban centers. What his research found was that the middle class is the smallest in the most economically vibrant places, in particular, what he defines as “superstar cities” and tech hubs. Los Angeles was identified as one of these urban areas where the middle class is the smallest.

At a meeting we held last week with Mayor Eric Garcetti, he voiced what is undoubtedly one of the most challenging issue facing Los Angeles – will our children be able to stay here and enjoy the prosperous community that has been built over the last generation. “We need a middle class and not just a service class,” said the Mayor, emphasizing that it is essential that the middle class not be squeezed out. The Mayor was right in highlighting this challenge.

If we cannot provide an opportunity for our children to remain here, what kind of a legacy have we provided? It does not matter if Los Angeles is able to provide middle-class jobs, if the cost of living is such that they cannot get ahead. I think each of us know of young people who have left the state as it has become increasingly unaffordable. I have two nieces, third-generation Angelenos, who moved to Colorado, in order to be able to purchase a home. I’m sure you can name a few.

Let me share a few statistics that I have seen over the last few months. The New York Times reported earlier this month that housing prices in L.A., San Francisco, San Jose, and San Diego have jumped as much as 75 percent over the past five years, making California the toughest market for first time home buyers. The median cost of a home in California is now over $500,000, twice the national average. California’s homeownership rate of 54 percent ranks last in the nation.

A recent article by Elijah Chiland noted that the real estate website Redfin reports that just 6.6 percent of homes listed in the greater L.A. region are considered affordable to residents making the median income. The problem is that while there have been significant increases in home values, wages in Los Angeles have risen less than half a percent since 2012.

On top of this, there is the issue of taxation. When you consider the compounding effect of the taxes levied at the state, county and local levels, it adds up to a huge disincentive for the middle class and young people to remain here. In an article published last month, Chris Nichols of Politifact, responding to the question of whether California taxes were really among the highest in the nation, provided the following facts: On a per capita basis, Californians pay $1,991 annually in state income taxes, which ranks fourth highest in the country. California has the highest-in-the nation sales tax rate of 7.25 per cent (and that is before local levies recently passed for such worthy causes as mass transit and homeless services). When the recently-approved 12-cent per gallon increase in the state gas tax goes into effect on November 1, 2017, it will make the California gas tax second highest in the nation.

Now, I am not arguing against the need for these new taxes and fees to address serious state and local problems. What I am saying is that the compounding effect of these taxes threatens our middle class.

Even property taxes, which we tout as low because of Proposition 13, create a heavy burden for those just starting out. Since median housing prices are twice the national average, the property taxes are still a hurdle, especially when compounded by additional parcel taxes and fees charged to property owners in a specific area to pay for special needs and public improvements.

The state legislature has introduced 130 housing measures this year to address the affordable housing issue. The City is considering linkage fees to fund affordable housing. The problem with many of these proposals is that it is impossible for government to solve the housing crisis with new fees to develop affordable housing. The amount of housing they could fund is only a drop in the bucket compared to what is needed.

Christopher Thornberg of Beacon Economics recently said that California would need to add between 800,000 and one-million additional residential units to move the state to national norms for housing stock and vacancy rates. In L.A., we would need a total of 180,000 to 200,000 residential units.

The only way to meet these type of numbers is to stimulate the private sector, which is now weighed down with government regulations that make it impossible for the free market to work the way it is supposed to. Our public officials are going to have to make some tough decisions if they really want to address the housing crisis.

Here are a few suggestions. At the State level, our representatives are going to finally need to reform the California Environmental Quality Act (CEQA) to stop egregious abuses of this law that can kill or delay needed projects for years. They need to approve language that treats infill development in urban areas differently than pristine open space. State and city officials need to incentivize developers to build low and moderate income housing units. There are ways to do this, such as increasing density for targeted units or reducing parking requirements, which would bring down costs on a per unit basis. And the courts need to be directed to accelerate the review of legal challenges to housing projects.

It took a long time for this housing crisis to develop, and it may take a long time to work through a solution, but we cannot afford to delay. Our legislators need to start acting now to solve this problem. If they don’t, the California dream may be a thing of the past for our vanishing middle class.

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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.

 

Hotel Complex is a Dream for Hollywood Jobs

When one thinks about the visionaries who made Hollywood what it is today, there are a lot of candidates to consider: Sid Grauman who dreamed up the picture palaces and movie premieres, C.E. Toberman, who built most of the grand buildings on Hollywood Blvd. and made the Hollywood Bowl a reality, the Chandler family and their associates who put the huge Hollywood Sign on Mt. Lee, Johnny Grant, who built the Hollywood Walk of Fame into an international icon – the list could go on and on.

