The developers of the Hollywood Arts Collective, a major residential complex for artists going up near Hollywood Boulevard, are facing a big lawsuit over alleged damage the project’s construction caused to a neighboring hotel property.
Shaun Tan, the owner of the neighboring property, where a hotel redesign was in progress, filed the suit in L.A. County court on Monday. Tan’s firm, Haller LLC, is also listed as a plaintiff. The defendants include the City of Los Angeles, the Hollywood Arts Collective’s two legal entities and the development firm Thomas Safran & Associates.
The two properties are adjacent on Schrader Boulevard, just off Hollywood Boulevard; the damage to Tan’s building, his lawyer claims, traces back to the Arts Collective’s implementation of subterranean parking.
“At some point in that construction it caused my client’s north side of the building some severe damage,” said Derek Chaiken, Tan’s lawyer. That damage took the form of “significant cracking” through the building’s interior, Chaiken said, including in the kitchen.
“Door frames are all ajar — you can’t close doors. It’s almost like the floors have been moved or the ceilings have been lowered.”
The building is also over a century old and has a historical designation, Chaiken noted. The suit alleges over $15 million in damage, a figure that reflects both lost rental income — Tan was leasing the building to the hotel operator — as well as the cost of potential new construction, the lawyer said.
“If that building needs to be replaced completely the cost could exceed $15 million.”
Jordan Pynes, the president of Thomas Safran & Associates, said the firm was unaware of any alleged construction problems until contacted by TRD.
“We completely dispute the allegations,” he said after reviewing the lawsuit. “We pride ourselves on working well with our neighbors and the community — we’ve had no issues with the property thus far. We were very surprised and we plan to fight it all the way.”
His firm, he added, has a decades-long track record of successful development in Los Angeles.
“We’re building affordable housing for low income families and low income seniors,” Pyne said. “It’s just frustrating when you get hit with such a lawsuit.”
The $120 million Hollywood Arts Collective, which is located at 1630 Schrader Boulevard, amounts to one of the biggest affordable housing developments dedicated to artists in Southern California.
The affordable housing project traces back to 2014, Urbanize earlier reported, when the City of L.A., which is financing the build through bonds, sought development proposals.
The seven-story project broke ground in early 2021 and is scheduled to be completed in summer 2023, according to its website. Withee Malcolm Architects is designing the project; renderings show a beige, mostly rectangular building where large square windows and balconies create a patterned, boxy facade.
Along with 152 apartments and nearly 7,000 square feet of ground floor retail space, plans call for an 86-seat theater, art galleries, rehearsal studios, office space and a new regional headquarters of the Actors Fund, a nonprofit that supports artists, Deadline previously reported.
The project will also have 72 parking spaces. The apartments — a mix of 20 studios, 79 one-bedrooms, 39 two-bedrooms and 23 three-bedrooms — will all be rent restricted, with the income requirements ranging from below 80 percent of the area median income (AMI) to below 30 percent. Twenty-five of the one-bedroom units, for example, will be available at $960 per month to residents whose households earn below 60 percent of AMI; 13 one bedrooms will be available at $640 to households who earn below 40 percent of AMI. Priority for the spaces goes to working artists, with eligible applicants selected based on a random lottery.
Thomas Safran & Associates — founded and chaired by Thomas Safran — is an L.A.-based firm that has built and manages dozens of multifamily properties throughout Southern California, including in Calabasas, Inglewood, Covina and Santa Ana. The firm specializes in mixed-use and low-rent developments, including for seniors.
Tan bought the hotel property through an LLC for $4.7 million in June of 2020, according to property records. The building, which was built in 1918, was previously a hostel; after buying it Tan then leased the building to a company that was renovating the space into the Cielo Hotel Hollywood, a boutique property whose promotional material leans heavily into the Tinseltown location. (“Every well-appointed room at the Cielo is fit for A-list celebrities.”)
The hotel operator discovered the structural damage last June, Chaiken said, and was forced to stall its business plans.