Amerland Group Considering Purchase of Rosslyn Hotel

By Eric Richardson
Published: Wednesday, July 15, 2009, at 12:03PM

Dave Bullock [Flickr]

The twin towers of the Rosslyn Hotel with neon lit for filming in 2007. Affordable housing provider The Amerland Group, which owns the Rosslyn Lofts (right), is in escrow to purchase the Hotel Rosslyn (left).

DOWNTOWN LOS ANGELES — Affordable housing provider The Amerland Group has signed a contract to purchase the Rosslyn Hotel at 5th and Main. The company owns the Rosslyn Lofts, the hotel's sister building located across 5th street, and the Alexandria at 5th and Spring.

Jules Arthur, Amerland's COO, says that his company is "evaluating what is the best use for the building," and that the firm will engage the community on best uses for the building before making a final decision on the purchase.

The building, located at 112 W. 5th street, has long been listed for sale. This Spring it was in escrow to be sold to Common Ground, a New York-based affordable housing provider.

Common Ground proposed a tenant mix for the building that targeted 50% of the units toward chronically homeless individuals with substance abuse and mental health issues, a move that upset many in the community.

An Amerland purchase would reunite the two halves of the Rosslyn Hotel. The northern half, now the Rosslyn Lofts, opened in 1912. The southern annex was opened in 1923, and a tunnel under 5th street connected the two.

Arthur could not give an exact purchase price for the structure, but said that it would be greater than $10 million. He said that his firm is still considering funding sources. "We've got lots and lots of pieces, and we have no idea how to put them together yet," said Arthur.

The Rosslyn Hotel is currently owned by 111 Zuma Corporation, run by Rob Frontiera. Frontiera had converted the upper floors of the Rosslyn Lofts to residential before selling that building to Amerland in 2007.

This month, Amerland began renting the lower floors as small affordable units, as Arthur said that he would imagine a similar renovation for the hotel.

San Diego-based Amerland entered the Downtown market in 2006 when it purchased the 463-unit Alexandria for $30 million. In 2007, tenants of the building filed a lawsuit alleging mistreatment by Amerland. That suit was settled earlier this year, with Amerland and the Community Redevelopment agency agreeing to pay $1 million for housing and compensation.

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Comments

Ken H writes:

I think they should require whoever buys the building to restore and permanently light the signs on the roof.

# on Jul.15.2009 AT 06:09 PM

bowchikabowbow writes:

I couldn't agree more Ken H. And I think they should have to convert the building to residential. The whole area from Main to Broadway should be zoned residential for buildings taller than 4 stories.

# on Jul.15.2009 AT 10:56 PM

www.develhotel.com writes:

These are iconic buildings. I hope they do a god job whatever the outcome.

# on Jul.16.2009 AT 03:18 AM

nave writes:

@ken & bow

Really? That seems like it would burn an awful lot of electricity. Not a terribly green idea is it? It's somewhat of a shame that, under the new ownership, there will not be on-site support services for current tenants who need them. That was one good aspect of Common Ground taking ownership.

# on Jul.16.2009 AT 07:54 AM

Eric Richardson writes:

bowchikabowbow: The Rosslyn Hotel already operates as a residential building. Any questions would just involve what sort of residential.

# on Jul.16.2009 AT 08:15 AM

ChattyCathy writes:

If they've got good parking, converting to market rate units may be profitable, especially if the developers apply for the Mills Act. Who wouldn't want to own a piece of that building, especially when the economy and bank financing improves?

# on Jul.16.2009 AT 07:31 PM

bowchikabowbow writes:

Eric, I have to say that You are one of the coolest journalist ever for addressing a comment from someone named bowchikabowbow as bowchikabowbow. But, you would be the coolest journalist ever if you addressed bowchikabowbow as Mr. BowchikaBowBow or as Sir Bowchikabowbow.

Anyway thanks, for the correction and I wanted to reply to Nave by saying simply ... good point.

# on Jul.16.2009 AT 07:58 PM

Eric Richardson writes:

ChattyCathy: The building has affordability covenants on it, so while a small percentage of the units can go market rate, the bulk must remain affordable housing. I'm not sure whether they're strictly required to remain rentals, but that's Amerland's typical operation.

bowchikabowbow: I'll be sure to use Mr. BowchikaBowBow in the future. Pre-clarification, though, I wouldn't have wanted to make any gender assumptions.

# on Jul.16.2009 AT 11:11 PM

kenarch writes:

Nave: While I agree with your green point of view, I disagree with the premise that keeping the iconic neon signs lit and maintained would be a poor use of funds. I direct my efforts at a different side of the problem... that of priorities. When you realize that for the price of making, and delivering on Tomahawk cruise missile to a building in Baghdad, these signs, and most of the rest of LA's archetypal neon could be lighted for a solid year or more, it makes me work toward making that shift in priorities happen. Light 'em up! Then go to work to increase the re-prioritizing of funding, not just for lighting... but foe low income housing right here, perhaps in this building... and that's just the beginning. The money is there... it is just shoved in the wrong direction. As for the Common Ground not happening - these services can be grass-roots... and LA (and even more in NY) are examples of this working quite well.

