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It's not much of a contest - billionaire developer Rick Caruso vs. hotel owner Ray Patel. Caruso wants to purchase Patel's property in order to expand his monster Americana at Brand complex - and since it's within Glendale's redevelopment area, city officials can force the sale through eminent domain. (A second building would also be sold as part of the plan.) Patel says he's being forced into selling, though Caruso's $6-million offer is supposedly 22 percent over market value (many of us would like to be forced into that sort of deal). These sorts of disputes are almost never as black-and-white as the respective parties claim, but in this case Caruso is clearly working with a stacked deck - namely the Glendale City Council. From the Weekly:
As Glendale civic leaders and real estate interests supporting Caruso make clear, the city wants them gone. "They're really quite underwhelming when you look at them," Tim Conroy, a Realtor, said at the meeting. "The dated hotel, in my opinion, certainly doesn't fit in with the ... Americana," agreed Realtor Leanne Reynolds. Former Glendale Mayor Larry Zarian declared, "Those two pieces of property do not belong in the Americana." Mayor Ari Najarian concurred: "I don't think we're losing much, with all due respect to Mr. Patel. ... If we have to forgo the use of a mid-, how do you put it, a midpriced motel. It just don't fit."
There's little doubt that as far as Glendale is concerned, the expansion plan makes the most economic sense. It means more revenue to the city and more jobs. But no matter what happens, Caruso comes off looking bad - just as he looked bad by effectively forcing out a Barnes & Noble store in Encino over a lease dispute.
*This is hardly the first case of Glendale looking bad. What about developer Advanced Development and Investment, which contributes heavily to council members, being awarded a $12.2 million contract to build low-income housing? From the LAT:
The firm faces allegations that it defrauded government agencies and may have built potentially unsafe housing for the poor. In recent years, ADI has repeatedly persuaded officials in Glendale, Los Angeles, Sacramento and elsewhere to hand over millions of dollars to complete its projects -- even after concerns were raised about cost or quality.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.