Developer Wins Approval to Raze Decrepit Hotel : Demolition: The Redevelopment Agency’s turnaround improves his chances of obtaining a loan for a supermarket and low-cost senior housing on the site.

HOLLYWOOD â€”  Reversing its decision of last week, the board of the Los Angeles Community Redevelopment Agency voted Monday to allow a developer to tear down a boarded-up hotel in the hopes of improving his chances of a loan to build a supermarket and a low-cost senior housing complex at the crime-plagued corner of Hollywood Boulevard and Western Avenue.

On Sept. 17, the board ruled that demolition of the Hotel Rector would have to wait until financing was in hand for the Hollywest project proposed by developer Ira Smedra. Otherwise, members said, removal of the hotel could amount to a permanent loss of low-cost housing in the area if the project doesn’t get off the ground. The Rector has been closed for three years.

But at a special meeting called by agency Chairman Jim Wood, who missed the previous vote, the board heeded his call to delete the financing condition from its approval of an environmental impact report for Hollywest.

“I believe we have to make a positive statement of assisting the developer,� Wood said. The action came after Smedra said bankers had made it clear that no money would be available as long as the building remains in place.

Helped by $5 million in redevelopment funds, Smedra said he has already put a like amount of his own money into acquiring the site and preparing for work to begin.

Despite its reputation as a haven for transients, prostitutes and drug dealers, the corner amounts to “an opportunity to put a good project in a spot that sorely needs it,� Smedra said.

The reversal was also supported by Councilman Michael Woo. His deputy, Diana Brueggemann, hailed the prospect of replacing the earthquake-damaged Rector’s 72 decrepit rooms with three times as many housing units.

“The benefit to society is great in terms of getting rid of blight in the neighborhood,� she said.

She cited a letter from Capt. John L. Higgins, commander of the LAPD’s Hollywood area, who called for the hotel to be demolished as soon as possible in the interest of public safety.

“There is a long history of police problems, drug dealing and prostitution connected with this building,� Higgins said. Two homeowner groups from the nearby Hollywood Hills also called for quick demolition.

Although the Sept. 17 vote was 4 to 0 with one abstention to block the demolition, Wood’s return and the arrival of new board member Christine Essel, a Paramount Pictures executive and Hollywood resident, helped turned things around in the final 5-2 tally.

Pastor Thomas Kilgore Jr. changed his vote after Smedra assured him that three supermarket chains were interested in moving into the project.

Frank Kuwahara, a retired flower industry executive who also voted for the financing requirement, said he now thinks that it would be impossible to keep troublemakers out of the boarded-up building, which the environmental impact report found to be of little historic significance.

But Carlyle W. Hall Jr., an attorney, said he was responding to the findings of the housing committee of Woo’s Hollywood community advisory council when he voted to keep the building standing for possible rehabilitation.

Although he likes Smedra’s proposal, he said, there is no guarantee that it will be built, especially since more ambitious proposals in more attractive areas of Hollywood have failed to find financing.

“I was persuaded that it’s a good idea not to allow an affordable housing resource to be pulled down when you don’t have a project, because if the project goes belly up you’ve lost the resource,� Hall said.