Category Archives: Business

Business, Economic Development, Hollywood, Hollywood Chamber, Revitalization

Hollywood is well-positioned for Future Growth

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Welcome to my 54th and final It is All About Jobs column. I started this piece several years ago to relate the importance of jobs to our economy and prosperity. Providing good jobs is essential if we are to keep up with the high cost of living in Los Angeles and California. I feel strongly that is where we need to keep our focus as we address challenges.

I will be retiring from the Hollywood Chamber of Commerce at the end of December – ending 26 years of working to bring Hollywood back from a decades-long economic slump. Hollywood is now well-positioned for the future and has done its part to address the jobs issue. I am retiring feeling confident as to its future.

Hollywood has demonstrated more than virtually every other submarket in Los Angeles County how to achieve a jobs-housing balance. More than 800,000-sq.ft. of office space is under construction today along with 2,900 housing units. Most of the office space has been pre-leased by Netflix, which is definitely becoming a major player in the Hollywood market. The company recently leased 325,000-sq.ft. at Hudson Pacific’s Epic project and another 355,000-sq.ft. at Kilroy’s Academy on Vine development. This, coupled with previous leases, will bring Netflix to 1.1-million sq.ft. of office space in Hollywood when occupied.

To realize how significant this is, you need to understand that in 2015, Hollywood’s Class A office space totaled only 973,564-sq.ft. according to JLL. Netflix has leased more space than the entire inventory of office space we had available only four years ago. Our recent building boom in commercial office space has reestablished Hollywood as an important commercial center.

Netflix’s recent leases are huge wins for Hollywood. One local developer explained to me that leases this large create their own ecosystem. We can expect other firms that do business with Netflix will move in. We will see new restaurants and service businesses spring up, and we will see existing businesses benefit as well from the added customers. We are already seeing more pedestrians on the sidewalks and more energy and vitality in the neighborhood. And the residential projects that are under construction should have no problem finding occupants for their units. Hopefully, we will also finally begin to see major retailers seeking space in the Hollywood market.

It wasn’t that many years ago when we feared Hollywood’s commercial district was in danger of being lost. The City had approved an adaptive reuse ordinance which allowed property owners to convert outdated commercial buildings to residential uses. While the law had many positive benefits, we still lost about 200,000-sq.ft. of office space with no future space on the horizon. We were faced with the conundrum of not being able to attract class A tenants because we had no new class A office space, and we couldn’t attract new office developments because we couldn’t demonstrate there was a demand by tenants for office space in Hollywood.

Fortunately for Hollywood, three major developers – Hudson Pacific, Kilroy Realty and J.H.Snyder entered this market and all built new office buildings, despite our not having a track record. Their faith in Hollywood paid off. Hollywood has now proven itself as a viable office market. Its future as a commercial center is assured.

So, as I step off the stage, I feel very comfortable with how things have progressed to rebuild a viable commercial district in this historic community. I will be watching with great interest from the sidelines to see the progress that is made. Hollywood has a bright future today because of our success in bringing new jobs and development to the community. I wish my replacement as President & CEO, Rana Ghadban, the very best. I know she will take the Chamber and community to new heights. Hooray for Hollywood!!

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 26 years. He will be retiring at the end of the year. His last day will be December 27th. He can be contacted after that time via email [email protected]. His tenure since 1992 oversaw the great comeback story of Hollywood.

 

Business, Culture, Hollywood, Revitalization, Theatre

Hollywood Reinforces its Entertainment Reputation

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Last week, the CIM Group and the Pantages Theatre made a very significant announcement for Hollywood.  The two companies announced that they have signed an agreement to bring Broadway productions to the Dolby Theatre at Hollywood & Highland, beginning in 2020.

The Hollywood Pantages Theatre, owned by the Nederlander Organization, is truly one of the treasures of Hollywood. The visual splendor of the theatre complements the wonderful Broadway productions produced there.  An evening at the Pantages makes for a magical and memorable evening.

The stunning Dolby Theatre is known worldwide as the home of the Academy Awards and other award shows, but this announcement is very good news for Hollywood.  The agreement between these two legendary venues means that Southern Californians will be able to enjoy more Broadway productions and lengthier runs on popular productions.

This will especially be beneficial for Hollywood restaurants and retail businesses as more people are drawn to our community on a nightly basis.  It also “further cements Hollywood as the entertainment capital” for Southern California, as the press release making the announcement stated.

