Sunset Strip Set for a Retail Makeover
The Sunset Strip in West Hollywood, Calif., is preparing to get a $60 million retail makeover that could breathe some new energy into the west end of the busy boulevard, which is currently populated by bustling nightclubs and restaurants.
Calabasas, Calif.–based developer Gold Mountain Enterprises and financial partner RSB Holdings has attained $14.8 million in financing to pursue a mixed-use project around the landmark House of Blues. The project includes about 35,000 to 44,000 square feet of retail boutiques in addition to 125 apartments and condominiums. The plan could also expand the concert venue, which anchors most of the entertainment properties in the area.
The developer plans to break ground by next spring and open the property in 2006. Some say retail traffic could eventually support the development. But others think retail has already over-saturated the area and parking is too much of a problem to warrant new construction.
“Right now, there doesn’t seem to be enough business to go around,” said Adam Shaffer, owner of Undercover Fashions, which has a store in the Sunset Millennium center, a few blocks from the House of Blues. “This is a destination shopping location, and the amount of destination shoppers isn’t there right now. This project would just bite into the piece of the pie, and there are only so many slices available.”
David Danielli of the Davido clothing boutique on Sunset, agreed. “There are no more tourists. It’s just very bad now,” he said.
Still, the west end of Sunset toward the House of Blues is mostly devoid of retail properties. Sunset Plaza a few blocks away has high-end boutiques such as Anna Sui, Nicole Miller and Armani A/X that are doing fairly well, said one tenant. But recent developments, including nearby Hollywood & Highland, have also bitten into the retail pie.
Still, developers of the House of Blues project hope to create a landmark destination that already has built-in traffic from the clubs and restaurants, as well as from tourists. “We’re looking at boutique-type stores with clothing and shoes and other goods. It’s big news,” said Gold Mountain principal Rene Bernasconi.
Bernasconi said the site plan calls for a Mediterranean motif with an Italian courtyard. A vital part of the plan is a 700-space underground parking garage, aimed at relieving one of the most congested sections of Sunset. The centerpiece of the development, the House of Blues, is being considered for expansion, which would bring bigger acts into the 30,000-square-foot club founded in 1994 by actor Dan Aykroyd and nightclub developer Isaac Tigrett. RSB and Gold Mountain purchased the two-acre site a few years ago. Film star John Barrymore once owned the property.
To finance construction, Gold Mountain obtained a $14.8 million bridge loan from Los Angeles–based GSP/Rifkind Capital Advisors. Gold Mountain, RSB and another partner bought the Blues property along with a Ventura Boulevard parcel in Encino a few years ago in as-is condition. They gained approvals to develop the Encino property into 125 luxury apartments and 17,000 square feet of retail space and then bought out the silent partner. The plan is to sell the Encino project and use the funds to concentrate on the House of Blues project, according to GSP/Rifkind.
Gold Mountain still needs to obtain siteplan approvals for the project from the city of West Hollywood.
