Voters in Beverly Hills, the epitome of wealth and luxurious, have narrowly rejected a proposal by Bernard Arnault’s LVMH to construct an ultra-exclusive lodge on Rodeo Drive.
The stunning outcome late on Friday was a setback for Arnault, the world’s richest individual, who had chosen Beverly Hills as the primary US location for his luxurious lodge group. LVMH, which just lately grew to become the primary European firm to achieve a $500bn market valuation, splashed out almost $2.9mn on its marketing campaign to realize approval within the poll.
The Cheval Blanc lodge proposal was accepted by metropolis officers final yr. However it bumped into opposition by a strong union that represents 32,000 lodge and different hospitality staff in southern California. The group gathered sufficient signatures to set off a referendum election to resolve whether or not the undertaking ought to go forward.
The union argued that the event settlement didn’t put aside provisions for reasonably priced housing in Beverly Hills, the place few lodge or home staff can afford to stay. Beverly Hills, an unbiased metropolis of about 32,000 folks inside LA county, has a median family revenue of greater than $100,000.
Opposition additionally got here from a gaggle of residents who criticised the dimensions of the deliberate lodge, saying it could tower over neighbouring buildings and worsen site visitors congestion.
“We oppose the monolithic Cheval Blanc Hotel project because it is just too big and tall for our village,” mentioned leaflets distributed by Residents Against Overdevelopment, which mentioned its mission was to “preserve the quality of life in Beverly Hills”.
LVMH argued that the lodge growth would generate about $780mn over the following 30 years in tax revenues for Beverly Hills. As a part of the deal, the corporate additionally agreed to contribute $26mn to town’s price range and one other $2mn earmarked for arts and tradition.
“I’m devastated,” mentioned Andy Licht, who oversaw the approval of the Cheval Blanc undertaking as chair of the Beverly Hills planning fee. “It’s a horrible decision.”
A number of votes remained to be counted, however the group backed by LVMH to marketing campaign for approval acknowledged late on Friday that it was unlikely to move.
“If the final vote count confirms the voters’ rejection of our project, we will respect the outcome, and will not bring the hotel project back in any form,” mentioned an announcement launched by the group, the Yes on B&C Campaign, so named for the letters on the poll proposal.
Designed by the New York architect Peter Marino, who additionally oversaw LVMH’s lavish refurbishment of jeweller Tiffany & Co’s flagship retailer in New York, the Beverly Hills Cheval Blanc represented the group’s newest growth into the posh hospitality business. Plans for the 115-room lodge included area for a 500-member non-public membership, together with high-end restaurant and retail retailers.
LVMH is predicted to retain possession of the property and has the choice to develop it for different makes use of, together with retail or workplace area.
Still, it denies the corporate an opportunity to capitalise on the rising urge for food for high-end hospitality and experiences with a undertaking in Beverly Hills. LVMH and its rivals have poured cash into the hospitality sector lately, and analysts count on it will likely be one of many fastest-growing areas in luxurious within the coming years.
In 2022, the posh hospitality market greater than doubled in worth year-on-year to €191bn regardless of remaining under its pre-pandemic peak, in line with consultancy Bain.
Arnault established the primary of the Cheval Blanc lodges within the ski resort of Courchevel in 2006. The high-end chain has now grown to incorporate areas from Paris to the Maldives. In 2018, the group introduced it had purchased hospitality group Belmond for $3.2bn, which got here with a luxurious journey portfolio starting from high-end lodges to the Orient Express prepare service.
The deal bolstered LVMH’s hospitality portfolio that already included Cheval Blanc and Bulgari Hotels and Resorts. The section that features LVMH’s hospitality companies accounted for less than a small proportion of the group’s file €79bn in revenues final yr, however after taking successful throughout lockdowns it has rebounded strongly for the reason that pandemic.
Source: www.ft.com