Foreclosure Filed Against Developer of Hollywood Condo Tower
In what appears to be another crushing setback for downtown Hollywood, a lender this week filed to foreclose on WSG, the developer of ArtsPark Village, a 23-story condo tower that was to be built on the southeast corner of Young Circle.
It's the second time that Hollywood officials gave a developer loads of incentives, only to have that developer's plans collapse. The first time was with Gary Posner and Patricia Peretz, the inexperienced developers who proposed the Hollywood Art District, or HART. That venture went belly-up in 2006, taking the city's $3 million loan down with it.
WSG arrived as the savior. The Miami-based developer proposed to buy out HART, assuming that $3 million debt, and craft the ArtsPark Village, if only the city would agree to allow WSG to build a tower much taller than was recommended in the city's master plan and to collect 90 percent of the tax revenue it generates in its first 15 years.
Even then it was apparent that WSG executives weren't saviors but opportunists with a sense for Hollywood's desperation. The city had failed to ensure that it was protected in the event of HART's foreclosure. It needed some developer -- any developer -- to buy out HART before the property was auctioned off. If it failed to find one, the city stood to lose the millions it had already invested in the property.
But by the time WSG's plans went to the commission for approval in 2008, its executives had told the city that it wouldn't be able to afford to pay back that $3 million loan after all. Had the city done more rigorous checking, it would have learned that WSG was already having financial trouble with a development in Miami Beach. That, plus neighbors' concerns about the design and height of the building left one to wonder what exactly the city was getting through its partnership with WSG.
Here's an article I wrote about this panicked moment in Hollywood politics. In short, the deal with WSG was doomed from the start, and this week's foreclosure was virtually inevitable. Given the lopsided terms of the deal, it may even prove to be a blessing. Like a broken clock, even Hollywood development plans have to be right at least once.
It's not clear what the city's next move is, and due to a retreat, there was no one in City Hall today who could answer questions. No one's answering the phones at WSG, either. If I hear back I'll be sure to update this post.
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