# on Jul.18.2009 AT 04:10 AM

Inbetweener writes:

If Amerland buys and converts this building to "affordable housing" like they have with their other buildings, I hope they factor in units for tenants who make more than $33K but still can only afford to pay $700-$900 a month. We need housing too, you know.

# on Jul.18.2009 AT 02:03 PM

resident writes:

nave:

From what I've read, the offices across the street with the posters of previously homeless(?) are Common Ground support services. They don't need to monopolize both corners.

# on Jul.19.2009 AT 10:12 AM

Vivo writes:

Light up the sign! It is well worth the cost of doing it, as Kenarch rightly argues. It is the character and history of downtown LA.

Whatever happened to the initiative to spread out homeless services throughout LA? Can we continue to try to do that please? Or have we resigned ourselves to downtown continuing as the only acceptable place for the homeless because all the other places where homeless services are proposed have fought them tooth and nail?

# on Jul.19.2009 AT 10:31 PM

downtown la resident writes:

I live in Rosslyn Lofts and it is a disaster. No hot water, limited satellite TV reception, no fire prevention systems, and on and on. For years. Avoid any Amerland project at all costs, your landlord is basically the Mafia.

# on Jul.21.2009 AT 11:57 AM

Chattycathy writes:

Eric, educate me on these "affordable covenants". Are they forever? Where can I go to read up on these kinds of things. It just kills me that the Rosslyn may always be some shabby den of small, cramped units. I wish I had all the money in the world, then I would buy the Rosslyn and the Alexandria and restore them to their grandeur. Isn't it a shame that foreign developers want to build new hotels on Figueroa, but can't buy and restore these buildings because of these stupid covenants. Downtown will forever remain shabby because of all these rules. Too bad.

# on Jul.22.2009 AT 07:32 AM

Eric Richardson writes:

I was actually corrected on the state of the Rosslyn. It has no affordability covenants (which I'll explain in a minute), but is on the city's residential hotel list. That means that if a developer wanted to take the building market-rate they would need to create the same number of replacement units as affordable housing.

Those replacement units would have 55-year affordability covenants. Basically, these covenants tie rents in the building to certain percentages of the area median income.

Most often, buildings get these covenants when the city or CRA put some money into an affordable project. The intent is to make sure that the building doesn't turn around and go market-rate after they've put money into it as an affordable structure.

Given the cost of building 200 or so units of replacement housing, it's questionable whether any developer could make a market-rate conversion of a building like the Rosslyn actually pencil out.

# on Jul.22.2009 AT 08:25 AM

Bert Green writes:

The Rosslyn Hotel is a market rate residential hotel. The tenants are protected by rent control, and the city will not allow the total number of units to be reduced, but it is otherwise unrestricted. The current owners have done a great job, though attrition, in upgrading rooms as they become available and providing clean, simple, affordable housing to workers, artists, students, and anyone else who wants to live there. Long-term tenants who don't move get to stay at the old rates, which in some cases are as low as $200 per month. The renovated units run around $500 per month.

If Amerland were to buy the building and then use public funds to acquire or renovate it, then they would be subject to additional restrictions. It's all triggered by taking public money.

So basically, as long as the overall number of affordable units stays the same, nothing changes.

# on Jul.22.2009 AT 01:52 PM

RosslynLofts writes:

downtown la resident - how long have you lived at the Rosslyn Lofts? I've been here since March, when the 10th floor finished, and your complaints are all linked to the continued construction and finishing of the building.

First - as a resident I've kept in close contact with the manager, Mike - who is a great guy who gets things done and keeps me (and my friends who live here) informed. Yeah, water, electricity and fire-alarm testing has been a pain in the ass, but it's to be expected. The discount we received on July rent was quite nice and considerate.

Dish Network/AT&T Home Entertainment, have been absolutely awful - but how is that the buildings fault? From what I've been told, management have been fighting with them as well - there's a contract issue between them - going back to the previous owners/property management, which is what the big problem revolves around. HOWEVER, as of this past-month, Time Warner was added as an option for all floors (and not just 3-9), I've switched, and while the DVR's are a piece of crap, the channels work, unlike Dish.

I've only been here since March, and had to go through everything you've had to go through, it's frustrating, but now that the units are all but finished, and attention is being turned to cleaning up the outside, the lobby, the laundry room, etc - things are looking up.

The only problem I currently have deals with most of the long-time residents who still park in the garage as tho they are the only residents. All spaces are now spoken and paid for by residents (new and old), but hopefully this will be remedied once assigned parking is given out. No more cars sticking out 3 feet from the wall or taking up 2 spaces...

# on Jul.29.2009 AT 01:53 PM