As the President & CEO of the Hollywood Chamber of Commerce I follow what is happening elsewhere that might pose competition or create problems for our community.  Recently, I have started seeing press releases and news stories from Downtown L.A. boosters hoping to supplant Hollywood as the “entertainment capital”.   Downtown is truly going through an amazing renaissance, and we wish them well … BUT, let me tell them that Hollywood does not plan to roll over and play dead so that they can take our place.

There is only one Hollywood.  We are the entertainment brand – in fact, one of the strongest brands in the world.  Over the years, we have worked hard to maintain that brand.  The Hollywood Walk of Fame, for example, is one way we constantly reinforce our entertainment reputation.  We have the Hollywood Bowl, the Greek Theatre, the Pantages, the El Capitan, the Egyptian, the Dolby and so many other entertainment venues.  Japan House, our unique new cultural center celebrates its grand opening this weekend.  Just as Downtown is undergoing a renaissance, so is Hollywood.  Having been here for 26 years, I have truly witnessed the amazing comeback of this community.   Three new hotels opened last year and three more are under construction this year that will provide even more opportunities for entertainment.

I am optimistic about Hollywood.  There is a lot going on here, with more office construction currently than any other community in Los Angeles County, and thousands of units of housing under construction.  Even with that, it is critical that we not “rest on our laurels” but seek to stay competitive with new attractions.

I feel confident that Hollywood will continue to have a bright future, because of companies like the CIM Group and the Nederlander Organization that recognize the opportunities here and which are investing millions of dollars to enhance our entertainment offerings.  Nothing like a little friendly competition to keep us on our toes, but so long as Hollywood continues to attract major investors and new stakeholders, I don’t think we will have to worry.  After all, we are HOLLYWOOD!

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 26 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

 

Business, City of Los Angeles, Community, Competition, Customer Service, Hollywood Chamber, Trash

A Case Study on Why We Need Competition

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In the 38 years that I have worked in the City of Los Angeles (at two chambers of commerce), I have never seen anything quite like the rollout of RecycLA. It is fair to say that it has been nothing short of a disaster.

Los Angeles Times columnist Steve Lopez has had a field day skewering the program. The Wall Street Journal has editorialized against it. Some councilmembers are now calling for a study on how to kill the program, and there is even the threat of a citizens’ initiative to force the City to pull the plug.

Since July, the Times reports there have been more than 28,000 complaints of missed collections and poor service. Rates have skyrocketed. We have members who report their trash collection fees have more than tripled – and unfortunately this is not a rare occurrence. Ratepayers report sharp increases across the board from when they had control of their own trash services. The City Council has begun holding hearings to determine where things went wrong – time that they could be spending on other important matters if they didn’t have an unfolding debacle with which to deal.

How did this mess occur? Perhaps an explanation can be found in the City’s justification of the RecycLA program to “expand recycling, improve workers’ pay and conditions, and put cleaner burning refuse trucks on the street.” While those are worthwhile goals, what is obviously missing from the statement is any reference to improving service to the City’s customers – the businesses and residents’ groups forced to use this program. Somehow the City seems to have forgotten whom they serve.

Hearings on the proposed program began back in 2011. The City was under the gun to comply with a State directive for mandatory commercial recycling. At the time, the debate was whether to go with exclusive or nonexclusive franchise districts. The chief administrative officer (CAO) for the City recommended going with a non-exclusive system in order to preserve competition. Despite that recommendation, the City Council approved an exclusive system. Our chamber was represented at every hearing as were numerous other business organizations. We warned then that eliminating competition was a recipe for disaster – but hardly anyone listened. So now, with the debacle that has occurred, I think it wouldn’t hurt to refresh everyone’s memory on why competition is a good thing, and what happens when you grant exclusive franchise contracts.

If you google the word “competition” on the internet, you can find excellent material. Forbes, for example, has identified five reasons why competition is the best solution. Consider the following:

  1. Innovation – healthy competition encourages change and innovation, which leads to improvements and helping a company distinguish itself from the competition.
  2. Customer Service – competition forces a business to improve its service in order to compete for customers.
  3. Complacency – without competition, businesses become complacent. Competition forces a business to innovate.
  4. Understanding your core market – Competition moves a business to focus on its core audience and to figure out how to provide better service.
  5. Education – having competitors helps a business better understand what works and what doesn’t and can provide valuable insights.

These points illustrate why the City is going to have a difficult time reforming RecycLA to be effective. When you eliminate competition, you are headed for trouble. When you have an exclusive contract, what is the incentive to try and improve? You cannot legislate good service.

