The Injustice of Eminent Domain in Hollywood

By Gregory D. Morrow

This one is personal. The block across the street from my building in Hollywood — the famous corner of Hollywood and Vine — is being taken from its owners by eminent domain in order to construct a $325-million mega-development (developed by Legacy Partners), including a fancy W Hotel, luxury condos, apartments, retail and parking. This is yet another example of eminent domain abuse, legitimized by last summer’s Kelo v. New London ruling. I sometimes think I am the only planner who thinks eminent domain is bad. I can’t tell you how many planners justify its use, even when the resultant development is a) entirely private and b) would make millions without using eminent domain. As I said here many times, eminent domain is simply about facilitating land assembly for developers. But, in order to justify it, cities must label an area “blight”.

One of the local shops that I frequent — The Juices Fountain — will be forced out. Check out the Fox News Report on the topic. This is a family business, started and run by Columbian immigrant Maggie Pena. They have the best fruit juices in town. On the walls are autographed photos of the stars that are regulars. And yet this is blight — this place where the celebrities go, and across my building, which recently sold for $165 million. Who knew that I was living in a “blighted” neighborhood?

It is sad that only Fox News (of all media outlets!) seems to care. Check out this quote from Hollywood Chamber of Commerce President and CEO Leroy Gubler (he’s an old-school kind of guy - the type that thinks all of the new housing in Hollywood is bad for business - he’s trying to get the adaptive re-use ordinance overturned, so that underutilized Hollywood office buildings are not converted to residential):

Blighted? An area is decline? My building (Bond Companies) opened in May 2004 - a mixed-use development with retail and financed privately. Next door is a new seniors housing building going up. Kitty-corner is a highrise (CIM Group) — click Properties then Los Angeles then Hollywood then Sunset and Vine tower — that is being converted to condos. On the corner of Hollywood and Vine (KOR Development) is another fancy condo conversion. The Arclight Cinerama Dome was just renovated with a new retail complex. There’s a new residential/hotel building (Palisades Development) just up the street — click Residential Hotel then Palihouse Hollywood. Also, the Equitable Building is being redeveloped (also Palisades) — click Developments then Lofts @ Hollywood and Vine. There are new restaurants popping up - including the Bowery and Magnolia. The point here is that this neighborhood is not exactly “in decline” and plenty of private capital is flowing into the surrounding blocks.

The fact is this: the developers and the city are in bed together to force the removal of small businesses that are not the “highest and best use of the land”. Eminent domain is being used to force them out and/or to facilitate a low offer on the land. This is done simply to facilitate the land assembly of the entire block, because the developer will see a higher return on a larger project. Why can’t the businesses, including the Juices Fountain — be given a low-rent space in the new project? I kid you not that the Juices Fountain literally occupies about 400 square feet of real estate. Surely out of the 60,000 square feet of retail in the new development they could give a cut-rate rental of 400 square feet (representing 0.67% of the new retail space)?

It is a shameful abuse of eminent domain powers - pure and simple. Where is the outrage? High-minded planners are taught in school that they should fight for the little guy, and when they get out into a city job, they roll over and help facilitate the very injustices they claim to be fighting against. At the end of the day, planners bow to political pressure to save their own job. Where is the backbone of the planning profession when you need it?