Saks Fifth Avenue in Beverly Hills may be set to lose its parking lot, and they are not happy about it. Back in 2004, Saks sold the lot to a partnership between developer and Alan Casden and private equity firm Cerberus Capital Management, which planned to develop 66 luxury condos on the site. As part of the deal, the project would also include parking for Saks shoppers and employees. In the nine years since the sale, the project moved in fits and starts but never got through the approvals process. And now it's really dead. Casden and Cerberus had a nasty breakup a while back, and Cerberus has been steadily unloading its undeveloped properties around town (those include WeHo's Movietown Plaza and the Ross Dress For Loss project on Third Street). According to the LA Businuess Journal (sub. req.), Cerberus has an offer of more than $20 million for the site, but Saks is suing to halt the sale. The store alleges that Cerberus "is refusing to lease parking spaces to the department store or to transfer the parking agreement if it sells the property," and wants a guarantee that whoever buys the site to develop it will include 171 parking spaces for its exclusive use. The LABJ estimates that providing those spaces could cost $10 million. But if you're inclined to shed a tear for poor innocent Saks, caught in the middle of the ugly Casden/Cerberus divorce, don't; this whole thing seems to be Saks's fault.
"No agreement was hammered out regarding Saks' parking prior to the condo project's construction. 'It was almost as if they assumed that the entitlements were a done deal and construction would commence almost imminently,' said Dale Goldsmith, an attorney ... 'You look back at the mid-2000s when the market was hot and things were being developed left and right, and perhaps it didn't occur to them that things would grind to a halt and the site wouldn't be developed.'" Obviously things were different a decade ago, but that seems like a rather major oversight.
The Saks project is not the only victim of the drama between Casden and Cerberus. The partnership had grand plans to develop the Ross Dress for Less site across from the Grove and for a big mixed-use project at WeHo's Movietown Plaza, in addition to this project and several others. Then things went bad, and Cerberus--which was the money half of the operation and not a developer--started selling off the properties.
· Project Stalls In Parking Lot [LABJ, sub. req.]
· WeHo's Mostly-Empty Movietown Plaza Site For Sale [Curbed LA]