Big Changes in Downtown Hotel Scene

The long vacant Commercial Exchange Building at Eighth and Olive streets.

DOWNTOWN LOS ANGELES—July is turning out to be a huge month for hotels in Downtown Los Angeles. In addition to the debut of a $172 million tower with two Marriott brands at L.A. Live, plans have been announced for a new hotel at Eighth and Olive streets, and the venerable Hotel Figueroa has been sold.

The most striking change is at the edge of the Historic Core and the Financial District, where the 13-story Commercial Exchange Building has been sold and is set to become a Freehand hotel pitched toward young travelers. Freehand is a partnership between billionaire investor Ron Burkle’s Yucaipa Companies and the Sydell Group.

The project, according to a release from the office of 14th District City Councilman José Huizar, will create approximately 200 rooms, along with ground-floor retail and a restaurant. The Freehand, according to a prepared statement, will have traditional guest rooms as well as group rooms with up to eight beds. They can be reserved individually or as a whole.

It will be the third Freehand, following a location in Miami and another one under construction in Chicago. It is expected to create hundreds of jobs. Freehand hopes to start construction in the third quarter of next year and open the hotel in summer 2016.

It represents a major change for the Commercial Exchange, which opened in 1924 and was designed by the prominent Los Angeles architecture firm Walker & Eisen. In its early years the Beaux Arts structure held the headquarters for the then-giant Owl Drug Co. It also contained the office of Edgar Rice Burroughs, the author who created Tarzan and other characters.

“As we continue to increase our hotel stock in Downtown, this project will provide a unique option to travelers and those seeking a creative, social experience as they explore Downtown,” said Huizar. “This model has been successful in other cities and we are excited to see what Freehand does to revitalize this beautiful, long-vacant building and transform it into a center for culture and innovative hospitality.”

Unbeknownst to many, the building was the site of one of the strangest construction jobs in the history of Los Angeles. In a 2004 Los Angeles Downtown News article, Jay Berman described how, in 1935, a five-foot section was literally cut from the building. The effort, undertaken by the Kress House Moving Company, was spurred by the need to widen city streets to make way for the increasing number of automobiles. The building was deemed too big and had either to be razed or shrink.

The five-foot section, Berman wrote, had been used for storage and hallways. After it was removed, he wrote, “a crew that now numbered 75 began to push the western half of the building toward the stationary half. They used the ‘patented methods’ Kress’ sign boasted of, a number of huge jacks with threads. Each turn of the jack moved the two halves 3/8 inches closer while 14 braces held the western half steady. A crowd gathered to watch. In about nine hours, they were done. There were no accidents or substantial injuries.”

The Commercial Exchange has sat vacant for years. It sits on the same block on Eighth Street as Colori Kitchen and the Golden Gopher bar.

In South Park

The Hotel Figueroa, which caters to large tour groups and is well-known for the huge south-facing walls that carry a triptych of huge advertisements, has been sold to a joint venture between GreenOak Real Estate and Urban Lifestyle Hotels. The latter firm is comprised of investors Bradley Hall, Jack van Hartesvelt and Mark van Hartesvelt.

The property at 939 S. Figueroa St. is now being managed by HHM, which operates 17 other hotels on the West Coast, including four in California. The deal closed on July 14.

It is unclear what changes will come to the Hotel Figueroa. The 1925 building has 285 rooms, along with 25,000 square feet of special events and catering space. It is a popular destination for private events, with a Moroccan-themed decor and an outdoor bar adjacent to a coffin-shaped swimming pool.

It is all part of a rapidly changing hotel scene in Downtown Los Angeles, which tourism officials say desperately needs more rooms to make the city a viable convention competitor to regional rivals such as Anaheim and San Diego.

The new Marriott tower is a 23-story edifice with 174 Courtyard by Marriott rooms, which are directed at business travelers on a relative budget. It also holds 219 Residence Inn rooms. These are larger, with full kitchens, and are primarily marketed to extended-stay travelers in town for conventions and families on vacation.

Another older building is also slated for a turnaround. Last year a joint venture between developers Frank Stork, Channing Henry and longtime Downtown player the Kor Group purchased the Case Hotel. They plan to turn the 1924 building at 1106 S. Broadway into a four-star boutique hotel.

Copyright 2014 Los Angeles Downtown News