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The Los Angeles City Council on Wednesday approved an agreement to sell prime property in the heart of Hollywood for $825,000 to development firm Pacifica Ventures, paving the way for the Santa Monica-based company to build Hollywood’s first speculative office building in more than a quarter-century. The property is expected to cater to entertainment office tenants, which Hollywood has long tried to attract.
Though the prospective eight-story building at 1601 N. Vine St. still must gain final city approval, the council’s 11-1 vote to authorize the sale by the city’s Community Redevelopment Agency makes it very likely the project will be given the green light.
If all goes as planned, construction of the $60 million building would begin by the fall and the development would open in 2013, said Hal Katersky, Pacifica’s chairman. He is hoping to snag up to three tenants for the 107,000-square-foot tower and says that talent agencies, entertainment law firms and divisions of movie studios have expressed interest in the property.
“A lot of the space in Hollywood is pretty crummy. This will answer that question,” Katersky said. “It is a magnificent building.”
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Some view the project as an important catalyst for spurring further office development in the area. The property is situated on the Vine Street corridor — a section of Hollywood that has been given a boost in the last year or so by the opening of the W Hollywood Hotel & Residences and the Redbury Hotel. However, the project has not been without its troubles.
There was the issue of Molly’s Burgers, a longtime hamburger stand that is located on the property. Last year Pacifica and the redevelopment agency reached an agreement to pay Kwok Yi, owner of the shabby burger shack, $1.1 million to vacate Molly’s so that Pacifica can raze it. Some opponents argued that the stand, which dates to 1929, is historic and should be preserved.
Others have taken issue with the deal struck by the redevelopment agency to sell Pacifica the property for $825,000, contending it is unfair because the property is worth far more. However, a redevelopment agency official told The Hollywood Reporter in November that the low sale price stems from the agency’s ability to reduce the book value of the property in order to spur development.
The property was also the subject of a controversial deal between Pacifica and the redevelopment agency in 2006. The agency actually purchased the property from Pacifica for $5.46 million that year, even though the site had appraised for roughly $1.4 million less. That had caught the attention of the City Council, though earlier this year the redevelopment agency said in a report to the council that it had found no evidence of misconduct.
Katersky said he expects to gain final approval for the project by the end of the summer.
“It means that Hollywood will finally have a Class A, state-of-the-art office building,” he said.
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