And in fact, the list continues to grow. Last week, the long-awaited Dream Hotel opened its doors – the culmination of a 10-year dream by Richard Heyman and Grant King of the Relevant Group. These two gentlemen looked at a very nondescript stretch of Selma Avenue just west of Cahuenga and imagined something no one else saw – a thriving entertainment complex.

Their original vision was to convert an old industrial building into a hotel and to activate the adjacent derelict alley with restaurants. Over the years, that vision grew. They now envision up to four hotels within a two-block area. This is a case study in “place-making” if ever there was one. The two partners envision a vibrant neighborhood something akin to the Meat Packing District in New York. Looking at what they have already created, we can only imagine what another three hotels might do for that neighborhood.

What is especially noteworthy is that the new hotel and the four adjacent restaurants have created 700 jobs. That is significant in a stretch where the previous structure on the site probably provided less than 10 jobs. Not only do the venues provide employment, but they will also offer new entertainment opportunities for Hollywood residents, and will act as a magnet, drawing guests from throughout Los Angeles. It will help to perpetuate Hollywood’s image as the entertainment center of Los Angeles.

If you talk with Grant and Richard, they will tell you of the many challenges they faced to make their dream a reality. When they couldn’t get financing locally for the project, Grant went to China where he successfully raised the needed funding.

They simply did not take “no” for an answer. They wanted to bring the “A-game” to Hollywood, and they did. Besides Dream Hotels, they brought in the Tao Group, one of the most successful restaurant groups in the nation. These unique restaurants in the Dream Hotel complex are already receiving rave reviews, so be sure to check out Tao, The Highlight Room, Beauty & Essex, and Luchini.

When you visit the Dream, you will agree that it will be catalytic not only for that stretch of Selma Avenue, but for Hollywood in general. This type of project perpetuates the excitement about the revitalization of Hollywood. I often speak with developers who remark that they can feel the energy here and that they want to be part of it. They have heard through word of mouth that things are happening in Hollywood. When they come to visit, they experience it.

Hollywood did not become the name synonymous with the film industry by thinking small. It has always been associated with “dreamers” – but dreamers who made things happen.

As the Hollywood Chamber of Commerce, we congratulate Richard and Grant on their success and express our appreciation for their faith in Hollywood. We can hardly wait to see their next project.

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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.

 

Studio Purchase Is Good News for Jobs

Earlier this month, Hudson Pacific Properties, Inc. announced that it had finalized a $200-million acquisition of the historic Hollywood Center Studios. This is the third studio acquisition in Hollywood by Hudson Pacific. Based on their track record, it is very good news for Hollywood.

Hudson had previously acquired Sunset-Gower Studios and Sunset-Bronson Studios. They will now own a combined 1.2-million square feet of facilities at the three studios, including 35 soundstages on 41-acres. The acquisition makes Hudson Pacific the largest independent owner-operator of sound stages in the nation.

I first became acquainted with Hudson Pacific when they purchased Sunset-Gower Studios in 2007. They were in a competition against several other firms for the property. Theirs was the only proposal to keep Sunset-Gower as an independent studio. The other developers planned to replace the studio with housing.

While there certainly was the need for housing, I was very concerned about the potential loss of industrial space, especially since Hollywood only has about 200 acres zoned for industrial uses. It was a time when Hollywood’s future hung in the balance. Many entertainment-related firms had exited Hollywood in previous decades, including almost all of the television stations. We were very concerned that Hollywood might lose its historical role as a commercial center.

Fortunately, Hudson Pacific did get the property, and they followed up by investing in the infrastructure and revitalizing the studio. Technicolor moved into a new 115,000-sq.ft. building at Sunset-Gower, making it their North American headquarters. This was the first major entertainment firm to move into Hollywood in decades.

In 2008, Hudson Pacific acquired the Sunset-Bronson lot. At that lot, they have built 423,000-sq.ft. of office space, all leased to Netflix. Their projects, along with others completed by Kilroy Realty and J.H.Snyder, have helped reestablish Hollywood as a commercial center. With 2,800 housing units under construction and another 7,200 in the pipeline in Hollywood, these projects will help us to maintain an important jobs-housing balance.

