Downtown L.A. building set to go from drug den to luxury inn

A century-old brick apartment house and former drug den near Staples Center is slated to be reborn as a luxurious inn as demand for hotel rooms grows in downtown Los Angeles.

The boarded-up building is a conspicuous ruin in a neighborhood decidedly on the upswing, alongside a trio of top-drawer condominium towers built in the real estate boom of the 2000s. The condo developers tried to buy the three-story derelict at the time but were unsuccessful.

“The problem was figuring out who owned it,” said Homer Williams, one of the developers of the 19-story Luma residential high-rise next door.

PHOTOS: From drug den to luxurious inn

City officials later hoped to raze the building at 1130 S. Hope St. to make a public park, but also had difficulty figuring out who held its title as competing parties claimed control. The picture was complicated by more than a dozen liens from contractors, developers, lawyers and others who did work involving the building.

Enter Kevin Burke, a retired life insurance salesman from Manhattan Beach who managed to work through the title disputes and negotiate a complex $2.1-million transaction last year that got him the keys.

The acquisition was the first big hurdle in an ambitious plan Burke put together with three of his friends: The group wants to build a boutique hotel with a creative sensibility where they would enjoy hanging out with worldly guests.

It would cost an additional $25 million or so to make a proper hotel, he said, and architects are working on visions of how it might look. The developers hope to preserve the exterior brick walls while gutting and rebuilding the rest of the structure into an inn with 45 to 60 rooms, depending on how high they are allowed to build.

The interior, damaged by neglect, water leaks and vandalism, is probably beyond repair, Burke said. There are holes in the roof, the walls are cratered and the place — which reeks from the excrement of its many resident pigeons — may be structurally unsafe.

The partners have never developed a hotel but have the money lined up to get to work, Burke said. He acknowledges the development might not be a profitable business venture in the end, though.

“We might be too early to the market and we might overspend, but if the community keeps evolving as an urban hub, we hope we are perfectly placed on the slope as this curve moves upward.”

He likened the process to painstakingly restoring the rusted-out wreck of a classic car. Buying a fully restored old auto at auction might make more financial sense, but the new owner wouldn’t get the pleasure of bringing an old car back to life.

“We might be like the guy who builds that car and sells it to another operator — but we will leave a beautiful building in the space of a current crack house,” Burke said.

English musician Antony Genn was swept up in the process when he and Burke met at a dinner a few years ago.

“He is very interested in art and we just got talking,” Genn said of Burke. “He explained that he had this dream to own a hotel.”

Genn is the guitar-playing frontman for the Hours, an English rock band that has opened for U2 and Noel Gallagher’s High Flying Birds. His role at the new hotel, which has yet to be named, is “vibe consultant,” he said.

“We want to create a space that can feed creativity and has energy attached to it,” said Genn, who is involved in the London art scene. “Hopefully it will have a symbiotic relationship with downtown L.A. and not feel like something you picked up somewhere else and plopped there.”

Plans call for sponsoring an artist-in-residence program, he said. “It could be a young street artist from Mexico or Manchester, or a filmmaker or a musician.”

Burke’s goal is to create serendipitous interaction among guests and visitors. “We want it to be a unique, safe place for interesting people to have a conversation.”

His other partners in the venture are Pasadena lawyer Brian Okazaki and Redondo Beach investor Rick Son. The team hopes to get the hotel up and running in about two years.

Demand for downtown rooms is on the rise, hospitality industry analyst Bruce Baltin of PKF Consulting said. Hotel occupancy and room rates there have been growing at a faster pace than the national average.

“The lift from L.A. Live is doing this, and the convention calendar is getting stronger,” Baltin said. “We believe there is a real need for additional rooms, especially in proximity to the convention center.”

With the December closure of the 896-room Wilshire Grand, the downtown hotel market will grow tighter this year, Baltin said. Other projects are in the works, though.

The Wilshire Grand will be demolished and will be replaced by a 45-story hotel with 540 rooms and several floors of condominiums set to open in 2015. It will be developed by Korean Air Lines Co. and Thomas Properties Group Inc.

Williams, a Portland, Ore., condo developer at Williams/Dame & Associates, expects to break ground next month on a long-expected $160-million hotel development across Olympic Boulevard from L.A. Live. Set to open in 2014, it will be a 22-story tower containing two hotels: a Residence Inn by Marriott and a Courtyard by Marriott.

“South Park is really coming into its own now,” Williams said of the neighborhood around Staples Center. “L.A. Live has turned into the real deal, much more of an attraction than we anticipated. I think there is a robust market for hotels and housing to grow down there.”

roger.vincent@latimes.com