It's the 54-story hotel and condo tower that's the centerpiece of the L.A. Live complex, right next to Staples Center. AEG, the sports and entertainment development arm of the Phil Anschutz empire, has bought out KB's stake in the project and will develop the tower on its own. KB said it was bailing in order to focus on its core homebuilding business, which remains in pretty bad shape. The company is also dealing with a stock options scandal that forced out longtime CEO Bruce Karatz.
Actually, Karatz was the one who pushed the L.A. Live venture, even though it veered from KB's main business. "We think this is going to be one of the landmark buildings in all of Southern California," Karatz said at a press conference earlier this year announcing the partnership. The L.A. Live hotel is otherwise known as the Convention Center hotel, which pols and business types have been trying to get built for many years. Their assumption was that L.A. would never become a major convention town without a major hotel right next door. Not everybody went along with that thinking, but AEG and its CEO, Tim Lieweke, convinced enough folks at City Hall to push through the hotel plan.
Apollo Real Estate Advisors was AEG's original partner for the hotel, but the two sides couldn't agree on the economics and Apollo pulled out around a year ago. That set the stage for KB. "I hope this will be the last press conference we ever have to do," Lieweke said in announcing the KB partnership. "No more speculation, no more false starts, no more people saying it's not going to happen." Well, it's going to happen, but it'll be on AEG's dime. Meantime, the cost of the project keeps rising. The LAT has it at $750 million, up from the $600 million pricetag that the DN reported earlier this year. Construction is well underway and they're talking about finishing it up in 2010.