The Federal Trade Commission, which administers antitrust laws, has said that “competition in the marketplace is good for consumers and good for business. … When firms compete with each other, consumers get the best possible prices, quantity, and quality of goods and services.”

Yes, in certain instances, there can be justification for a monopoly, but by and large, that should only be a rare occasion, such as with certain utilities. And even with utilities, there is a debate on whether we would be better served with competition (remember the break-up of telecommunications? Somehow, we not only survived but prospered with the advent of competition).

I don’t know if the City can find a way to back out of a 10-year contract with the trash haulers holding these exclusive franchises. That part of this sad saga has yet to be written, but let’s hope that the City’s decisionmakers have learned why competition has been the basis of the U.S. economy for more than two centuries. It is one of the main reasons for our country’s success. I’ve always found it best not to mess with success.

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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.

 

Business, Community, Culture, Economic Development, Hollywood, Jobs

Innovative Japanese Stores Help to Revitalize Hollywood

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As the year winds down, it is nice to be able to share some very positive news. Hollywood will soon be the home of two very innovative Japanese concepts, Japan House and Miniso, that are both scheduled to open within the next couple of weeks.

Japan House is a unique project of the Japanese Ministry of Foreign Affairs. It is a world outreach effort to promote Japan’s best art, cuisine, design, entertainment, fashion and technology. Three world class cities where there is a strong Japanese influence – Sao Paulo, Brazil; London, and Los Angeles – have been selected as the sites for the program. Because of its heavy pedestrian and visitor traffic, Hollywood was chosen as the site in L.A.

Yuko Kaifu, president of Japan House L.A., explained that the aim is to nurture a deeper understanding and appreciation of Japan, by creating a hub from which to showcase and communicate Japan as a country of countless charms, able to enrich the rest of the world.

Japan House will occupy a total of 14,000-sq.ft. at the Hollywood & Highland center on the second and fifth floors. Its various elements include a retail shop and small café on the second floor that will carry an expertly-curated selection of unique Japanese products, scheduled for a soft opening on December 20th. Also on that floor will be a gallery space, which will feature as its first exhibit “Anrealage: A light un light”, showcasing works of innovative fashion designer Kunihiko Morinaga, who uses photosensitive fabrics in his collections. That exhibit is set to run from January 19 through March 21, 2018.

The fifth floor will open in summer 2018 and will house a library, a salon and restaurant, where visitors can browse books on Japanese culture, attend lectures and demonstrations, and dine on fine Japanese cuisine. According to Michael McDowell, Executive Vice President of Japan House L.A., the 40-seat high-end restaurant will rotate in top chefs from Japan.

Miniso

Set to open a flagship store in Hollywood in January is Miniso, a rapidly-expanding Japanese seller of lifestyle products. Miniso is occupying 4,757-sq.ft. of space on Hollywood Blvd. that was previously occupied by American Apparel. The firm specializes in providing simple high-quality products at competitive prices. The majority of their items range from $1.99 up to $30.

The company has opened 1,000 stores around the world in the past three years, and its revenues doubled from $750-million in 2015 to $1.5-billion in 2016. Five stores are set to open in California. Besides Hollywood, there will stores in Santa Ana, Lakewood, and Moreno Valley. A store in Pasadena has already opened.

The location of these two unique concepts in Hollywood is encouraging. Especially with other retailers retrenching, there is a need for to rethink retail. The type of retail that can still succeed is experiential, one-of-a kind concepts. Japan House and Miniso both fit that model. We will be watching to see how both stores (and the fine dining restaurant) perform. Their success would pave the way for other similar concepts to come to Hollywood.

What is particularly encouraging to us is that they both recognized the potential of locating in Hollywood. We have been expecting to see an upswing in retailers. With the rapid revitalization that is occurring in Hollywood, we have seen new residential, office and hotels, but have yet to see a significant turn-around with retail. Hopefully, these stores will lead the way.

I’m planning to visit the new stores as soon as they open. I hope you will also!

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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.

 

Business, Community, Employment, Hollywood, Jobs, Parking, Revitalization

Building a Prosperous Hollywood

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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.

Business, City of Los Angeles, Community, Employment, Hollywood, Hotels, Jobs

New Hotels Enrich Hollywood and Los Angeles

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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.

 

Business, City of Los Angeles, Community, Economic Development, Employment, Hollywood, Jobs

Does the Middle Class Have a Future in Los Angeles?

