Business Maverick

Business Maverick

World’s Richest Man Down But Not Out in Beverly Hills Hotel Plan

World’s Richest Man Down But Not Out in Beverly Hills Hotel Plan
A 'Wanted' poster featuring an image of Bernard Arnault, billionaire and chairman of LVMH Moet Hennessy Louis Vuitton SE, on a tree during a demonstration during a nationwide strike in Paris, France, on Tuesday, Oct. 18, 2022. French rail, energy and other key workers are striking to demand a bigger share of corporate profits, raising pressure on President Emmanuel Macron to take further steps to ease the impact of surging inflation. Photographer: Benjamin Girette/Bloomberg via Getty Images

Bernauld Arnault is having a bad week.Voters in Beverly Hills, synonymous with wealth and extravagance, are pushing back against the city council’s approval of the first US Cheval Blanc, a high-end hotel backed by the world’s richest man. Preliminary returns show opponents with a slim 60-vote or one percentage point margin.

It comes as luxury stocks are getting hammered, with Arnault’s LVMH Moet Hennessy Louis Vuitton SE falling about 7% over two days and reducing his net worth to about $189.5 billion, according to the Bloomberg Billionaires Index.

If the results hold it would scuttle Arnault’s plan to build a boutique hotel and private members’ club on Rodeo Drive. The French titan already has a commanding presence on the fabled shopping strip where his luxury empire owns or leases 15 stores for brands such as Dior, Fendi and Tiffany & Co.

“Outcome not clear,” Randy James, a representative of the campaign favoring the hotel, said in a message Wednesday. “Extremely close with more votes still to count.”

A majority of voters are required to approve two measures on the ballot — one related to zoning changes and another on the deal terms. A preliminary tally released Tuesday evening after polls closed showed 50.5% opposed to both.

Supporters of the hotel project said occupancy taxes and other payments would generate about $800 million over 30 years for Beverly Hills to pay for schools, parks, libraries and other city services while also reviving a stretch of Rodeo Drive that has languished.

The proposed nine-floor hotel with as many as 115 rooms designed by architect Peter Marino would replace several buildings, including sites formerly occupied by a Brooks Brothers and the Paley Center for Media, at the intersection of Rodeo, Santa Monica Boulevard and North Beverly Drive.

Campaign groups favoring the hotel raised more than $3 million, about 10 times the amount reported by opponents, according to filings with the city of Beverly Hills.

Critics, including the hospitality workers’ union that sponsored the petition drive that led to the referendum, pushed back against the city’s agreement to ease restrictions on the project’s height and floor-area ratio. They argued the building would obstruct views and contribute to traffic congestion.

They also said the city should have required Cheval Blanc to include affordable housing in the permitting process.

“The voters are saying they don’t like to be manipulated or hustled,” John Mirisch, the lone city council member on the five-member board who opposed the project, said in an email. “They may also think that the deal is a bad one.”

Read More: LVMH Billionaire Arnault Says He’s Confident About US Economy

There are currently Cheval Blanc locations in Paris, St. Tropez and Courchevel, France and the resort islands of St. Barts and Randheli. Nightly rates at the Paris hotel, which has 72 suites overlooking the Seine river, start at 2,400 euros ($2,582), according to its website.

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