So the announcement that Hudson Pacific has acquired the historic Hollywood Center Studios bodes well for Hollywood. Hudson, in making the announcement of the purchase, also stated that they plan to move forward with a new 100,000-sq.ft. creative office building and a 350-space parking garage at the lot, which will be renamed Sunset Las Palmas.

For those not familiar with this lot, it is one of the most historic and oldest operating studios in Hollywood. It was founded in 1919 by a partnership formed by C.E. Toberman, John Jasper and C.W. Bradford. At the time, C.E. Toberman, who was the “Mr. Hollywood” of his day, had plans to convert Hollywood Blvd. (which was a mishmash of residential, retail and industrial uses) into a grand street and wanted to remove all industrial uses from the boulevard. The creation of the lot, christened Hollywood Studios, Inc., helped accomplish that goal. Over the years, the studio became home to iconic television shows like I Love Lucy, The Addams Family, Jeopardy, and legendary films like Hell’s Angels, When Harry Met Sally, and The Player.

Hudson Pacific has been responsible for bringing hundreds (if not thousands) of jobs to Hollywood. They have played a major role in the revitalization of Hollywood. On June 22nd, they will be honored with our Excellence in Economic Development Award at the annual Hollywood Economic Development Summit. The honors are well-deserved. On behalf of the Chamber, let me say that we appreciate having such great partners as Hudson Pacific in our community.

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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 Few Observations about Measure S

 

With only two weeks to go until the election, there has been a lot of “ink” written on the topic of Measure S. You’ve heard the statistics about how this measure is going to cost our economy $1.9-billion and 12,000 jobs for each year it is in place. You’ve heard about its devastating impact on affordable housing, especially in light of the passage of Measure HHH to build permanent supportive housing that Measure S would make difficult to build. And you have heard the claims of the proponents that only five percent of the proposed construction within the City will be impacted.

With the debate drawing to a close, I would like to share a few of my final observations. Here are my thoughts:

  1. The idea for this initiative sprang from a small group of activists in Hollywood, who were not able to stop development here, and thought they would have a better chance by enacting a citywide moratorium. They have cloaked their real intent under the cover of popular terms such as “updating community plans” and “ending spot zoning”. They continue to minimize the impact of this measure (far below what real studies have shown). In reality, their goal is not to update community plans, but to stop all significant development that adds traffic near their homes.
  2. Almost everyone agrees that the City of Los Angeles project approval process leaves much to be desired and needs reform. The one positive result of the initiative is that it spurred the City Council to vote on February 8th to update L.A.’s 35 community plans every six years, which is realistically about as fast as the City can move in updating all of its plans. That vote has triggered creation of a new ordinance that will mandate these updates. If the ballot measure sponsors really cared about updating the plans, they would declare “victory” at this point and move on. The fact that they haven’t done so, tells you that they really have another agenda.
  3. The proponents of Measure S are disingenuous when they say that the moratorium will only last for two years. They know that it is impossible for the City to update all of its plans within that timeframe. They also know that there will be lawsuits challenging the approval of new updated community plans, which will prevent their implementation. It has now been five years since the Hollywood Community Plan Update was approved and then blocked by a lawsuit. We are still waiting for it to be reconsidered. This is a good example of what is in store if this measure passes. Voters need to understand that the moratorium likely will be in effect for years.
  4. In an ideal world, no exceptions would be granted to zoning rules. However, in the real world, that is not possible for various reasons. There are cases where spot zoning is needed, and where it demonstrably is a good thing. Probably the best example in Hollywood is our beautiful new Emerson College campus on Sunset Blvd., which has won numerous design awards. Under the previous zoning, about all that could have been built on the site was a hamburger stand. I don’t think anyone would argue that a hamburger stand was a better usage for that site. Until such time as community plans are updated to reflect today’s circumstances, there is a need to allow legislative bodies to exercise judgment to consider the issues in addressing development at specific locations. And, even after a plan is adopted, there is a need for flexibility. Changing circumstances, new opportunities that may never have been contemplated, or mistakes in classification require some flexibility in allowing exceptions. Granting exceptions to the rules should be infrequent, but blanket prohibitions of “spot zoning” without considering real life situations are not in the public’s best interests.
  5. Measure S is really a case of “the haves” versus “the have nots”. If you already own a home and don’t care about the larger community’s interests, then you may be inclined to vote for Measure S, but if you truly care about those who are just getting started in L.A. or who are forced to commute in from outlying regions, then this measure is not for you. Last fall I spoke with Councilmember Nury Martinez, who represents the 6th District, stretching from Van Nuys to Panorama City. She said it is a challenge to bring development into her district and that the Measure S moratorium would harm her efforts to do so. Her concerns are echoed in many communities across this great city. Other than Hollywood, Koreatown and Downtown L.A., most areas of L.A. are not seeing a great deal of new development. Many communities want and need development. As I have said before, developers are not the enemy. They are the ones who help to revitalize older neighborhoods. Our opponents forget how bad Hollywood was 20 years ago. It has been primarily through new development that we have been able to turn this historic film capital around. Where you see no new development is where you most often see communities in a state of decline. Measure S will perpetuate that problem and make it more difficult to revitalize communities.
  6. Measure S is about the future of Los Angeles. I remain convinced that one of the main goals of the proponents of this measure is to stop the addition of density near mass transit centers. The Palladium Residences project that seems to have been the genesis of Measure S (at least for the largest contributor to their campaign), is only one block from a subway station. Opponents of that project do not want density near transit centers, and yet they have suggested no alternative. The horizontal city model with connecting freeways may have worked when we had three million residents in this county, but it does not work when we have 10 million residents. In city after city, we have successful models on how development has been focused along mass transit lines in order to avoid increasing congestion elsewhere. That has also been the plan for Los Angeles. With the passage of Measure M last November, we have an opportunity to truly accommodate growth and new residents in a logical fashion. To not allow density where it makes the most sense will create future chaos for this region. It will result in a lot of housing and businesses moving outside Los Angeles, and it will force many new residents into peripheral areas, only worsening commute times. We cannot go back to the 1950s.

