Prod'n overflow spawns facils in Manhattan Beach, Long Beach

The Manhattan Beach area’s claim to Hollywood fame has been on the order of the occasional location shoot for shows like “Beverly Hills, 90210.” Or the video store where Quentin Tarantino once clerked. Or the real-life workplace of one-half of the fabled Falcon and the Snowman.

Now L.A.’s South Bay — for many in the industry, a hard-to-define region south of the airport — is getting its own studio lot, the Manhattan Beach Studios.

It will be a big departure for the area, once a center of Southern California’s aerospace business and, throughout much of the 1990s, among the hardest hit by the defense industry’s decline.

Realtors, developers and civic officials are pinning hopes on the prospect that the studio will mark a turnaround for the area, where housing prices are only now inching upward and the commercial market is slowly emerging from years in the doldrums.

That would be coupled with existing production in Long Beach, where Warner Bros. has a two-year lease to rent the dome that formerly housed the Spruce Goose, and where the studio already has shot “Batman Forever” and “Batman and Robin.”

And in Playa Vista, studios for several years have been renting former aircraft hangars to shoot pics such as the Fox feature “Titanic,” which partially shot in Playa, and Disney’s “George of the Jungle.” Production would increase considerably if DreamWorks goes forward with its plans to locate in Playa Vista, plans which have been delayed by disputes with the developer, Maguire Partners, as well as long-standing debt on the massive project, which will combine studio facilities and residential development.

Manhattan project ambitious

One thing is sure: The $77 million Manhattan Beach Studios, scheduled to break ground this summer, will beat DreamWorks to the punch. To be built on 22 acres of land formerly owned by TRW, it ultimately will include 14 soundstages, with eight scheduled to be built in its first phase. There also will be 100,000 square feet of office and support space in its first phase, scheduled to be completed in time for the start of the 1998 fall TV season.

The project was announced in November, in the midst of a boom in production in Los Angeles and a shortage of soundstage space. Suddenly studios were having to pay top dollar for production facilities.

But Manhattan Beach Studios — being built in a partnership between Roy E. Disney’s Shamrock Holdings Inc. and CFN/Flesch & Neuhauser LLC — seemingly stretches the boundaries of the industry. Despite a recent production boom that has overextended L.A. facilities well into 1998, there are doubts about how full the soundstages will be if the studios were to scale back production.

Studios harbor own expansion plans

More important, the major studios already have their own expansion plans on the drawing boards, which will put much of their production capability under their own control. NBC, for instance, recently received approval for its expansion plans, which include additional soundstages on its Burbank lot. And plans are afoot for stages in much closer locales like Santa Monica and even Hollywood.

“For people in our business, getting them to leave the Valley is a trek,” says Jim Thompson, whose Van Nuys real estate brokerage company, Real to Reel, specializes in the leasing of production space.

His firm has leased warehouse space in far-off places like San Pedro and Commerce, for productions such as “Waterworld” and “The Rocketeer,” but the facilities were not in continued use.

“Productions are back in Los Angeles, but the market is still being tested,” he says.

Easy access

But developers of the Manhattan Beach Studios dispute the notion that they are building in the hinterlands. Rather, they point out, the studio’s location on Rosecrans Avenue has easy access to the San Diego Freeway. In fact, the stages will be just 10 minutes from Playa Vista, and 15 to 20 minutes from Sony Studios in Culver City.

“We are a lot closer than a lot of areas,” says Ronald Flesch of CFN/Flesch & Neuhauser. “We are just as quick to get to as the Valley, if not a lot quicker.”

And while there may be a down cycle in the industry, the developers say they will have an advantage because they have newer, state-of-the-art facilities. “We become a real competitive item,” Flesch says.

Developers will not name prospective tenants until they have signed leases, although in the past they have said they see TV production and independent films producers as their major markets.

Filling aerospace void

Either way, the construction of soundstages may be nothing less than a shot in the arm for the South Bay, roughly defined as the cities that straddle the coast from south of the airport to Long Beach.

The South Bay grew up with the boom in the aerospace business, as a center for World War II production of aircraft, contractors for the Apollo space program and the 1980s buildup in defense, including President Reagan’s dream of a so-called “Star Wars” defense system.

But the go-go era came crashing to a halt with the end of the Cold War and the cuts in the defense budget. Thousands of workers have been laid off from firms such as Hughes, Northrop Grumman Corp. and TRW, and the region has struggled for a way to replace those lost jobs. The Manhattan Beach Studios, in fact, would have been future space for TRW, perhaps for research on space satellites, had defense spending continued as it did in the 1980s.

Vacancy rates high

Office vacancy rates remain the highest in the region. The South Bay’s vacancy rate was 20.9% in the first quarter of this year, compared to 16.8% for all of Los Angeles County, according to Grubb & Ellis Co. In the Manhattan Beach and El Segundo area, the vacancy rate was 18.2%, a slight drop from 20.6% the previous quarter.

Local leaders have spent much of the 1990s looking for industries to replace the lost aerospace work. One plan would have moved L.A.’s garment district to a new campus in Hawthorne, near the Manhattan Beach Studios. It fizzled.

But entertainment already has helped bail out some businesses along Rosecrans Avenue. Continental Development Corp. was stuck with vacant office buildings along Rosecrans that once catered to the likes of Hughes and TRW. In the past two years, it has changed its strategy, tearing down an office building and replacing it with a Pacific Theatres multiplex, the first step in creating a new entertainment district in the area.

Popular film locations

And producers already have looked to the region to shoot countless movies and TV shows as well as commercials in production facilities called the South Bay Studios. For years, “Baywatch” has used a converted warehouse near the Los Angeles Airport for its interior scenes.

But there has been nothing on the scale of what is planned for Playa Vista and the Manhattan Beach Studios. And Realtors hope that both projects will in turn spur home sales and other office leases.

Already, beach cities like Manhattan Beach, Redondo Beach and Hermosa Beach boast of a large number of residents who work in the industry, even with long commutes.

History, however, may teach them not to go overboard with Hollywood. Back in the late 1920s, when the industry was on the cusp of its Golden Age, a developer set out to create a posh new community called Hollywood Riviera, marketing it as a star getaway between Redondo Beach and Torrance. The area still exists as a more modest community of ranch-style homes. The developer went bankrupt.

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