Major Development Greenlighted In Beverly Hills

BEVERLY HILLS, CA — The Beverly Hills City Council voted 4-1 Tuesday to move ahead with One Beverly Hills, a proposed $2 billion project on 17.5 acres of prime Beverly Hills real estate that will serve as a new city hub and landmark.

The council is expected to sign an official ordinance of approval on June 8, ending hours and hours of marathon study sessions devoted solely to analysis of the wide-ranging project. The development will consist of two towers 469 and 310 feet tall that will include residences, hotel rooms, retail, and restaurants, surrounded by partially public botanical gardens on the site of the existing Waldorf Astoria and Beverly Hilton hotels, a triangle between Wilshire and Santa Monica boulevards.

Mayor Robert Wunderlich and Councilmembers Lili Bosse, Lester Friedman, and Julian Gold all cited the millions in revenue the expansive project is expected to generate for the city. The developer will pay the city $100 million “public benefit fee” upfront from the property, the single largest payment by a developer in the state. Condo sales, in addition to a 5% luxury hotel room tax, are expected to total at least $1.7 billion.

“Point of fact, in the first five years we’re going to have at least 50% more,” Gold said. “We’re going to have at least $150 million generated in that first five years based on the sale of these units, based on taxes and things like that. So in reality, the $100 million is a number but it’s really not a complete number nor a complete picture of what this is...I honestly think this is a deal that affords the city enormous financial benefit and a benefit that will accrue in the years and decades to come.”

Councilmember John Mirisch, the lone dissenting vote, said that the swank project will not contain enough affordable housing, and proposed setting aside 15% of the project for affordable housing. The unprecedented public benefit fee allows the Council to bypass the city’s Interim Inclusionary Housing Ordinance requiring affordable housing.

“No developer should be able to buy their way out of that responsibility,” Mirisch said. “If we take money from that pot for affordable housing, then less is left for police, fires, schools, parks, and other services.”

Other councilmembers pointed out that the project’s astronomical revenues could fund “as much affordable housing as we want”, in the words of Vice Mayor Lili Bosse, who sat on the project's negotiating team alongside Councilmember Lester Friedman.

The development agreement gives the council leeway to fund affordable housing as it sees fit, rather than a fixed percentage. “As we develop the needs, assessment of our affordable housing and as we identify the places where we might want to put it - this agreement allows us to do what we need to do in order to get that done,” Gold said.

Other controversial elements of the plan include a fractional ownership plan for some condos to be sold in shares, which would allow residents to spend just a portion of their time there. Mirisch and Wunderlich opposed the “timeshare” plan (a phrase project lawyers dispute, calling it an “ownership product” instead), and Mirisch said he would rather see those units become hotel rooms.

Friedman, Gold, and Bosse gave preliminary support to the plan, which Friedman said might lead to full-time ownership, but they asked for more information about it before lending their full support.

Councilmembers had also voiced concerns about public access to the public portion of the botanical gardens on Santa Monica Boulevard. Previously, residents would need to walk through private development grounds in order to get there. In a May 27 meeting, Mayor Wunderlich asked for an outdoor elevator or escalator to help visitors enter without entering the property. The development team returned Tuesday with a rendering of a spiral ramp entrance to the gardens containing an elevator running through the center of the spiral.

The expansive, high-profile project has not been without controversy, despite often glowing support from four of the five councilmembers and many Beverly Hills residents. Some members of the public have questioned the project’s height and scale, and high-profile Beverly Hillers Andrea and Rick Grossman emailed a scathing critique to the Council that the project’s lawyers called “defamatory” and urged them to retract.

In May, developer Beny Alagem and lawyers for the Waldorf Astoria emailed the Grossmans urging them to immediately retract the letter, saying it might cause “significant harm to Mr. Alagem personally and to the proposed development of the multi-billion One Beverly Hills project.”

Planning Commision Chair Peter Ostroff wrote the Council a letter about Alagem’s email, which he referred to as “troublesome” and “intimidation.” Councilmembers criticized Alagem’s behavior, calling it “heavy handed” and examples of “lawyers gone wild.” Mirisch pressured One Beverly Hills President Ted Kahan on whether lawyers would stop sending similar letters to residents, to which Kahan replied simply, “Yes.”

Alagem later offered the Grossmans his “sincere apologies.”