On a recent visit to Beijing, Beverly Hills Mayor John Mirisch stopped in at the headquarters of the Dalian Wanda Group. Wanda is China’s largest property developer, with $139 billion in assets including hotels, shopping malls, sports teams, and movie theaters. The company is expanding its entertainment horizons — gobbling up U.S. cinema chains and buying Legendary Entertainment earlier this year — while developing luxury properties around the world. Now it’s looking to plant its flag in Southern California with a major hotel and condo project in Beverly Hills.
Naturally, Mirisch wanted to drop by for a face-to-face meeting.
“You want to let major investors know they’re welcome in your city,” Mirisch says. “I’d love for Wanda to consider Beverly Hills to be their Hollywood headquarters.”
But nothing is ever quite that easy in Beverly Hills. Wanda’s proposal — which is due to go before the Planning Commission Tuesday night — has kicked up a dust storm of controversy in the tony city of 34,000, including objections from the Beverly Hilton, which is across the street from the Wanda site.
“They are archenemies of Wanda because Wanda is a competitor,” says Lou Lipofsky, vice president of the Beverly Hills North Homeowners Assn. “And Wanda, of course, is an archenemy of the Hilton. The citizens are left with these two economic giants fighting with one another.”
Hospitality is big business in Beverly Hills, with rooms at five-star establishments starting at $600 a night. Wanda is investing $1.2 billion to construct two buildings — one 13 stories, the other 15 stories, with a combined 193 condominiums and 134 hotel rooms — on the site of a former Robinson’s May department store. The plan also calls for a restaurant, ballroom, spa, and rooftop bar.
The Hilton is owned by Beny Alagem, an Israeli entrepreneur who founded the Packard Bell computer company. Built by Conrad Hilton and once owned by Merv Griffin, the Beverly Hilton is a Hollywood institution: It hosts the Golden Globes and the Oscar nominees luncheon, and many celebrities have taken up residence there.
Alagem has raised objections to the Wanda project, enumerated in a 21-page letter to the City of Beverly Hills. One of his main concerns is that the complex will have a service entrance on Merv Griffin Way; this means garbage trucks and other heavy vehicles will be entering and exiting the Wanda project directly across from the entrance to the Beverly Hilton, where valets welcome celebrity guests. Alagem has also raised traffic concerns, going so far as to hire a consultant to analyze potential congestion.
Meanwhile, Alagem has controversial plans for the Hilton property — plans that are up for a citywide vote in November. He wants to build a 375-foot condominium tower on the southwest corner of the property, at Santa Monica and Merv Griffin Way. This would accompany the 12-story, 170-room Waldorf Astoria hotel the company is constructing on the easternmost corner of the property, expected to open next year.
|“Wanda, of course, is an archenemy of the Hilton. The citizens are left with these two economic giants fighting with one another.”|
|Lou Lipofsky, Beverly Hills North Homeowners Assn.|
Wanda is forming a committee in an attempt to defeat Alagem at the polls. And the group is not alone in opposing Alagem’s ballot initiative — Mirisch has been vocal in his opposition, saying the tower would be out of scale for Beverly Hills and would make the city look like nearby Century City, which has a cluster of high-rise buildings.
“In theory, you could have the domino effect,” Mirisch says. “The Peninsula, which is just across the street, could say, ‘Wait a second, we want to build 40 stories.’ And then there goes the neighborhood.”
Beverly Hills has a rich tradition of hotel wars. Plans for a proposed Four Seasons were defeated in a 1984 referendum. In 2005, the Peninsula put up $500,000 in an unsuccessful effort to defeat the Montage. Alagem’s earlier plans for the Beverly Hilton property narrowly survived a 2008 referendum.
The Hilton/Wanda battle is just getting started, but it has already seen intrigue. The city has received two letters opposing the Wanda project from attorneys who did not identify their clients. One letter, 87 pages long, expanded on traffic and other concerns that were raised in the Hilton missive.
“Our clients are composed of residents and businesses that are concerned about development in West L.A.,” says Jamie Hall, the attorney who wrote the letter.
In Beverly Hills, there is widespread suspicion that the Hilton was involved. Asked about those concerns, Hilton spokeswoman Marie Garvey said only, “I am not responding to rumors.”
The Wanda project is sure to face a bumpy road as it heads to the City Council next month. Councilwoman Nancy Krasne, a supporter of the Hilton project, intends to ask Mirisch to recuse himself from the Wanda vote, saying the mayor “is acting like a paid lobbyist” for Wanda.
“What they want is insane,” she says of Wanda. “We’ll have four hotels in a row if that goes in.”