California Apparel News

Downtown Los Angeles’ fashion status may get a major boost of confidence following the July 14 announcement from Staples Center developer Anschutz Entertainment Group about its longplanned $1 billion hotel and entertainment village project, which will bring a hotel, concert theater and music club to an area just west of the Fashion District.

AEG and city officials said the new sports and entertainment district will give Los Angeles Fashion Week organizers, who recently moved events from downtown to the Westside, and others more reasons to come downtown.

AEG, in coordination with Los Angeles–based co-developer Wolff Urban Management Inc., plans to break ground this fall on a 1,200 room yet-to-be named hotel that developers expect will anchor convention center traffic. The hotel will also be the closest lodging to the Fashion District and the L.A. Mart, where apparel and gift shows are held.

AEG has signed on telecommunications giant Nokia to brand the center’s entertainment elements, including the 7,000-seat Nokia Theatre, which organizers expect will host mid-size awards shows and other events. The theater will also contain a television and radio broadcast center similar to the one found at Hollywood & Highland. Next to the theater will be Club Nokia, a venue for bands and cultural events. The Nokia Plaza will be a 1-square-acre open-air plaza with giant LED screens—agrave; la Times Square—designed for outdoor concerts and media events. There will also be space for retail businesses and a cinema complex with up to 4,000 seats.

A 140,000-square-foot Lawry’s Foods center— featuring restaurants, a gourmet market and a culinary center with Food Channel–type programming, culinary classes and events— will also be part of the project, which will encompass 4 million square feet of building area and six city blocks. Developers will build several restaurants and retail businesses and as many as 4,000 housing units.

The housing developments will include an expansion of the Fashion Institute of Design & Merchandising campus, which will receive 112 student housing units at the corner of South Flower Street and West Olympic Boulevard. FIDM President Toni Hohberg, on hand for the announcement, said the new building will allow the college to relocate its library, expand its main campus and provide housing for up to 350 students. The school does not currently provide on-campus housing but contracts with several nearby building owners for living space. The new facility is scheduled to be completed in three years.

Hohberg said the expansion will also include a study center for students taking costume design, special effects and other entertainment industry classes. “We are seeing more influence from the entertainment industry, so this will fit in nicely. It’s an exciting time for us,” she said.

The overall project will be built without using taxpayers’ money, in a manner similar to how the Staples Center was financed.

“We’re reinvesting the taxes created by the hotel. We’re not asking for subsidies,” said AEG President Tim Leiweke. “This is a home run, a no-brainer.”

While taxpayers will not fund the project directly out of their pockets, AEG will look to the city to waive permit and processing fees as well as bed-tax rebates for 20 years. Bed taxes are charged to guests by hotels and generally go into the city’s general fund. AEG will also ask the city for a loan to finance the construction of 100,000 square feet of conference space within the hotel.

Most of the project funding is coming from Wolff and Apollo Real Estate Advisors, which signed a letter of intent requiring AEG to subordinate the value of the land, provide long-term signage and work with the city to develop a parking plan for hotel guests. The project is expected to create 19,000 jobs and $15 million in new tax revenues and have an annual impact of $3 billion.

The hotel will be the key driver of the project. Wolff Chief Executive Officer Lewis Wolff said the company has yet to finalize a deal with an operator, despite rumors of a W Hotel signing on.

“We haven’t chosen a brand yet, but it should come pretty soon,” he said.

The developer did say it will build a single 55-story hotel rather than complete a twobuilding project that had been considered previously. Regardless, city officials have been eyeing a convention hotel for years to attract the traffic needed to propel growth.

“This city falls behind Des Moines, Iowa, when it comes to convention traffic,” Leiweke said. “We don’t have the infrastructure.”

Carol Schatz, president of the Central City Association, said the project will be important to accommodate the growing residential base in downtown.

“We will see 3,300 units available within the next 12 months along with 3,500 more in the pipeline,” she said. “This will get these people as well as people from all over the region to come downtown.”

Mayor James Hahn said one step to making downtown more inviting will be calming visitors’ fears about crime.

“We’re working with the chief of police on that,” Hahn said. “With Staples, we’re seeing safety in numbers. People are reclaiming the streets. We have condos now that are selling for over $1 million.”

Leiweke said groundbreaking should get underway in November and overall construction will be completed in about eight years.