Threat of development casts a shadow over Hollywood mountain

The Hollywood sign may be the closest thing Los Angeles has to a signature landmark but now the mountaintop directly above the 50ft-high white letters faces the prospect of a multi-million dollar property development that is causing consternation among civic leaders and city residents.

It's a particularly ironic twist of fate. In a city that owes its growth and shape to rapacious property developers – as anyone who has seen Chinatown knows – the seemingly limitless desire to drown the landscape in concrete is now threatening an iconic piece of signage that itself started life as a giant advertisement for a proposed property development.

For years, the city has been eyeing the 138-acre parcel of land on top of Mount Lee, hoping that one day it can be annexed to Griffith Park, the vast stretch of public land next door. For at least the past 30 years, the Hollywood sign has been accepted as the very symbol of a metropolis otherwise bereft of major monuments.

But the current owners of the land, Fox River Financial Resources, have other ideas and have just offered to sell the parcel of land above the sign for $22m (£11m) – almost four times what the city was offering to pay for it. They envisage that it will be used either for one single spectacular home, with 360-degree views over the city and the Pacific Ocean, or a cluster of luxury houses.

The developers argue that the view of the Hollywood sign itself would be unchanged. But any edifice, however upmarket, would certainly mar the view of what is now a pristine mountainscape directly behind.

As one city councilman, Tom LaBonge, told the Los Angeles Times: "That mountain should not be cluttered. It's good for the psyche of Los Angeles."

The sign, erected in 1923, originally read "Hollywoodland" and was designed to advertise a new residential neighbourhood. Howard Hughes, who owned the land at one time, dreamed of building a house there for his lover, Ginger Rogers, but Rogers rejected the idea because she was afraid of being locked up like a bird in a cage.

The last four letters of the sign were removed in 1949 so the sign could symbolise the city and the movie industry. It fell into disrepair, losing the occasional letter here and there, and became a notorious site for suicides. It only began to be cared for like any other historic monument in the late 1970s.

Fox River bought the land from the Hughes estate in 2002 for $1.7m. The city has been raising money ever since to take it off the company's hands, but has only about $5m in the bank for now – about $1m short of its appraised value.

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