I add my voice to those who say that Measure S is the wrong remedy for Los Angeles. Now that the City Council has committed to regularly updating community plans, our energy would be much better spent on seeing that we get visionary, well-thought out plans adopted for each area of our city. Let’s work to see that good developments are added along future and existing mass transit lines, and that they contribute to making this a more livable city. That way, we will all be winners.

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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.

Keep the Momentum Going in 2017

As we begin 2017, I am optimistic about our future prospects in Los Angeles and Hollywood. When it comes to jobs, Los Angeles County has been moving in the right direction. In 2016, employment grew by 65,300 jobs and the unemployment rate declined to 5.1 percent.

Here in Hollywood, the news on the jobs front is also positive. Viacom has begun moving into its new home in Columbia Square and Netflix will be moving into the new Icon tower at Sunset-Bronson Studios within the next month. Netflix announced a week ago that they will take an additional 92,000-sq.ft. of office space at their new Hollywood home, bringing their total to more than 400,000-sq.ft. on that campus. Between these two companies, another 1,500 jobs will be added to the Hollywood market. These are good jobs that will provide opportunities for Hollywood residents and ancillary businesses.

Other positive prospects in Hollywood at the beginning of the year include the opening soon of two hotels – the Dream Hotel (which includes several restaurants) on Selma Avenue, and the Hampton Inn on Vine Street. Between them, about 300 hotel rooms will be added to the market and they will provide hundreds of jobs.

Later this year, we should see the completion of J.H. Snyder’s 1601 Vine Street office building and the Kimpton Hotel. There may also be a few additional ground breakings this year – provided Angelinos do not approve the ill-advised Measure S.

For the past year, we have debated this initiative that would place a two-year moratorium on significant building within Los Angeles – singlehandedly killing jobs, housing and reasonable growth in our city. The vote on this measure is coming up on March 7th.

Proponents say their measure will force the City to update community plans and to outlaw “spot zoning” and that it should only last two years. In actuality, it is much more complicated than that. Among the proponents are some of the people who sued to invalidate the Hollywood Community Plan Update in 2012.  Thanks to their efforts, the community is forced to operate under an antiquated plan that was adopted in 1988. What are the chances that any new community plan approved by the city will go into effect without a lawsuit challenging it?  In reality, the moratorium called for by Measure S could last for years under such a scenario.

L.A. city and county residents this past November overwhelmingly voted for reasonable growth. They passed Measure M, which will generate $860-million a year to accelerate the construction of a working mass transit system for this region. L.A. city voters also passed Measure HHH, a $1.2-billion bond to build housing for the homeless.

The passage of Measure S could put the brakes on plans to add density around mass transit stations and it could also make it very difficult to build housing not only for the homeless, but housing for anyone in Los Angeles. It would also apply to needed public improvements such as expansion of hospitals, etc.

