Tiff Over Hilton Tower

When Hillcrest Real Estate LLC, owner of the Hilton Los Angeles/Universal City, submitted paperwork Jan. 10 with the city of Los Angeles to build another hotel tower adjacent to its current building, it came as a shock to NBCUniversal. The entertainment company, which owns nearby Universal Studios Hollywood and City Walk in Universal City, has a hit attraction in the Wizarding World of Harry Potter, which opened in 2016. Hillcrest wants more hotel rooms to cater to the expanding crowds at the theme park, but NBCUniversal objected in December to the proposed project’s size. A contract between Hillcrest and the media giant requires NBCU’s approval prior to Hillcrest submitting development applications. “We are surprised to hear that Hilton would submit an application without reviewing plans with us and receiving consent from NBCUniversal as they are obligated to do,” read NBCUniversal’s statement last month. “Our key priority is to make sure that any development is compatible from a scale, density, traffic and other impacts standpoint. We understand the currently proposed project substantially exceeds what is allowed by current zoning.” ‘Impasse’ in discussions Hillcrest plans to construct a 15-story, 365-room addition to its venerable 495-suite hotel, which stands 24 stories tall on NBCUniversal property. The L.A. real estate developer’s goal is to start construction in 2020 and open in 2022. Hilton Los Angeles/Universal City General Manager Mark Davis, also chief executive of Hillcrest, said his company has been working in good faith with NBCUniversal on the tower for more than two years. “Having reached an impasse in those discussions, Hillcrest has taken the next step and filed our development application with the city,” the real estate company said in a statement. “We look forward to working with our neighbors at NBCUniversal to achieve consensus on our expansion plan.” Both the former Universal Studios – now yoked with National Broadcasting Co. and a subsidiary of Comcast Corp. – and its signature amusement park have grown significantly since the Sheraton Premiere Hotel opened in 1984, before Hillcrest purchased and rebranded it in 1990. Hillcrest needs the additional rooms to accommodate visitors to Universal’s theme park, where attendance has increased dramatically because of the Harry Potter-inspired village and recently added “Simpsons” and “Fast and Furious” attractions. According to statistics released last June by Themed Entertainment Association and AECOM, park attendance climbed to 8.1 million visitors in 2016 – a nearly 14 percent jump of 986,000 attendees from 2015 – making Universal Studios Hollywood the world’s fifth-biggest theme park by attendance. Hillcrest’s Davis said everyone from L.A.’s mayor to the chamber of commerce agrees the region needs more hotel rooms, not only to accommodate Universal’s attendees but also visitors for the upcoming 2022 Super Bowl and 2028 Summer Olympics. “We cannot grow anymore without this expansion,” Davis told the Business Journal. Locals say they have witnessed how crowded and congested Universal City and surrounding neighborhoods have become and therefore demand to be kept in the loop on development efforts. “While it’s a known fact that there is a dearth of hotel rooms in Los Angeles, before any new hotels are built, we must first address the issues of traffic and density, as well as the impact to our local businesses and residents,” said Studio City Chamber of Commerce Executive Director Esther Walker. Mysterious opposition Costing more than $100 million, the Hilton’s new wing aims to accommodate guests in style with breathtaking views and a fine-dining steakhouse. The plans devote 8,000 square feet to restaurants and 10,120 square feet to a spa. “The community will be very proud,” Davis said. Which is why he called NBCU’s objections “a mystery.” “There has been no person in the community, publicly or privately, that understands the opposition,” he said. “Even staff on their team is not quite sure why there’s an opposition.” Hillcrest’s planners have abided by the covenants, conditions and restrictions between his company and NBCUniversal throughout the process, Davis added. “We’ve been fully compliant (with each revision),” he said. “We’ve been very cooperative with an attitude to reach a consensus.” NBCUniversal disagreed. “Over the last two years, Hillcrest has shared previous expansion proposals, to which we provided extensive comments and concerns. Instead of responding to our issues, Hillcrest chose to ignore its obligation and did not seek NBCUniversal’s consent or approval prior to filing the latest iteration of their proposal with the city,” said NBCUniversal spokesperson Cindy Gardner. She emphasized that NBCUniversal supports the Hilton’s ambitions. “We’re not against them expanding,” Gardner said. “It’s at our front door. Many people think that it’s our hotel because it says ‘Universal’ on it, so there’s a real obligation that things are done right.” However, Hillcrest wasn’t getting the necessary feedback on its designs, only rejection, Davis said. “Their only response has been, ‘We’re not going to tell you how to build your hotel,’” he said. Some reports have speculated that NBCUniversal may be entertaining ideas for its own hotel or housing complexes as part of its ongoing $1.6-billion Evolution Plan. Gardner declined to say what actions NBCUniversal might take – other than reviewing the Hilton plans – and Hillcrest has no intention to rescind the application. “We will continue that journey. It’s active with the city now,” Davis said.