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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.

 

Business, Community, Employment, Hollywood, Hotels, Jobs, Revitalization, Tourism

Hotel Complex is a Dream for Hollywood Jobs

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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.

 

Business, City of Los Angeles, Community, Economic Development, Employment, Hollywood Chamber, Jobs, Real Estate, Target

Musings About a Target

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By now, most people have heard the disappointing news that Superior Court Judge Richard L. Fruin, Jr. has once again sided with a very small group of plaintiffs to prevent Hollywood’s new Target from being completed. I thought it might be appropriate to offer of few of my own observations on this sad state of affairs.

Let me first offer a little background. It has now been nine years since Target first filed to build a store in Hollywood. When it was initially approved by the City and threatened with a lawsuit, Target decided to do a complete Environmental Impact Report (EIR) to strengthen its case against lawsuits. However, that later proved to be of little value.

At issue was a quirk in the Station Neighborhood Area Plan (SNAP) that governs development in that area. The SNAP ordinance allows projects that are strictly retail to only be 35 feet in height, but allows mixed-use projects to be up to 75 feet. The City Council and Planning Commission felt that the Target would be a benefit to the neighborhood and granted a variance to allow the project to be built at the 75-foot height.

The La Mirada Neighborhood Association, which is reputed to have only two or three members, sued. Judge Fruin ruled that the EIR was fine, but that the city erred in granting a variance and should have changed the zoning.

The City, in order to comply with the judge’s order, created a new Subarea F zoning category for big box retail centers. Once again, the La Mirada Neighborhood Association sued, saying that the City should have performed a new EIR to justify the new zoning designation. And once again, the judge agreed with the plaintiffs. It serves no purpose to rebut the judge’s rationale for his decision, but I would like to share my thoughts on what a loss it means for Hollywood.

Between 250 and 300 permanent jobs have been lost to the community now for several years because of these lawsuits. These are jobs that could have been filled by many of the low-income residents in the neighborhood close to the Target site. In addition, the Target would have provided expanded shopping opportunities for our entire Hollywood community, and would have been within walking distance for many low-income neighborhoods. It is only two blocks from the Hollywood/Western subway station and so is easily reachable from all areas of Hollywood. We haven’t had a department store since Sears closed its Hollywood store in 2008, so this would have been a wonderful addition to the community.

I get more questions about the status of the Target from both residents and businesses than any other subject. There is overwhelming support in Hollywood for this store. So the question is “What are the specific reasons why these few people are opposing the Target so vehemently?”

Robert Silverstein, the plaintiff’s attorney, usually responds that the plaintiffs aren’t against a Target – they just want them to follow the city’s rules. My objection to that answer is that rules set by a city are not cast in stone. Historically, cities have always had broad discretionary powers to determine land use within their bounds. The SNAP ordinance is not the U.S. Constitution. The City should have the right to make changes as circumstances warrant.

We live in an urban area. What value is achieved by limiting a retail center to one story? When we have attended past hearings on the Target, the main justification of the opponents for their position is that they want housing built in the neighborhood, not just retail centers. If developers wants added height, they have to provide housing as well, they say. They also have voiced concerns over views being blocked or a building built out-of-scale with the neighborhood.

I could understand these arguments eight years ago, but circumstances have changed dramatically since that time and the rationale for those positions no longer applies. In the interim, three projects have been announced and are in the entitlement phase across the street from the Target that will provide 1,293 housing units. These projects will all be as high, or higher, than the Target. So what purpose is to be achieved by forcing the Target to be torn down and rebuilt at one story? My answer would be “Absolutely none.”

The opponents can bask in their latest court victory, but in my view, they should be asking themselves if they are really serving the greater good for Hollywood? If Target pulls out because they are tired of fighting this small group of naysayers, have the interests of Hollywood really been served? Does the loss of these needed jobs and shopping opportunities mean anything to the opponents?

Being with the Chamber of Commerce, I am an eternal optimist. We have been through some difficult times in Hollywood, and despite setbacks, the community’s revitalization continues to move forward. I remain hopeful that a solution can be found so that the Target can be completed. Meanwhile, I would urge everyone who is supportive of having the Target finished, to not be silent. Let the La Mirada Neighborhood Association know how you feel.

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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.

Business, City of Los Angeles, Economic Development, Hollywood, Infrasctructure, Measure S

A Few Observations about Measure S

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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.