High-end retail center approved in West Hollywood.

West Hollywood placed its bet last week on the city's long-blighted east side. It bet upscale.

Rejecting Costco's bid to build a big-box center, the West Hollywood City Council instead went with a plan submitted by a partnership of J.H. Snyder Co. and Regent Properties to develop a retail-entertainment project on a 7.75-acre parcel at the intersection of La Brea Avenue and Santa Monica Boulevard.

Snyder will take the lead role in the partnership. "We decided the Snyder project was more in keeping with the needs of the community," said West Hollywood Mayor Steve Martin.

Martin lauded the development as an open, urban gathering place, which will include outdoor cafe seating, a plaza, fountains and original artwork.

The 270,000-square-foot first phase is designed to encompass shops, restaurants, subterranean parking, a second-story an-house cinema and two levels of creative offices with operable windows and balconies with vine-covered trellises. Snyder is in preliminary talks with Sundance Cinemas to be the theater operator.

Phase two may be a combination of sound stages and residential housing and/or a hotel component.

An environmental impact report and other reviews must be done before Snyder begins construction, which is expected to occur by year end. The company is assembling the property from four separate owners.

The total cost of acquisition and development will be about $65 million. said Milt Swimmer, a senior partner at Snyder who is spearheading the project.

The city issued a request for proposals more than a year ago. Currently situated on the parcel are a carwash and some industrial buildings, as well as the historic Formosa Cafe, which will remain.

"What the city wants is to create something that will stimulate quality development on the east side. We did that on the Miracle Mile," Swimmer said.

Architecture firm RTKL is designing the project, while Snyder partner Cliff Goldstein is directing the leasing effort.

Apartment building sold

Irvine-based Bascom Group, which specializes in "value-added apartment complexes," saw opportunity in Westchester. The firm recently purchased a 175-unit apartment building for $14.6 million.

Bascom plans to spend $1 million to upgrade the two-story, garden-style complex, said Jerome Fink, managing director.

Monthly rents will be increased by $150 to $200 as leases roll over, Fink said. Rents on the Westside have appreciated 10 percent to 15 percent in the past year and there's very little vacancy in the Westchester area, he said.

"The biggest rental increases have been near the coast and it's starting to trickle in," Fink said.

Bascom, which has some 2,500 units in Southern California, looks for class-B and C properties in class-A locations, usually in infill markets, Fink said.

Financing for the acquisition was arranged by Gary Mozer and Lee Norman of George Smith Partners Inc.

Retail acquisition

A Woodland Hills developer has acquired the Devonshire Reseda Shopping Center in Northridge and plans to renovate and expand the complex by as much as 25,000 square feet.

KMI Real Estate Group Inc. acquired the 136,000-square-foot shopping center from RREEF Funds for $19.5 million. About 45 percent of the center was vacated in preparation for the sale and proposed renovation.

"We're not certain yet if we're going to go up to the full 25,000 square feet (of additional space), but our intent is to give it a major remodel," said Jay Kerner, president of KMI,

Kerner said the area's demographics, coupled with the high traffic at that intersection, make the center a desirable acquisition.

"The current vacancy rate (in the area) is about 6.5 percent, so there's a high demand in the area and there are still quite a few tenants not represented in the marketplace," Kerner said. "Our intent is to bring in some new, big-name tenants."

Gamemaker deal

A division of Sony Computer Entertainment called 989 Studios has leased 19,300 square feet of creative office space in the Penn Central Studios on Stewart Street in Santa Monica, said Jeff Palmer, a managing member of the property's ownership group.

About 40 people will work at the new location of the Sony division, which specializes in developing computer games centered on sports.

"These are software designers who were attracted to the creative, warehouse environment. They will be using a very open design, with flexible office arrangements," Palmer said. "The arrangement will be continually changing each time they embark on a new project."

The entire building - which Palmer's group purchased two years ago and stripped down to its shell - has 75,000 square feet of space, about 11,000 of which is still available. Other tenants include Steelcase Inc. and Summit Entertainment, said Palmer, whose partner is Scott Sternberg.

The value of Sony's 10-year lease was not disclosed.

Business park action

The Golden Springs Business Center has signed its third major tenant, Invacare Corp., which is taking 150,754 square feet in a five-year lease.

Invacare, a public company headquartered in Ohio, specializes in designing and manufacturing medical equipment for home health care, retail and extended care markets.

The business center, located in Santa Fe Springs, has now leased 400,000 square feet prior to the completion of its 713,000-square-foot first phase. Leases had previously been signed with Tyco International and Central Garden & Pet.

The center, at the intersection of Carmenita Road and Imperial Highway, is designed ultimately to include more than 5 million square feet of space.

Lease rates have risen there since last year, from the high-30-cents-range to 43-45 cents per square foot per month today, said Moshe Sassover, manager of the Golden Springs Development Co. and a member of the family that owns the park.