Newspaper ad critiques Downtown property for sitting vacant more than a decade
After more than a decade of flying below the radar, Clark Hotel, one of the Los Angeles properties associated with the powerful New York-based Chetrit real estate family, has come under public criticism.
Advocacy group Housing is a Human Right, a division of nonprofit AIDS Healthcare Foundation, ran a full-page ad in the Los Angeles Times Aug. 14, urging the city of Los Angeles to open the vacant Clark Hotel at 426 South Hill Street in the city’s Downtown, to the unhoused. The Clark is owned by a Chetrit family business
The ad follows a statement that Housing is a Human Right ran in July demanding the city take action and open up to the unsheltered another downtown hotel, The Cecil. Owned by Baron Property Group and Simon Development, The Cecil recently announced it would devote its 601 units to permanent housing for the homeless. Susie Shannon, policy director of Housing is a Human Right, said her group is campaigning for vacant hotel buildings in the Downtown area to house the unsheltered.
The Chetrits reacted to the advertisement in a characteristic way: Silence. The press-shy family made no public statement. It’s standard operating procedure for the developers and property owners known for making big deals out of the spotlight.
As a rule, the Chetrit Group is satisfied to bide its time. There have been few signs of any effort to develop the 109-year-old hotel.
Currently, it’s unclear how many units are in the hotel. The Property Shark listing site put it at 500 units, but a document filed with the Los Angeles Planning Commission said that the building had 348 units.
Clark Street Realty Associates, a LLC managed by Jacob Chetrit, a brother of Chetrit Group founder Joseph Chetrit, took over the hotel around 2006. Efforts to contact Chetrit family members and associates were unsuccessful. Emails and messages were not returned.
There were plans to turn the Clark Hotel into an operating hospitality business. In 2013, Clark Street Realty Associates applied for a conditional use permit to sell alcohol at proposed lobby bars and a banquet facility. In 2014, a planning commission group unanimously approved the permit. The approval took place when it was in vogue to sink a lot of money into remodeling early 20th century buildings in downtown Los Angeles and position them into luxury hotels.
The Ace Hotel company was the first in a string of luxe hotels to open in Downtown Los Angeles in the past decade. It made a big splash in January 2014 when it made an official debut in a remodeled early 20th century building less than a mile away from the Clark.
According to the Los Angeles Times, Greenfield Partners paid $11 million in 2011 for the building where The Ace is currently located. In 2015, the Ace’s building was sold for $94.3 million. In 2019, the hotel building was sold for $111.3 million to Aju Hotels and Resorts US LLC, according to Property Shark.
Several other prominent downtown Los Angeles hotels that opened in the past decade were The Proper, The Hoxton and the Freehand. There was also the NoMad, which was located in a former Bank of Italy building owned by The Chetrit Group. Located at 649 South Olive Street, it was sold to the Sydell Group for $39 million, according to media accounts. The NoMad opened in 2018 and shuttered in 2020, due to the pandemic. In 2022 it opened under different management as Hotel Per La.
Joseph Chetrit also led plans to turn giant Downtown building The Trinity Auditorium into a luxury hotel at 851 South Grand Avenue. As late as 2019, there was a news report which said plans to open a hotel at The Clark were going forward.
The bull market for hotels in Downtown Los Angeles probably has passed, said Alan Reay, president of Atlas Hospitality Group, a Newport Beach-based hotel brokerage and consulting company.
“I do not think anyone would look to add more luxe hotel rooms in Downtown L.A., until they see that the business market has returned to pre-COVID levels,” Reay wrote in an email. “The fact that so many businesses still have employees working remotely and we need to see the full return of meeting and convention business, will continue to hamper developers looking to add new luxe rooms.”