Council Pans Kimpton Hotel Project, Reboots YWCA Building Planning

Council will develop Civic Center Task Force

Published : Tuesday, May 23, 2017 | 5:32 AM

With Councilmember Steve Madison saying that developing the Kimpton Hotel/YWCA project “has been a monumental failure” and Councilmember Gordo pointedly adding, “We have been missing a robust public discussion, and not [been] thinking about the Civic Center as a whole,” the City Council Monday evening approved a staff recommendation to send the issue back to the Council’s Economic Development and Technology Committee to create a Civic Center Implementation Task Force, which will  “frame the discussion” regarding the historic building.

The decision essentially closes the door on the previously proposed plans to develop a new luxury boutique hotel in the Civic Center, as proposed by developers KHP III.

The proposed six-story hotel, which would have been directly across Centennial plaza across from city hall, drew the ire of many preservationists and downtown Pasadena activists.

KHP III developers planned to rehabilitate the existing City-owned, 40,570-square-foot historic YWCA building designed by legendary architect Julia Morgan, and construct a new six-story, 87,342-square foot new building, both of which would become an approximate 127,912-square-foot, 181-room Kimpton Hotel with restaurant and banquet facilities.

The hotel property would have totaled 1. 93 acres, on a site bounded by Garfield Avenue on the east, Union Street on the south, Marengo Avenue on the west and Holly Street on the north.

The total project cost to the developer was estimated to be approximately $81.7 million, including approximately $14-$16 million to rehabilitate the city-owned historic YWCA Building, along with the construction and operation of a new building.

But by 2016, according to a City staff report, KHP continued to scale down the proposed ground rental payments as as hotel project costs increased, first to a flat $300,000 annual payment for the first 10 years, and then $377,000 per year with adjustments every ten years based on changes in the consumer price index.

KHP then agreed to comply with the State’s Prevailing Wage law, which, it said, added $8.9 million to construction costs.

By April of this year, a request by the developers for 50 years of free rent and 136 parking spaces owned by the City, amounted to a $7 million subsidy for KHP, while the 136 parking spaces represented another $3.7 million. A projection from the City staff report also reported that the City would receive $44 million over the first 20 years. The City would also share in room revenue, and 20 percent of the hotels’ income proceeds after a 14% internal share to KHP.

At that point, the Council decided enough was enough.

On April 3, the Council hit the pause button on the project, with City Staff returning last night with three options for the Council—to go ahead with the new hotel project as agreed with subsidies included, to build a smaller hotel project, or essentially re-open the discussion with a new perspective, which is what the Council approved.

Although KHP partner Joe Long told the Council Monday evening, “We are still committed to this project,” KHP attorney Richard McDonald, who also said the developers would be open to a scaled-down project, said, “If this is not approved, we will not be back.”

Gordo responded, “This is is driven by money and the needs of a developer,” telling the Council that “The colossal danger would be to go along with that. The hotel project doesn’t take into account the importance of the Civic Center. We get maybe one opportunity every 30 or 40 years to improve the Civic Center, and now here we are again. To go along (with the Kimpton project) would be a failure by the Council. First and foremost, we need to preserve the building and then, enhance the Civic Center. Somewhere, we lost our way.”

Pasadena resident Avram Gold set the tone for the evening’s discussion, at least for the nearly two dozen residents who commented, saying, “What is paramount here? Revenue? Or is it restoring balance to our civic center?”

Sue Mossman, executive director of Pasadena Heritage, told the Council that her group would support a smaller Kimpton hotel project, with the goal of restoring the historic building.

“Let’s look at the whole thing, and focus on the Bennett Plan (the original 1923 plan for the Civic Center),” said Councilmember Margaret McAustin. “Let’s explore the range of uses.” McAustin also mentioned a suggestion that had the senior center moved into the YWCA building and the senior center land used to increase the size of Memorial Square Park.

“Clearly, there is no consensus on how to move forward with this project,” said Mayor Tornek, near the end of the discussion.

“When we took this building back (in 2011) we gave instructions to our staff,” Tornek continued, “How do we save the building, and we want our money back. We should not keep throwing money at this,” he explained. “We don’t have unlimited resources.

Tornek also said, however, that he was “very leery of an open-ended process” in deciding the fate of the property, saying that “The EdTech committee needs to frame this better.”

“This has been a deeply flawed analysis,” said preservationist Marsha Rood, former Development Administrator with the City, who asked the council to reject the project. Following the decision, Rood said she feels “vindicated,” and is looking forward to a discussion involving the citizens of the city as well as the Council.

The creation of a new Civic Center Implementation Task Force and the formulation of a new direction for the property is expected to take six months.

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