August 11, 2010 --After backing down from a contentious proposal to demolish the Hyatt Regency Century Plaza hotel, the owner has unveiled plans to construct a high-rise real estate development next to the Space Age landmark that would transform the tenor of Century City's streets and dramatically alter the skyline.

The $1.5-billion proposal calls for two 46-story skyscrapers holding hundreds of condominiums and offices to be built behind the renowned hotel on Avenue of the Stars. Nearly half of the guest rooms would be replaced by luxury condos as part of a top-to-bottom makeover.

A large portion of the lobby would be hollowed out and left open in a move to connect the new buildings, shops and plazas with nearby streets and improve the flow of pedestrians. Planning and construction are slated for completion by 2014.

The proposal represents a turnabout by Los Angeles developer Michael Rosenfeld, who has earned support from preservationists who once opposed him. Rosenfeld has also won a tentative nod from the mayor and a key city councilman for his revised plans.

His decision not to demolish the hotel is a major victory for Los Angeles preservationists, who have only lately begun to go to bat for buildings from the 1960s. The Century Plaza, completed in 1966, represents the can-do attitude of California in that era, said Los Angeles Conservancy President Linda Dishman.

The centerpiece of a commercial and residential development on the former Fox Studios back lot, the arc-shaped hotel is architecturally and culturally significant, Dishman said. Designed by the architect of the World Trade Center in New York, it has hosted astronauts, presidents and movie stars along with millions of ordinary Angelenos.

"Most everybody has been to a wedding, prom, bar mitzvah or fundraiser there," Dishman said. At the Los Angeles Conservancy, "we are thrilled," she said. Dishman said she was not opposed to the addition.

"Preservationists are often labeled that we are anti-change or anti-growth. I don't think that's true," she said. "Our focus is how to save historic buildings."

If approved by city officials, the addition would be one of the largest real estate developments on the Westside in decades, though it's likely to face resistance from nearby residents weary of traffic congestion and construction in their neighborhoods.

Demand for condominiums and offices plummeted during the recession and has yet to recover. But Rosenfeld said the market was likely to be on the upswing by the time the project is completed.

"We think the timing is ideal for resurgence into the next economic cycle," he said.

Rosenfeld, a native Angeleno, bought the Century Plaza for $366.5 million in mid-2008. Later that year he announced his intention to raze it and build two sleek 50-story hotel, office and condo towers in its place. At the time, Rosenfeld said that the Century Plaza had seen better days and that the new design would improve Century City's public spaces by adding a shop-lined plaza and more walkways.

Backlash from supporters of the hotel was swift and intense. Among those calling to save it were actress Diane Keaton and the Los Angeles Conservancy, the city's most influential preservation group.

Designed by prominent American architect Minoru Yamasaki, the Century Plaza was intended to be the centerpiece of Century City. The National Trust for Historic Preservation named the structure to its annual list of America's 11 most endangered historic places in 2009.

"To see the Century Plaza demolished on my watch ... would have been tragic," said Los Angeles City Councilman Paul Koretz, who grew up near Century City and recalls observing the hotel's construction in the 1960s.

From the time he took office in July 2009, Koretz said, he put Rosenfeld on notice that demolition of the hotel "would happen over my dead body and even then I hoped my heirs would fight it."

Then Rosenfeld made "a 180-degree turnaround and started working with us," Koretz said. Rosenfeld promised not only that he would not raze the structure but also that he would restore its metallic finishes to their original sheen. Century City was funded by aluminum manufacturer Alcoa, and aluminum was featured prominently on the hotel's exterior.

"I am absolutely tickled pink with that," Koretz said. Still, the councilman stopped short of an outright endorsement, saying he would not take a position until the community weighed in.

Mayor Antonio R. Villaraigosa said he favored the development and the new jobs it could deliver to Los Angeles.

"This construction project is both an immediate and long-term investment in the future of our city," he said. "The Century Plaza hotel project will preserve the character of an iconic destination while creating a new and improved mixed-use development in the heart of the Westside."

But residents have frequently complained that the city's infrastructure can't handle the additional traffic new development brings. The leader of a homeowners group indicated that residents would challenge any redevelopment that led to thousands of additional car trips, as this project most likely would.

"More development is not what West L.A. needs right now," said Mike Eveloff, president of Tract 7260, a homeowners group at Century City's western border.

Eveloff said he was troubled by what he said appeared to be an agreement by the conservancy not to oppose development of the site as long as Rosenfeld agreed to preserve the hotel. In addition to traffic, Eveloff said residents were concerned about the potential loss of privacy posed by two 46-story towers hovering over the neighborhood.

Koretz, however, said he found much to like in the design.

"From what I've seen, it's a lot more pedestrian-friendly and a lot less like a fortress that's difficult to negotiate, like it is now," he said. "In a way, the Century Plaza is the heart of Century City, and in a way now it blocks the heart of Century City. This project has tremendous potential to make Century City much more walkable. That will be great for residents."

Koretz also likes the prospect of thousands of jobs that would come with development. "I'm hoping this winds up being a win-win for absolutely everybody," he said.

As envisioned by architect Henry N. Cobb of Pei Cobb Freed & Partners, the towers would have convex shapes to complement the concave form of the hotel. In front would be a new public plaza with outdoor cafes. In back would be a larger public plaza with shops and restaurants. A station for a planned subway stop would be included at the corner of Avenue of the Stars and Constellation Boulevard.

Compared with other, more colorful skyscrapers in Century City, the look of the proposed towers is "quiet," Cobb said. "We are trying to strengthen the identity of Century Plaza and not diminish it."

Plans call for reducing the number of guest rooms in the hotel from 726 to 394. Inside the preserved building, 63 luxury condos would be created. The ballroom would be made smaller as part of the makeover but still would be the largest on the Westside.

The new towers would contain up to 290 condos, 100,000 square feet of offices and 94,000 square feet of restaurants and stores.

Rosenfeld is founder and chief executive of Woodridge Capital Partners, a real estate investment company with assets throughout the United States and Canada. In 2007, he sold the 24-story Carlyle on Wilshire Boulevard to Elad Group, owner of the Plaza Hotel in New York.

With New York hedge fund D.E. Shaw Group, Rosenfeld bought the Century Plaza hotel in May 2008. Rosenfeld is executive manager of Next Century Associates, the partnership he and D.E. Shaw Real Estate Investment Group formed to develop the site.

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