One of my faithful readers [a recent audit confirmed that there are at least three of them] requested that I write about the LVMH Louis Vuitton Flagship project approved by the Planning Commission last week. More specifically, the request was that I compare the current project that was approved and does not seem likely to be challenged with what might have been, the “Cheval Blanc” uber luxury hotel that was approved after completion of all of the City processes but very narrowly rejected by Beverly Hills voters in May 2023.

Notably, some of our City leaders characterized the rejection of this hotel project as a “tragedy.” Beyond that, there was a concern about what, if anything, would happen at the site between Rodeo Drive and Beverly Drive on Santa Monica Blvd.

Now we know.

There will be an architecturally dramatic Frank Gehry designed retail and museum/exhibition space that will include a Louis Vuitton “Flagship.” The details of the “flagship” have not been revealed but we can get some sense of it from the company’s flagships in New York City and Paris. The original New York flagship is currently undergoing construction and renovation and during that process, the company has opened a temporary flagship. That store is spread over five floors and contains a mix of retail, culture and food. For a “temporary” facility it is spectacular and features a 50’ high display of iconic LV trunks.

Similarly, we can only infer what will be displayed in the exhibition/museum space from other Louis Vuitton flagships. That is, there likely will be displays of historic LV trunks, handbags and the work of artists who have historically collaborated with the LVMH family of companies.

In contrast, the Cheval Blanc was to be a very high end hotel, one of a small chain that LVMH has created. It was proposed to have 115 hotel rooms, a private club and some retail with 220,000 sf of floor space in a building that would be as high as nine stories and up to 115’ tall. The hotel rooms were to be very pricy, from $1,100/night to as much as $20,000/night and the private club would likely have been expensive and exclusive. The height and bulk of the proposed hotel was a concern shared by residents as well as concerns about traffic and the alteration of the path of the alley between Beverly and Rodeo that served the merchants on those streets. The project was also opposed by organized labor which funded both the gathering of signatures to put the referendum on the ballot and the campaign to pass the referendum.

The project would have provided significant financial benefits to the City. The Developer had agreed to pay the City $26M as a public benefit fee and another $2M payment for “arts and culture.” Further, the City would have received a Transient Occupancy Tax of 19% of all hotel occupancy charges as well as sales tax revenues from retail and restaurant sales. Most significantly in my mind was the fact that, together with the Aman Hotel planned for the One Beverly Hills development, the Cheval Blanc Hotel would have made our City an even more attractive destination for wealthy travelers from around the world who create great support for our City.

Most of the objections that caused the Cheval Blanc referendum to pass and reject the project have been addressed and eliminated. The new project will be only 45’ tall (or up to 60’ including the rooftop facilities. In addition to its much lower profile, the square footage is significantly less, only around 100,000 square feet. It will apparently generate far less traffic and will not disrupt the alley. In addition to retail, it will have a large exhibition/museum space and a fine-dining restaurant, both available to the public on a reservation basis intended to spread out the usage.

Economically, on the other hand, the new project will offer far less to the City than the Cheval Blanc would have provided. There will be no public benefit fee, no art and culture contribution and no 19% TOT. While the City will receive sales taxes, the City’s share of sales taxes is only 1% and will not offset the loss of TOT revenues.

The new project will be architecturally stunning and there is a lot to like about it. And I like it. But, truth be told, I prefer the Cheval Blanc.

Most of the bases for opposition to the Cheval Blanc and caused it to be rejected (by an extremely narrow margin.