When 2000 Avenue of the Stars was built on the former site of the ABC Entertainment Center, the 12-story office tower's design included an opening that offers a straight view from between the Century Plaza Towers to the center of the curve of the Century Plaza Hotel.

 

That reference point was to be demolished until Next Century Associates, the newest owners of the 1960s-era hotel, reached an agreement in mid-February with the Los Angeles Conservancy and National Trust for Historic Preservation to abandon plans to raze the site.

 

A joint venture of Next Century and New York City-based D.E. Shaw Group bought the Century Plaza in July 2008 for $366.5 million.

 

Later that year, the developer unveiled a $2 billion plan to raze the hotel and replace it with 1.4 million square feet of new development in two towers. The plan called for a 240-room hotel, 163 hotel residences, 130 luxury condominiums, 100,000 square feet of office space, 106,000 square feet of retail shops and restaurants as well as a spa and fitness center.

 

Preservation groups immediately came out in opposition to the plan.

 

In 2009, the National Trust listed the hotel, built in 1966 as the centerpiece of Century City, as one of America's 11 Most Endangered Historic Places. Minoru Yamasaki, the architect who designed the hotel, which has been a gathering place for celebrities, politicians and world dignitaries, also designed New York's now-destroyed World Trade Center towers.

 

"It is one of the Modernist icons in the city and the nation," said Linda Dishman, executive director of the Los Angeles Conservancy. "We are very pleased to have reached an agreement on a plan that preserves the Century Plaza Hotel as a vital asset and cultural touchstone for Los Angeles. Preservation is about managing change, not preventing it."

 

Los Angeles City Councilman Paul Koretz, who took office in July 2009 and ran partially on a promise to prevent the hotel from being demolished, convinced the preservation groups and officials at Next Century Associates to come up with a proposal that would preserve the hotel while allowing for new development on the property.

 

"Next Century's willingness to embrace a plan that preserves the hotel is a great step forward," Koretz said. "The process serves as a model of how a developer can work together with the preservation community to bring forward a solution that preserves an important structure, allows future development on the property and better serves the goals of the community."

 

The modified plan is focused on the interior of the project and would involve reducing the number of hotel rooms from 726 to 400 and using the additional space from the 326-room reduction to construct 45 condominiums. Other new buildings are proposed for the rear and sides of the hotel, with a one-story building and retail shops or restaurants planned for the front of the hotel.

 

The new plan has left some observers questioning how the developer will pull it off, considering that redevelopment of an existing project often can be more expensive than scraping a site and building anew.

 

Next Century paid $504,000 a room, or $164 million for the 326 rooms it will be replacing with 45 condominiums. The condominiums would have to sell for $5 million or $6 million each to be profitable, according to Alan Reay, president and founder of Atlas Hospitality Group.

 

"I don't see how the economies are going to work," he said, while acknowledging that his estimates don't take into account income from other proposed uses on the site.

 

Valuations are down 40 percent on hotels that serve luxury and business travelers. Since Next Century put $214 million of debt on the property, the property is probably worth less than the debt at today's prices, Reay said.

 

"I would be negotiating with my lender and figuring out how to survive the downturn," he said. "Hopefully, their banks will work with them and give them favorable terms."

 

Michael Rosenfeld, executive manager of Next Century Associates, did not return calls for comment but said in a statement that the preservation of the hotel could be achieved only if sufficient additional development was permitted on the site. He called the agreement "encouraging."

 

Despite the developer's willingness to work with historic preservation groups to preserve the building, it will not be receiving increased density allowances on the site. Any new development will have to be consistent with the Century City North Specific Plan, said Christopher Koontz, lead planning deputy in Koretz' office.

 

"It's a historic building, you can't tear it down. So you don't get a bonus for not tearing it down," Koontz said.

 

The project will have to undergo the normal city review and approval process, including a full environmental-impact report, which is expected to be submitted later this year. It also will be reviewed by the Cultural Heritage Commission for eligibility as a Historic-Cultural Monument.

 

The focus of the preservation efforts was to the exterior of the property. For example, the developer agreed to restore the hotel's aluminum exterior. The metal only has a lifespan of 40 years, which it has exceeded, Dishman said.

 

Preservation of the aluminum features on the concrete building was deemed historically significant, because Alcoa Inc. helped fund the early development of Century City. All of the early buildings in Century City have aluminum features, and the buildings were considered a showcase for the Pittsburgh-based aluminum company's product, she said.

 

As a result, most of the changes would occur in the interior of the hotel, much of which has been altered over the years, include a year prior to the sale when the previous owner did a major renovation.

 

"In the hotel's lobby space, only three ceiling indentations remained that were part of the original hotel," Dishman said. "Everything else in the hotel had been changed. The ballroom, a significant part of the social fabric of the Westside, had been altered so much through the years that it had not maintained its architectural integrity."

 

The ballroom will be demolished and replaced with a smaller one as part of the renovations, Dishman said.

 

In what Koontz considered a significant compromise, Next Century will be allowed to fill in the sunken plaza and construct a one-story building in order to make the property more pedestrian-friendly.

 

"We felt like the sunken plaza could be lost and the hotel could still retain its eligibility to be designated a cultural monument," Dishman said. "We were able to preserve 90 percent of the features identified by the office of historic resources as historic."