Experts: Odds favor Caruso

Eminent domain attorney says, 'The powers of redevelopment are pretty encompassing.'

February 11, 2011|By Bill Kisliuk,

Just days before a clash between private-property rights and Glendale’s redevelopment power is expected to come to a head over whether to back plans to shutter the Golden Key Hotel on Colorado Street and make it part of the Americana at Brand shopping center, experts say there may not be much of a fight.

Golden Key owner Ray Patel has battled the plan at every step, rejecting Americana at Brand developer Rick Caruso’s $6-million buyout offer and unveiling his own plan to revamp his hotel.

As city leaders prepare for a Tuesday hearing on the dueling proposals, the threat of eminent domain looms over Patel’s inn. The property is in a redevelopment zone the city established nearly 40 years ago.


If in the coming weeks the city decides to go to court to take Patel’s land and turn it over to Caruso, as it did with nearby properties seven years ago, experts say Patel has long odds of successfully challenging the move.

On Friday, city officials recommended Caruso’s expansion plan in a report to the Redevelopment Agency, noting that a larger Americana stands the best chance of improving the downtown area and expanding the city’s retail base.

“It is extremely hard to overcome this if it is already in a redevelopment area,” said Nowland Hong, a land-use attorney who has worked for Los Angeles County. “The powers of redevelopment are pretty encompassing.”

Caruso is proposing to invest up to $50 million to build 135,000 square feet of new retail space on two properties — Patel’s 55-room hotel site and an adjacent vacant building Caruso acquired last month. Caruso would also widen Colorado Street and create a landscaped pedestrian entry at the western edge of what is now a 15.5-acre mixed-use shopping and residential center.

Caruso, who built the Grove in West Los Angeles and several other regional shopping centers, said his plan will generate an estimated $800,000 a year in new sales tax receipts for Glendale. The city estimates it will generate closer to $700,000.

Caruso spokesman Matt Middlebrook said the plan is consistent with the Glendale Redevelopment Agency’s longstanding goals of increasing pedestrian activity, generating new revenues and giving the city’s central core a face lift.

He pointed to the more than $3 million in sales tax revenue generated by the Americana since it opened in 2008, becoming a gathering place and economic linchpin of the city.

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