Some local stakeholders are questioning why the developer of the Sunset Gordon project, CIM Group, is requesting an additional $1.25 million from the city for a park — despite claims that the city’s obligation for the park had been paid in full.
Hollywood Studio District Neighborhood Council chair Bill Zide said that in 2008, the former Community Redevelopment Agency, Los Angeles, and the Los Angeles City Council advanced $3.688 million to the original developer of the site, Gerdling Edlen, for the purchase of the park site.
After CIM Group obtained the property, the redevelopment agency determined that its financial obligations regarding the public’s ownership of the land had been met, Zide said. However, CIM Group is now requesting an additional $1.25 million from the city for an easement to the park.
“It’s sort of like adding insult to injury, particularly when they’ve already been compensated and want more money,” Zide said.
He said the developer’s history with the project has been “somewhat dubious.” CIM Group had made an agreement to preserve the façade at the site, which once housed an Old Spaghetti Factory. However, after the agreement was amended, the façade was torn down.
Zide said the project also received the most entitlements — 17 — in the city of Los Angeles’ history. Furthermore, CIM Group has already received $7 million in public subsidies for the project, he said.
“CIM is a multibillion-dollar entity that has frequently leveraged millions in public subsidies for private developments. …They seem to have no shame about it,” Zide added.
City planner Blake Lamb said the Los Angeles Department of City Planning in 2008 issued a determination letter, which stated that the applicant — then Gerdling Edlen — would build a 21,177 square foot park that is open and accessible to the public. A project condition stated that the developer could choose to pay Quimby fees, build a park or do a mixture of both, she said.
Lamb said the value of the park space must be greater than or equal to the Quimby fees, which fees paid by developers for certain kinds of residential projects. Developers can dedicate parkland or provide a payment instead of paying fees as a condition of approval.
“The intention has never been that the applicant provide a park and pay the Quimby fees,” she added. “In other words, the city can’t double dip.”
After CIM Group purchased the property, there was some confusion about how the agreement would be implemented, Lamb said. CIM Group is required to meet the park condition before receiving the necessary permits, but it can’t construct the park without permitting, she said.
Therefore, the planning department, the recreation and parks department and the developer entered into an agreement that calls for CIM Group to pay its Quimby fees and construct the park, Lamb said. After the work is completed, the recreation and parks department would reimburse the developer by purchasing the easement, she said.
Lamb said the value of the park far exceeds the cost of the Quimby fees, but she couldn’t provide figures. Attempts to reach the recreation and parks department for information about the costs were unsuccessful by deadline.
Zide said there are a lot of people in the area who are upset with the project. He said it appears that CIM Group will enjoy a “substantial financial windfall” after cutting the cost of the project by $98 million, but it keeps seeking additional funding.
“We’re trying to respond to stakeholders’ concerns,” Zide said.
He said the developer has not been responsive to the neighborhood council’s concerns in the past — whether the issues stem from Sunset Gordon or another CIM Group project.
“Our interactions with them have always been one of us trying to get them to be responsible and them blowing us off,” Zide said.
He said the neighborhood council wants to see sites improved and jobs come to Hollywood, but large developers are often allowed to get away with acts that come at the expense of the taxpayers and city. Zide said the council strives to work with developers and other entities to ensure that projects are a good fit for the neighborhood.
“It’s not like we’re not trying to make an effort,” he added.
The Sunset Gordon project broke ground in the spring of 2012, and construction is expected to be completed this year. The project features a 23-story tower with 301 residences, 39,000 square feet of office space and 13,500 square feet of retail space, as well as the park.
CIM Group responded to Park Labrea News/Beverly Press’ inquiries, but could not provide a statement by deadline.
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