New burger chain owner seeks to flip Beverly Hills site.

SEEING a chance to recoup a large part of the $10 million it spent to buy the troubled Hamburger Hamlet chain out of bankruptcy, the new owner is offering a slice of the burger business.

Tavaco Inc., which closed on its purchase of the 13-unit chain last month, is marketing its prime Beverly Hills location for $5.5 million. The price includes $2.2 million for the restaurant and its liquor license and $3.3 million for the adjacent 35-space parking lot. The restaurant has leased the building at 122 S. Beverly Drive since the late-1950s.

"We believe there is a significant amount of value in that parking lot that we could capitalize and use to fund upgrades of other Hamburger Hamlet restaurants," said Steve Kelly, the chain's vice president of operations.

"We can use that (sale) to fuel our renovation of all the other restaurants in the chain and bring Hamburger Hamlet to a strong competitive position in the marketplace."

Theodore Zwicker, an associate at commercial brokerage Sperry Van Ness marketing the property, said national chains would be the most likely buyers.

"Not a lot of small operators can easily write a check for $5 million and not miss it," he said. "So most of the potential buyers we're talking to are large operators."

Tavaco's principal, Andrew Tavakoli, didn't return calls. In a March interview with the Business Journal, he said he would hire an experienced restaurant staff to run the operation and change the restaurants' design and menu offerings.

Kelly said the company wasn't considering selling other properties other than another parking lot owned by the chain.

"There's a huge amount of time and energy going into a full scale review of the entire brand," he said.

Project Progresses

CIM Group, which recently bought Hollywood & Highland, has begun construction on a long-delayed restaurant and retail complex at 6611-6637 Hollywood Blvd.

Jeff Kreshek, CIM Group's vice president of leasing, said the project has changed greatly from thee years ago, when CIM planned a multiplex for Laemmle Theatres.

"It's turned more into redeveloping storefronts as they exist, but the concept is the same," he said. "We're making a strong retail presence on the ground floor, and that's going to be a big improvement."

Signing on for space in the block-long project is David Judaken, who owns the Hollywood nightclub Garden of Eden. Judaken leased 4,900 square feet, including a large outdoor patio, for a club to be called Mood Lounge. He also took 3,800 square feet of second floor space in an adjacent building for his headquarters.

Club construction could start within a couple of weeks, and Judaken expects it to take five or six months to complete. "It is very, very exciting to finally know I'm going to get to do something else in Hollywood," he said.

Also readying construction is Dolce Group; Lonnie Moore, Michael Malin and Adolfo Suaya will be building out a 10,000-square-foot, two-story space at the corner of Hollywood Boulevard and Cherokee Avenue for its Geisha House.

The restaurant, from the same partnership behind the trendy Dolce on Melrose Avenue, is conceived as a modem, sexy take on an old Japanese concept, Moore said.

"This is definitely not going to be your mom and dad's sushi restaurant," he said. "This is going to be Tokyo 2050, not Kyoto 1950." Moore expects construction to begin soon and take about five months to complete.

Ringing Up

Beverly Hills shops continue to ring up strong sales.

A survey of retailers by the Beverly Hills Chamber of Commerce found 65 percent of posted better revenues during the first quarter of 2004 than in the first three months a year ago.

On average, sales increased by 15 percent compared to the year-earlier period, and 43 percent of retailers reported better sales than the fourth quarter 2003, according to the poll of 900 downtown retailers.

Thomas J. Blumenthal, president and chief executive of TBJ Geary's LLC, operator of the venerable Geary's shop on Beverly Boulevard, said first quarter sales were well beyond the company's expectations.

"We are exceeding our plans," he said. "We had a tremendous Christmas season and it spilled into the first quarter. We are very optimistic about this year."

The results are in line with a national trend. The National Retail Federation reported recently that first-quarter sales were 12 percent higher than the January-March quarter in 2003.

Staff reporter Andy Fixmer can be reached at [phone], ext. 263, or at [e-mail].