A CIM Group project that has become known for reportedly having the most entitlements in Los Angeles history is set to break ground on the northeast corner of Sunset Boulevard and Gordon Street in Hollywood, much to the dismay of some residents.

A rendering of the Sunset Gordon project illustrates its height over Sunset Boulevard, where the Old Spaghetti Factory was once located. (photo courtesy of CIM Group)

Called the Sunset Gordon project, the mixed-use development will feature a 23-story tower with 301 residences, 39,000 square feet of office space, 13,500 square feet of retail space and a public park.

Portland-based developer Gerding Edlen originally proposed the $182 million project as purely residential. However, after securing $9.6 million from the Community Redevelopment Agency, Los Angeles (CRA/LA), the company agreed to include office and retail, according to a CRA/LA statement. Gerding Edlen secured 17 entitlements on the property before financial issues, likely caused by the economic downturn and a lawsuit filed by the La Mirada Avenue Neighborhood Association, killed the project. CIM acquired the property in August 2011.

Even though Sunset Gordon has changed hands, the project has largely remained the same, which is disappointing to some Hollywood residents, who have been fighting Sunset Gordon for years.

“It’ll blow a hole in Sunset Boulevard,” Doug Haines, of the La Mirada Avenue Neighborhood Association, said. “This would be the tallest building in Hollywood at 260 feet.”

Haines, whose issues with the project are nearly endless, said Sunset Gordon is the “legacy of the stupidity of the CRA [Community Redevelopment Agency] and the city.” He said the project’s 17 entitlements clearly show that the high-rise is not meant for the area, especially when another major development that used CRA funding, Hollywood & Highland, only needed four.

“That’s a sign something’s wrong,” Haines added.

When seeking the entitlements, the project had twice the allowed density, half the required parking, was 215 feet higher than the zoning allowed and didn’t satisfy open space requirements, even with the park, which is being funded by taxpayers, he said. Another entitlement stems from two supergraphic signs that total 3,100 square feet, according to the CRA statement.

Nine of the 17 entitlements were variances. The La Mirada Avenue Neighborhood Association challenged all nine, though it lost in Los Angeles County Superior Court. On appeal, the 2nd District Court of Appeals ruled that three of the nine were without merit and ignored the other six because “they said we didn’t bring them up,” Haines said. He said the nine challenges were on the front page of their filing and mentioned throughout the briefing.

“I’d never seen anything like it,” Haines added.

Furthermore, Gerding Edlen had secured $3.668 million from CRA/LA and the Los Angeles City Council that was allowed to be used against the association in court, he said. The company later defaulted on that CRA/LA loan and “skipped town” with the money, Haines said, adding that Gerding Edlen later purchased an $11 million property in Venice.

He said CRA/LA has also issued a $6 million loan for office space at Sunset Gordon; however, as part of the agreement, if that space sits vacant, it’s possible that the money would not be repaid while CIM keeps the property.

“If that doesn’t happen, the taxpayers are practically screwed,” Haines added.

He also believes there is little to no market for Sunset Gordon, which makes the push to subsidize a project for a savvy developer during an economic crisis all the more perplexing. Haines said the area has no fiscal or housing need for the project, and the area isn’t without office space.

Demolition has been completed on the site, though that is controversial also. The building once housed an Old Spaghetti Factory, but it had also housed the Peerless Showroom, the Hollywood Auditorium, KNX and a Max Reinhardt Workshop.

“It has some really rich history,” Haines said.

He said Hollywood Heritage, a preservation organization, had made an agreement with Gerding Edlen to preserve the old building, specifically its façade. However, under different leadership, the organization agreed to allow CIM to demolish the building while removing the mantel, windows and trusses. Part of the building will now be re-created.

“Re-creation is obviously not preservation,” Haines said. “It’s a lot like Disneyland.”

He said many of the project’s variances were based on the hardships created by preserving the old building.

Christy McAvoy, of Hollywood Heritage, said the building had deteriorated to the point that CIM couldn’t fulfill the agreement to preserve some parts of the building. Therefore, the developer will attempt to recreate portions of the structure, she said.

“It’s a highly unusual situation for a building in Hollywood,” McAvoy said. “We don’t often recreate things.”

According to a statement by CIM, building demolition permits were issued by the city in January, and the work was completed on Feb. 21. In December, CIM and Hollywood Heritage amended their agreement to “redevelop the property permitting its demolition on the condition that the developer recreate the original 1920s building style.” According to the statement, that includes restoring and reusing the original heavy timber trusses and a fire mantel from the building’s central hall.

The project is scheduled for completion in the first quarter of 2014. Sunset Gordon will also include a pool, a business center with a conference room and a fitness center. The park will be 21,000 square feet.

CIM representatives declined to be interviewed for the story. Attempts to reach representatives of CRA/LA and the city’s Planning Department were also unsuccessful by deadline.