"Nah, I think it should stay though, for the entertainment, for the people to still go in and enjoy themselves," said Phoenix resident Ronald Brown.
The development plan includes covering three sides of the hotel with digital advertising displays, lighting up much of the building. The city would share in the revenue.
Many residents say it would have major impact on the surrounding neighborhoods.
"I don't like it because of the extra traffic," said West Hollywood resident Dolores Nash. "It's so hard to get out onto the streets, into the traffic."
Nash says she's heard two versions of what may happen to the House of Blues: it could be demolished, or incorporated into the new complex.
In a statement, Live Nation, the company that operates the House of Blues, said: "We have a lease, which with renewal rights, goes through 2025, and we plan on continuing our operations at the venue," wrote Liz Morentin, spokesperson for Live Nation.
The city of West Hollywood said the long-term contract was a key factor in reaching the deal: "The city recognizes that the developer and club operator have a private contractual agreement and this was considered in the approvals given last night," said West Hollywood Deputy City Manager Anne McIntosh in a statement.
Residents say it certainly appears the Sunsets Strip will soon be changing.
"Maybe they're going to do like a mini-Las Vegas Strip right, and make Sunset Strip a real strip, like it is in Vegas, with the hotels," said L.A. resident Craig Braun.
The city says that demolition won't begin for at least a year, but the agreement actually gives the developer a 10-year window to begin that construction.