Closing act on Palladium bill?

Another Hollywood relic is facing possible extinction.

Combined Properties Inc., a developer of commercial and residential properties, is negotiating to buy the Hollywood Palladium, which has hosted Frank Sinatra concerts and Academy Awards presentations, among many other events.

Alan Shuman, president of the venue's owner, Palladium Investors Ltd., confirmed the group is in talks with Combined Properties but characterized the discussions as being at an early stage.

"There's no contract," he said. "But are they looking into it? Yes."

The sale price would be close to $65 million, according to sources close to the deal. Messages left for Washington, D.C-based Combined Properties weren't returned.

However, developers familiar with the Sunset Boulevard site believe the 66-year-old hall's nearly 4-acre property has become more valuable as a location for housing and new shops and restaurants than as a concert venue. What's more, a project likely wouldn't pencil out unless the hall is knocked-down, they say.

There has been a string of Hollywood icons that could be converted or razed to make way for new mixed-use housing developments. They include the Capitol Records building, Columbia Square broadcast center and the former location of radio station KFWB-AM (930).

"We are losing so many sites related to the history of Hollywood," said Jay Plan, preservation advocate at the Los Angeles Conservancy. "And the Palladium is at the top of the list of Importance."

Even so, the Palladium hasn't been listed on any historic registers at the city, county, state or federal level and lacks those protections.

Platt said a recent survey conducted by the Community Redevelopment Agency of Los Angeles found the Palladium is eligible to be listed on the National Historic Register. "I'm not sure why it hasn't already been listed," he said.

Whether the city would allow the theater to be demolished or altered to make way for a project remains to be seen. Councilman Eric Garcetti, whose 13th District includes the Palladium, said other developers who have wanted to build on the property incorporated the venue into their plans.

"We're very pleased that over the last year we've seen several development proposals for the site that include a preserved Palladium as a component of a larger development," wrote Josh Kamensky, the councilman's press deputy, in an e-mail.

However, Combined has leapt out ahead of the other developers because of its higher purchase offer.

One of those other developers was the Related Cos., which is the key developer of the $1.2 billion Grand Avenue project in downtown Los Angeles. Bill Wine, president of the company's California operations, confirmed Related fell out of a contract to buy the property three months ago, but he declined further comment.

Storied past

Helmi Hisserich, who heads the Hollywood operation of the Community Redevelopment Agency of Los Angeles, said Combined Properties hasn't spoken with the CRA, but her agency would like to see the Palladium remain intact.

"We would want them to come up with some way to save and reuse the Palladium," Hisserich wrote in an e-mail.

Hisserich added that the CRA has been pleased with past experiences working with Combined Properties and Maryann Lowenthal, head of the company's regional operations.

Before joining Combined, Lowenthal led the development of the Sunset + Vine mixed-use development. "They are the kind of developer we'd love to have develop a site like this," Hisserich wrote. "Combined Properties has the wherewithal to put together a complicated deal."

The Palladium is in the middle of a rapidly changing area of Sunset Boulevard, where hundreds of new apartment and condominium units are in various stages of development.

CIM Group is converting the Sunset Tower at the southeast corner of Sunset Boulevard and Vine Street into apartments. Camden Properties Trust wants to build a mixed use housing and retail project with a Whole Foods Market Inc. grocery store at Vine Street and Selma Avenue.

And Second Street Ventures LLC, a Marina del Rey-based residential developer, is planning a 10-story tower at the former KFWB site at Vine Street and Franklin Avenue.

Hollywood producer Maurice M. Cohen built the 11,000-square-foot Palladium, which opened in October 1940, to be the world's largest nightclub and ballroom.

The venue soon became home to acts such as Tommy Dorsey and Frank Sinatra. In 1961 the Palladium became the base of operations for Lawrence Welk's television show, and the venue hosted the Academy Awards sporadically between 1954 through 1974.

Scenes from films such as The Blues Brothers and Almost Famous were filmed at the Palladium, which also recently was the location of episodes of Fox's hit TV show American Idol. In June, the venue is booked for five dates, including two private dinners, plus three set-up and load-out days, for which it is remunerated.

Palladium Investors is led by managing partners Steve Ullman, also owner of Grant Parking Inc.--Hollywood's largest landowner--and Larry Worchell, a real estate investor. Shuman handles booking and day-to-day operations.

Shuman said the hall doesn't need any changes to remain profitable. "We're still doing business. We're still booking events. The Hollywood Palladium is doing very well," he said.

Worchell said developers frequently try to buy the Palladium, but none have been able to make a deal work.

"We always look at the market place, but we haven't actively offered it for sale," he said. "In my 14 years here, there have been as many serious offers. There's always someone interested in the Palladium."