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Tuesday, Oct 3, 2023

Boutique Hotel Set For Studio City East

Boutique Hotel Set For Studio City East By SHELLY GARCIA Senior Reporter Is there room for an (upscale) inn in Studio City? A local real estate group is proposing to build a boutique hotel along the lines of Ian Schrager’s Mondrian Hotel in West Hollywood on a site that currently houses an office building on Ventura Boulevard just east of Tujunga Avenue. The hotel would be the first of its kind on the San Fernando Valley floor, although another similar property, The Graciela Hotel Burbank was opened about one-and one-half years ago by Robert Zarnegin, who also developed the Peninsula Hotel. Boutique hotels have become increasingly popular in recent years, particularly among the arts and entertainment crowd seeking an alternative to the homogenous chains that dominate the hospitality landscape. “The Graciela is booked for months in advance,” said Jim Markel, a partner with DT Ventures which is proposing the Studio City hotel. “The demand is much greater than the 100 rooms.” So-called boutique hotels are typically smaller properties of about 100 rooms. Their appeal is based on their size and an individualistic character, marked by very sophisticated design and d & #233;cor. What makes Studio City so appealing as a site for one of these hotels is the proximity of a number of entertainment studios and related businesses as well as what the developers perceive as a demand for a hotel to service the visiting friends and relatives of local residents, many of whom also work in the entertainment industry. “It was really an intuition on our part from being local residents that we need an upscale boutique hotel to service family and friends, to service the industry that’s here,” said Markel. “If you’re an executive that works for Disney and you have a week’s worth of meetings in Burbank and you’re dog tired after the workday, you have to travel in traffic through the canyons to get to those (types of) hotels. So your day becomes an 18-hour day. For us it wasn’t a matter of will it succeed, but how to do it.” DT Ventures, a small development and investment company, has been working on the redevelopment of the former Adolf’s meat tenderizer factory in North Hollywood, a property it is converting into working and living lofts. The company’s principals had been toying with the idea of developing a hotel property in the Valley when an office building at 11331 Ventura Blvd. came on the market. Underutilized land The company conducted a feasibility study and talked with other operators, including The Graciela before making the decision to buy the property. Escrow is due to close in the next few months, the principals said. “It’s currently got 20,000 square feet of improvement on 33,000 square feet of land,” Markel said, referring to the building the company would demolish to make room for the hotel. “So it’s not very well utilized. The office space right now is about 20 percent vacant, so you’re replacing it with a product that’s much more in demand.” DT Ventures has only begun to plan the hotel, which company officials say would contain 100 to 150 rooms, and the group has begun meeting with the community, although the vice president of the Studio City Residents Association, Polly Ward, was not familiar with the plan. “As long as it’s not over 45 feet high and they can provide the parking required, as long as they can meet the Ventura Boulevard Specific Plan they won’t have a problem,” she said. Entertainment and other creative types comprise a large portion of the market for business travelers, which has begun to rebound since a significant fallout in 2001, said Bruce Baltin, senior vice president at PKF Consulting, a research company that specializes in the hospitality industry. “I don’t know the exact numbers, but certainly the Kimpton properties draw heavily from the commercial market segment,” said Baltin, referring to the operators of a chain of four-star boutique hotels including the Sky Hotel in Aspen and the Prescott Hotel in San Francisco. Hotel occupancy rates have remained soft since the Sept. 11 terrorist attacks, but business travel in particular has been improving, Baltin said. “2000 was the end of a nine-year run-up of demand,” he said. “And probably the market was somewhat overheated, so I’m not sure we’re looking to come back to that level. But by the same token we know we’re in an up-cycle in this economy and it hasn’t reached its peak yet we’re only in the first year.” DT Ventures also has a way to go before the first shovelful of dirt is scooped out of the property, especially when it comes to working with the local area residents, which Markel described as a “very powerful group.” But the partners, who also include President and CEO Daniel Markel (Jim’s brother), Dave de Csepel, CFO, and Tom Gallop, COO, believe they have a strong argument to bring to the homeowners. The hotel would replace a nondescript office building on a block that’s otherwise rundown. And the partners believe it could spur further development in the area, which has been neglected as the portion of Studio City that lies West of Laurel Canyon has developed into a tony shopping area. “It’s something residents and businesses can call their own, and one by one (attract other businesses and redevelopment to ) take away the blight that is there,” said Markel. “This will be a great cornerstone for that.”

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