Close to opening as the James, the hotel that is part of the ever-evolving real estate development project on Sunset Boulevard at La Cienega now will be branded as the “1.”
West Hollywood City Manager Paul Arevalo confirmed the change at last night’s City Council meeting, responding to news reports that the James, originally set to open in March and then on May 1, was being replaced by the “1.” The replacement of the James by the “1” indicates that Barry Sternlicht’s Starwood Capital has closed on its rumored purchase of the James hotel building from CIM Group for $280 million. Sternlich launched the “1” brand in 2015 with a hotel in Miami’s South Beach and now also has hotels near New York City’s Central Park and in Brooklyn.
The purchase has left some scrambling. For example, the West Hollywood Chamber of Commerce had booked the James for its annual “State of the City” event and at the last minute had to find a new location. The event will be held Thursday at The Lot. The status of those hired to work at the James is not clear, although Arevalo said there will be a job fair for the new hotel soon.
The hotel is part of the Sunset La Cienega project, which was the first major construction project approved after West Hollywood was incorporated as a city in 1984. In 1999, the City Council approved plans for the project, then called the Sunset Millennium. It called for construction on three parcels – one on the southeast corner of Sunset and La Cienega, one on the southwest corner of Sunset and La Cienega) and one on the southwest corner of Sunset and Alta Loma.
But because of problems securing financing, the original owner, Sunset Millennium Associates, sold the property to the CIM Group in 2011. CIM Group also owns the Lot movie studio on Formosa Avenue and the Hancock Lofts in WeHo’s Boystown.
The hotel, which sits on the southeast corner of Sunset and La Cienega, consists of two 10-story towers with 15,000 square feet of retail space. It has 286 hotel rooms, with nearly three dozen suites. According to Curbed LA, they include two penthouse lofts with private terraces, two bungalow suites with direct access to the pool, and nine suites with floor-to-ceiling windows that measure over 600 square feet. In a story in March, Curbed LA reported that room rates at the James would be $399 a night during its first month and would increase to $519 a room a month later.
The middle parcel has two eight-story towers with 190 residential units and 55,000 square feet of retail, including a new Fred Segal store. Both parcels have large public plazas with viewing terraces and contain large billboards.
The Sunset/Alta Loma part of the project was completed relatively quickly, with 100,000 square feet of retail space (including the Equinox gym) and a 10-story office building. It changed hands and was sold by Palo Alto-based Broadreach Capital Partners late last year to Kilroy Realty Corp. That purchase, reported first by The Real Deal, a real estate trade website, totaled $210 million or $1,179 a square foot, making it one of the most expensive commercial real estate deals ever in West Hollywood. Tenants in that complex include Equinox gym, H&M apparel, Olive Peoples eyewear, SoulCyle exercise salon, Swarovski, Regus and Primo, the coffee bar.
The hotel’s reported purchase price would value it at nearly $975,000 a room, a metric used in the hotel development industry. That compares with the same price reportedly paid by Northwood Investors purchase of the London West Hollywood but is eclipsed by the reported $1.2 million a room paid by Jeff Klein and his investment partner for his former partner’s 80% stake in the 81-room Sunset Tower Hotel.
Arevalo told the City Council that the change in the brand would benefit the city because “1” is a “higher-caliber” hotel brand and because it is part of an international reservation system. He noted, however, that the inevitable delay in the hotel’s opening will have an impact on the city’s anticipated revenue from its hotel room occupancy tax.