Green Light for Herald Examiner
Los Angeles Downtown News -- October 29, 2007
A Rival's Appeal Is Rejected
by Anna Scott
The City Council's Planning, Land Use and Management Committee last week approved an expansive mixed-use development proposed for Downtown's historic Herald Examiner building. The long-delayed project is expected to come before the full council for final approval in November.
Property owner Hearst Corp. last week received approvals from a Council Committee to pursue a large project on the site of the Herald Examiner building at 1111 S. Broadway. Photo by Gary Leonard.
The project at 1111 S. Broadway by property owner Hearst Corp. has been stalled for more than a year, following legal challenges from USC area housing developer Conquest Student Housing; Conquest has contested numerous projects by Hearst's former partner on the effort, Urban Partners.
In approving the project, the PLUM committee rejected two separate appeals filed by Conquest.
"We are pleased with the outcome, and it's what we expected," said Marty Cepkauskas, director of real estate for Hearst Corp. "We're committed to seeing this project through."
Downtown Los Angeles-based Urban Partners dropped out of the deal in May. A federal lawsuit filed by Urban Partners and USC in September alleges that Conquest deliberately stalled the Herald Examiner project - along with several other Urban Partners developments - with frivolous challenges to dissuade the developer from pursuing a proposed student housing development in the USC area.
That project, the $135 million University Gateway, is expected to break ground in summer 2008.
According to the lawsuit, the Hearst Corp. cut ties with Urban Partners on the Herald Examiner project because of Conquest's interference.
Now that Conquest's appeal has been rejected, said Urban Partners principal Matthew Burton, "We would love to get back involved," but added that re-partnering would be Hearst Corp.'s decision.
"We have not had any discussions since we were removed from the project," said Burton. "But we think it's a great project. I'm thrilled that PLUM turned down the appeal."
Cepkauskas declined to comment on the possibility of rejoining with Urban Partners.
Bumpy Road
The former home of William Randolph Hearst's Herald Examiner newspaper, at 11th Street and Broadway, has been vacant since 1989. Plans to redevelop the site, said Cepkauskas, have been on the burner for at least five years.
The project planned for the site would include 40,000 square feet of office space, 20,000 square feet of retail and a 10,000-square-foot health club in the lot's historic, Julia Morgan-designed Broadway building. Architect Brenda Levin would oversee that aspect of the project.
The development would also create a 24-story, 268-unit residential tower on the former press building site on Hill Street, which has been razed, and a 37-story, 319-unit high-rise at 120 W. 12th St. The new structures would be designed by Thom Mayne of Morphosis.
Earlier this year, Conquest appealed zoning changes and other approvals granted to the developer by the city's Planning Department.
According to Urban Partners' September lawsuit, Conquest attorney Greg Yaris told a Hearst Corp. representative that the opposition was aimed at stopping University Gateway. In early 2007, the suit alleges, Yaris told Hearst Corp. that Conquest would drop its appeals for $1 million.
"As a result of the Conquest Defendants' extortion and opposition to the project, Hearst terminated its relationship with Urban on that project," reads the 60-page complaint, in part.
After Hearst Corp. and Urban Partners parted ways, Conquest continued with its appeals. The city Planning Commission unanimously rejected the challenges in May.
During the PLUM committee meeting last Tuesday, Ninth District Councilwoman Jan Perry rebuked Conquest for what she characterized as an attempt to quell competition in the USC student housing market.
"I have some direct experience with the activities of Mr. Smolinisky's company," said Perry, referring to Conquest principal Alan Smolinisky, "in attempting to derail projects" near USC.
"He engaged in behavior which some might argue is at least harassment, possibly more than that, against Urban Partners," she said.
Conquest representatives did not attend last week's hearing. Phone calls to Conquest attorneys John Henning and Greg Yaris, and to Conquest principals Smolinisky and Brian Chen were not returned.
Veronica Perez of the Central City Association hailed the Herald Examiner project as one that "will mark a new era for the South Park area and benefit the entire Downtown region.
"It is truly unfortunate that such a landmark project for Downtown, which has substantial community support, has met significant procedural delays due to a merit-less appeal," she added.
PLUM committee members seemed somewhat baffled by the appeals.
"I can't think of a case with an appellant," said PLUM committee member Jack Weiss, "that totally lacked standing."
He went on to ask Perry, "Have you seen anything like this in your career?"
Conquest is expected to file a written response to the September lawsuit with the U.S. District Court on Nov. 7. A preliminary hearing is set for Dec. 10, according to Urban Partners attorney Karl Tilleman, and the case is expected to go to trial late next year.
Contact Anna Scott at anna@downtownnews.com.
