Earlier this month, the much-anticipated James Hotel West Hollywood, at the corner of Sunset Boulevard and La Cienega, announced that it was backing out of the project. This was the second time the James brand pulled out of the Sunset Strip, having previously permitted a project on the vacant lot between the Hustler Building and 9000 Sunset. It is also the second no-go for a hotel project at the location, as it was originally linked to the JW Marriott and W Hotel brands.
The hotel will now be refurbished before it is even opened and is slated to become a “1” hotel, affiliated with Starwood Capital (not to be confused with Marriott-owned Starwood Hotels, originally linked to the site through the W brand, got it?).
At a rumored $280 million sale price, the hotel’s per-room sale price of $975,000 is more than 20% less than the price paid for the Sunset Tower Hotel (which for four years was known as the St. James). Given the value of the four tall wall billboards on the James/1 buildings, we have to assume that the anticipated Revenue Per Available Room at the James/1 Hotel is even less when compared to its neighbor down the street.
To the City of West Hollywood, a six month delay in bringing nearly 300 hotel rooms to market means big bucks. Conservatively estimating nightly rates at $250–below the City average–and an 80% occupancy, the City stands to lose $1.5 million in Transient Occupancy Taxes it had counted on in this year’s budget.
Currently, three other hotel projects are under construction–the Marriott Edition at Sunset and Doheny, the Sunset Time at the former House of Blues location and the Kimpton between Boystown and the Melrose Triangle. At least five other hotel/mixed use projects are in the development pipeline but not yet approved.