I am indeed an optimist, and believe that voters will reject a measure that makes it difficult to implement the objectives that they just approved in November. However, it behooves all of us to do our part in educating our friends and neighbors about the negative ramifications of Measure S and to get out the vote!

L.A. is moving in the right direction on jobs. We need to continue that momentum. With the defeat of Measure S, I am convinced this will be another positive year for L.A. on the jobs front. Let’s make it happen.

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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.

5901 Sunset – A Project that Hollywood Needs

Two weeks ago, the Los Angeles City Council gave final approval to the 5901 Sunset Blvd. project, proposed by Hudson Pacific Properties. This is a marvelous project for Hollywood and Los Angeles.

The architecturally stunning building tiers back from the residential areas to the north so that the highest portion of the building is along Sunset Blvd. This approximately 300,000-sq.ft., 15-story office building would replace a parking lot that under the 1988 community plan was zoned for commercial uses like a hamburger stand, which no longer represents the development patterns in the area.

The proposed building is just west of the new offices of Netflix and east of Kilroy’s Columbia Square project. Similar in size to the Netflix building, it could bring as many as 1,000 jobs to Hollywood. With thousands of new residents moving here, it makes sense to locate jobs in close proximity to residential areas, so that we can truly encourage a live-work community. It would be one more step in Hollywood’s comeback as the home of the entertainment industry.

The developers, Hudson Pacific Properties, got their start here in Hollywood, and they are committed to this community. They first made their appearance more than a decade ago, when they purchased the Sunset-Gower Studios and saved this historic property as a working studio. Later they purchased the old Tribune lot, now known as Sunset-Bronson Studios. They have sunk millions of dollars into the upgrade of these properties.

They care about Hollywood and they are here to stay. Chris Barton of Hudson Pacific tells me that they want to make this a bellwether building for technology and the environment, and that they will be pursuing a LEED Gold designation. He expects it to be one of the most technologically-advanced office buildings in the country.

They have also agreed to an unrivaled package of community benefits as part of the project, totaling about $1.8-million. They are the first office developer to agree to contribute $1-million toward affordable housing, which will be built within the 13th Council District. They are contributing $50,000 to Helen Bernstein High School, $50,000 to Citizens of the World Charter School and $50,000 to LeConte Middle School, with another $25,000 going toward the Hollywood Central Park. In addition, they are contributing about $400,000 for other improvements in the Hollywood community.

Los Angeles needs jobs and it needs jobs that pay well. Back in June, the L.A. County Economic Development Corporation forecast that between now and 2020, most of the jobs being created in the county will pay below the median wage. At a time when the majority of the new jobs will be in the lower tier, we have a chance to have a facility built that will bring the type of jobs that are needed – jobs that enable people to afford to live here.

Hudson tells me that they are moving forward with plans to break ground in the first quarter of 2017. This is truly a win-win for our community … and yet, there are those seem to want to find fault with everything and may try to stop it with another lawsuit.

The attorney for one of these opponents wrote in her appeal of the project that it would “introduce inconsistency into the land use planning documents for the Hollywood area, will eliminate the possibility of creating a truly pedestrian-friendly section of Sunset Boulevard, and will contribute to the increasing – and unstudied – densification of Hollywood site-by-site.”

She obviously would like people to forget that the City Planning Department spent eight years studying where best to place density. When the City passed its updated Hollywood Community Plan in 2012, this stretch was rezoned to encourage office development. It makes sense, being only a block from the freeway and close to Metro stations, where the impact on surrounding neighborhoods is limited.

The fact is conditions change. In 1988, the only type of business that would have located on that stretch of Sunset Blvd. was a fast-food outlet. Now that the community has turned around and there is an opportunity to build and plan for the future, it is idiocy to say that we should only build what was envisioned in 1988.

As far as creating a pedestrian-friendly boulevard, I’ve noticed a significant increase in the number of pedestrians in the area as the nearby Columbia Square project nears completion. Likewise, this project will do an amazing job of activating the street and bringing pedestrians back to an area where virtually no one walked.

This is a project that is needed and which will improve Hollywood. I wasn’t here in 1988 when the current community plan was adopted, but I was here in 1992 and it was not a pretty picture. To those who are against virtually everything, I would say it is time to stop making excuses to justify your opposition to good projects. If you have valid concerns, let’s hear them. If not, then let good projects that are well-designed and create badly-needed jobs like 5901 Sunset proceed.

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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 Hollyw

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