Copy of 733474-01-02-1685772508559
LVMH has been one of the biggest investors and property boosters in Beverly Hills, leasing or owning 15 stores for its collection of brands around Rodeo Drive. Image Credit: AFP

California: Rodeo Drive’s storefront windows display the world’s most expensive labels: Gucci handbags, Prada slingback pumps, Chanel perfumes.

It would seem like the perfect location for Bernard Arnault’s exclusive Cheval Blanc hotel. But a majority of voters in Beverly Hills disagreed.

They rejected two ballot measures needed for final approval of the ultra-luxury boutique hotel by LVMH Moet Hennessy Louis Vuitton SE, the firm founded by Arnault, the world’s second-richest man.

Read more

The referendums trailed by about 80 ballots, or a 1 percentage point margin, according to a final tally released Friday. LVMH has said it will give up on the project once voters opposed it. Jessica Miller, a spokesperson, declined to provide further comment Friday.

The vote revealed a deep rift in the 6-square-mile community, pitting residents eager for the city to earn more revenue and prestige against those who fear the community is being overrun by development. The results defy the Hollywood image of Beverly Hills as an ultra-rich enclave of opulent mansions and fancy cars.

Darian Bojeaux, a lawyer who headed a group called Residents Against Overdevelopment that opposed the hotel, said Beverly Hills is “misunderstood” and that it actually has a quaint village feel.

“We’re not all a bunch of creeps that are just into diamonds and Gucci bags,” said Bojeaux, a 38-year resident. “A lot of us love the quality of life and the beauty of the city. We put that over a brand.”

Manijeh Messa, manager of Bijan, a men’s appointment-only store on Rodeo Drive, expressed shock at the outcome.

“They live in the best place in the world and drive Bentleys and Rolls Royces and still say no,” Messa said.

Jay Luchs, a commercial real estate agent who leases and sells stores on the strip, called voters “bitter and angry” for opposing the Cheval Blanc, which has only a handful of other locations globally, including in Paris where room rates start at 2,400 euros ($2,573).

“Other cities would’ve died to have this,” Luchs said. “It’s a bad message to send to people who want to do business in Beverly Hills.”

This isn’t the first time Beverly Hills voters rejected a hotel. In 2016, they spurned a proposal for a 26-floor tower next to the fabled Beverly Hilton, which has hosted the Golden Globes ceremony for half a century.

LVMH has been one of the biggest investors and property boosters in Beverly Hills, leasing or owning 15 stores for its collection of brands around Rodeo Drive. The proposed hotel would have generated $800 million in revenue for the city over the next 30 years, according to an analysis for the ballot.

More than half of city revenue comes from sales, hotel and business taxes, supporting police, fire and landscaping that contributes to Beverly Hills’ safe and small-town atmosphere. Property taxes account for a third of the city’s income, where the median home price is $6.4 million, according to Redfin data.

Copy of 733453-01-02-1685772513707
People walk past the site of the proposed Cheval Blanc Hotel from LVMH Moet Hennessy Louis Vuitton, on Rodeo Drive in Beverly Hills, California, on May 23, 2023. The group LVMH headed by Bernard Arnault, the world's largest fortune, had chosen Beverly Hills, the wealthy neighbor of Los Angeles, to establish its Cheval Blanc brand in the United States, which has five luxury hotels, including in Paris, Courchevel and Saint-Barth. Beverly Hills residents voted May 23, 2023, on two proposals to block the luxury hotel project in the current form Referendums B and C. (Photo by Patrick T. Fallon / AFP) Image Credit: AFP

Arnault’s firm spent more than $400 million assembling the 1.28 acre (0.52 hectare) property, according to Luchs. He brokered the biggest piece of the project, LVMH’s $245 million purchase in 2018 of a former Brooks Brothers store at the corner of Rodeo and Santa Monica Boulevard.

The hotel faced opposition from several groups with a variety of grievances. A hospitality workers’ union petitioned for the signatures to put the referendum on the ballot, after the city council approved the hotel 4-1. Unite Here Local 11 said it wanted more affordable housing in the project.

Other critics feared more outsiders and tourists, especially with a new subway stop opening near Rodeo Drive in 2025. And some worried about crime, like the 2021 daytime shooting at a restaurant where robbers took a man’s $500,000 watch.

John Mirisch, the only council member who voted no, penned a full-page editorial for the Beverly Hills Weekly that listed 10 reasons to oppose the project, including traffic congestion.

“It’s a sign that many in our community didn’t allow themselves to be manipulated and that they saw through and rejected the arrogance and self-entitlement that fueled this project,” Mirisch said in an email.

Bojeaux said her main objection was the proposed hotel’s height of nine stories in a low-rise area. It would cast a shadow over Rodeo Drive, she said.

“There were so many reasons to vote no “- something for everyone,” she said. “I’m not saying all people in designer clothes are bad.”