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Aroma in Koreatown 

Builder sniffs out city aid for private club

Wednesday, Jan 27 1999
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Photo by Slobodan Dimitrov

The ground has barely been broken for a new, $24 million sports-and-entertainment complex in Koreatown, but the project — and its proposed city-assisted financing — has already generated rancor in the community. The controversy centers on the impending gift of public funds to a private club, and also has brought to the surface tensions about Korean domination of the neighborhood economy.

The five-story facility, based on a model popular in Asia, will include a basement food court and sports bar, and two floors of retail shops topped by a three-story health club, which will offer saunas, hot tubs, a gym and a swimming pool. The rear of the building will house an outdoor golf driving range. While the bottom three floors will be open to the general public, the health club will be accessible only to members paying a projected $150 per month. Going up at the corner of Wilshire Boulevard and Serrano Avenue, the complex will bear the curious name Aroma Sporex, which, in the words of its developer, refers to "the scent of a healthy, healthy person."

Project backers include Mayor Richard Riordan and 10th District Councilman Nate Holden, who, between them, probably never met a development they didn’t like. But beyond merely cheerleading for Aroma Sporex, they’ve sought to secure the developer a below-market-rate loan of $5 million in federal funds — the maximum allowed — through the city’s Community Development Department (CDD). They claim Aroma Sporex will create more than 200 jobs and attract professionals to the fading office buildings that line the Wilshire corridor. "We want to bring back what Wilshire Boulevard used to be," says Steve Kim of Holden’s office.

But the project encountered resistance during the zoning process last year and, more recently, from the Wilshire Center Community Watch, a small group created specifically to fight Aroma Sporex. In a campaign tinged with jingoism — the letterhead sports an American flag, and Robert Swanson, the group’s secretary, complains that the developer’s profits "would be going to Seoul" — the group has gathered more than 500 letters signed by residents opposed to the project.

"I can’t see why they need any public money," Swanson contends, adding that few residents of the low-income area will be able to afford the club’s fees. His main issue is the subsidy, but other opponents fault the project’s multiple liquor licenses and claim the massage services may promote prostitution.

Swanson’s motivations are somewhat murky — he does not live in the area and has not been involved in local politics before — but confederates such as Loretta Jones live close by. Jones insists that "it’s not a race issue" and says the group includes Koreans. But she also complains that African-American businesses typically find it more difficult to obtain city assistance and fears Aroma Sporex would not welcome non-Koreans because similar clubs in the area "are not open to us, the community folks. They’re Korean clubs."

Project developer Edward Ahn denies that anyone would be excluded, but no walk-in customers would be allowed at the health club. And Ahn doesn’t exactly make a strong case for city assistance. He insists the project will go up with or without the CDD’s $5 million. Ahn is CEO of Hanil Development Inc., an American subsidiary of the financially troubled South Korean superconglomerate Hanil Group. Korean investment in the area has plummeted over the past year due to the Asian economic crisis, but while Hanil liquidated holdings elsewhere, it continues to back this project.

"They’re just throwing a small rock against the ocean," Ahn says of the opposition.

This could be a developer’s bravado — earthmovers at the site have done little work in recent weeks — but if he’s telling the truth, it only raises more questions about the necessity of city aid.

The project has received unwavering support from Mayor Riordan, whose officeholder account in 1998 benefited from a $1,000 contribution from the project architect. For his part, Holden has received more than $4,000 in campaign contributions from Ahn and his associates. Developers have long been staple contributors to Holden’s war chest, and his push for development über alles has well rewarded their support.

Holden’s office did not know, however, until being told by the Weekly, that Aroma Sporex would be exclusively private. "We wouldn’t stand for that," said Holden aide Steve Kim. "We’re not going to have a Friar’s Club where only the upscale people can come . . . That would be wrong." Indignation aside, Kim conceded this week that he could not say for certain if this new information would alter Holden’s position.

Riordan, who has belonged to some of the most exclusive clubs in town, has expressed no such misgivings. Both his office and Holden’s have characterized the opposition as routine and unremarkable. A Rior dan staffer alternately blamed criticism on Aroma’s competitors and one of Holden’s challengers in the upcoming council elections.

In November, Aroma Sporex’s proposal was evaluated by a council-appointed citizens’ review board that apparently shared some of Swanson’s concerns. They advised against funding because "residents from the affected neighborhood would not use the proposed facility due to prohibitive participation costs" and because whatever benefits the project created "were directed towards nonresident business interests without discernible positive outcomes for the surrounding community."

If the CDD approves the loan, it will still have a few hurdles to jump before it faces a vote in the City Council. But it’s unlikely that the review board’s misgivings — or anyone else’s — will stand in its way before then. The CDD will "certainly listen" to this input, says financial analyst Ernest Tidwell, but "we make our decisions based on financial underwriting, not so much on public opinion."

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