OPTIONS

The Metro could choose not to enter into an ENA with Legacy Partners and choose to work with one of the other development teams.  Although all the proposals meet some of the basic development requirements included in the RFP, the evaluation panel found that the Legacy Partners team demonstrated the highest overall benefits to the Metro, the most feasible development, and assembled a strong development team.  The evaluation panel unanimously recommended the Legacy Partners proposal. 

The Metro could choose not to enter into an ENA with any of the development teams, and not proceed with any project at this time.  Under this option, under the revised Joint Development Policies and Procedures, staff would proceed to develop urban design guidelines and inform the development community of the availability of the site for development.

FINANCIAL IMPACT

The recommended action will not impact the Metro’s FY02 budget.  Ultimately, development of the Metro-owned properties will result in revenues to the Metro. 

BACKGROUND

The Metro and the Community Redevelopment Agency of the City of Los Angeles (CRA) issued a Request for Proposals (RFP) for the development of a 2.8-acre parcel of land around the Hollywood and Vine Metro Red Line Station area as well as additional property controlled by proposers within an eight-block area roughly bounded by Ivar Avenue, Yucca Street, Gower Street, and Selma Avenue.  This area, referred to as the Hollywood and Vine District, is within the Hollywood Redevelopment Project Area, adopted by the Los Angeles City Council in 1986. An RFP for the development of the area was issued in May 2001 to a list including over 300 developers, contractors, architects and real estate firms.  The RFP called for a development proposal that would: 

• Enhance and increase ridership on the Metro System

• Provide transportation-related services and conveniences

• Enhance the connection between rail passengers to bus and other transportation services

• Be pedestrian oriented

• Achieve transit, land-use, economic development and urban planning goals while maximizing revenues generated to Metro from its property by providing, at a minimum, a financial return equal to the current and future fair market value of that property

• Include a mix of land uses that will continue the revitalization of downtown Hollywood and promote its long term economic health

• Re-establish the identity of the Hollywood & Vine District as a premier business center for the entertainment industry

• Achieve the highest levels of quality in terms of urban and architectural design, including the preservation or adaptive use of important historic and cultural resources

• Promote development that conforms with the Hollywood Redevelopment Plan and the Hollywood Boulevard District Urban Design Plan

• Generate economic development benefits such as job opportunities and fiscal revenues to the local area and the City of Los Angeles

• Respond to the social context of the local community by providing facilities and infrastructure that will attract a broad spectrum of tenants and users   

Metro received six proposals, all complying with the minimum requirements of the RFP.  Proposals were submitted on October 5; Clarification and additional information was requested and received on December 3; Interviews for the four strongest proposals were conducted on January 8, 2002.  Attachment B lists the four proposals for which the Evaluation Committee conducted interviews.  This matrix compares the proposed development mix of the four proposals.

A panel of six, including three Metro staff and three CRA staff, evaluated the proposals based on the criteria contained in the RFP and interviewed the principals.  In addition, Metro’s joint development consultant, Sedway Group, and CRA’s consultant, Wald Realty Advisors, as well as Metro operations and Metro Art staff reviewed the proposed development concepts and submitted their comments to the evaluation panel. 

The proposals were evaluated on four major criteria:  1) Responsiveness of Master Planning and development concept, 2) Financial feasibility and preliminary ground lease offer to Metro, 3) Development team qualifications and financial capacity, and 4) Site control, project preparedness, and schedule. 

Legacy Partners proposed development and disposition terms presented the most feasible and sustainable development, the highest overall benefits, and the lowest risk to the Metro.  The total value of the development is estimated to be $282 million dollars. 

Legacy Partners, who is partnering with Gateway Capital, proposes to build a mixed-use, transit-oriented development that would include, approximately 300 hotel rooms (232,500 sq. ft.),  200 apartments, 46 condominiums, and 30,000 square feet of ground level retail space.  Additionally, Legacy Partners proposes to develop 732 parking spaces for the development on two levels below grade level. (See proposed elevations and site plans in Attachment C.) 

Transit operations and pedestrian linkages are incorporated into the proposed project.  The project is designed to accommodate and facilitate both pedestrian and vehicular movements to and from the site.  The Metro portal at Hollywood Boulevard will be enhanced to include a pedestrian plaza with fountains at the corner of Hollywood and Argyle.  The transit plaza will connect Argyle Avenue, the hotel, and apartments.  The transit plaza will accommodate seven Metro buses in dedicated loading berths as well as shuttles and “kiss and ride” commuters.  The buildings are designed to reinforce street edges and enliven the pedestrian realm.  Retail facades on both Hollywood and Vine will be continuous.  Interior loading docks will be standard to all buildings. 

Figuring prominently for CRA staff were Legacy Partners’ strength in land use and job creation, design team and concept, development experience, and high public revenue generation.  Legacy’s design concept is consistent with the CRA’s Hollywood Boulevard District Urban Design Plan and creates strong street walls along both Hollywood Boulevard and Vine Street.  Legacy Partners has substantial development experience nationwide, has assembled an excellent track record in public-private development partnerships, and is well capitalized.  The anticipated public revenues to be generated by the development proposed by Legacy Partners are substantially greater than those that would be generated in the initial phase of any of the competing proposals.

Comparison of Proposals Relative to Revised Joint Development Policy

Metro staff re-examined the Legacy proposal as well as all qualified proposals in light of the revised Joint Development Policies and Procedures.  The recently adopted Joint Development Policies and Procedures added emphasis on the overall quality of the development concept and its potential ability in enhancing transit and community needs as well as on developer qualifications.   As mentioned previously, the development proposal was very strong in its ability to meet the land use and redevelopment goals of the CRA.  The development team was very experienced.  The proposal enhances the transit system by creating a lively mix of evening and daytime activities around the portal, by including a transit plaza, pedestrian linkages, and providing both origins and destinations for transit patrons.  Based on these and other features,

Metro staff feels that the Legacy proposal best meets the goals of the recently revised Joint Development Policies and Procedures.

NEXT STEP (S)

After execution of an Exclusive Negotiation Agreement with Legacy Partners, Metro staff, with the assistance of its joint development consultant, will negotiate in good faith over a six-month period to establish definitive financial arrangements and a development schedule.  (Please see Attachment D, Draft Exclusive Negotiation Agreement.)  At the end of the negotiation period, staff anticipates a draft Development Agreement and Ground Lease for Board approval. 

ATTACHMENTS

A.                 Hollywood and Vine Vicinity

B.                 Attachment – Proposal Matrix

C.                 Proposed Elevations and Site Plans

D.                 Draft Exclusive Negotiations Agreement

Prepared by:     Fiona F. Schneider, Transportation Planning Manager

                        Transportation Development and Implementation

_______________________________

James L. de la Loza

Executive Officer

Countywide Planning and Development

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Roger Snoble

Chief Executive Officer