Developer Makes NIMBYs Shareholders

<p>The developer of a new condominium tower in Los Angeles gave local homeowner groups an equity interest in a future residential project in exchange for project approval.</p>
October 18, 2006, 7am PDT | Christian Madera | @cpmadera
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"Developers often work out monetary settlements with associations to address the concerns of local homeowners. And in exchange for fixed payouts, the groups agree not to oppose a development."

Yet new twist in this practice is the case of New York-based Related Companies, which is developing a new condominium tower on the former site of a St. Regis Hotel in Century City, an area of West Los Angeles near Beverly Hills. The developer struck a deal with nearby homeowner groups, promising them an equity interest in another of the company's developments on the drawing board, given the neighbors a percentage of the income from the other condo project.

"Real estate industry professionals say that revenue generated by the nearby Century Woods Estates development – which has yet to move beyond the conceptual stage – would likely be quite a bit larger than a simple monetary settlement. It is unclear, however, how much money that would be.

'It is a gamble, but I would hope it would be in the many millions,' said Mike Eveloff, president of the Tract 7260 Association and a member of the coalition of homeowner associations that worked out the deal."

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Published on Monday, October 16, 2006 in Los Angeles Business Journal
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