Biz’s building blocks

Mayor Riordan works to create jobs in Hollywood

Dramatic new soundstages rise along Rosecrans Avenue in Manhattan Beach. Multimedia firms occupy lofts in Culver City. Post-production houses move into trendy digs in Santa Monica.

All but overshadowed in the 1990s production boom has been the place where it began: Hollywood.

But after several years of work, dozens of business owners and city officials are poised to create a media district in the heart of Hollywood, an area that had until recently gained a reputation for car theft and graffiti rather than movie and TV production.

A drive is underway to create a so-called “business improvement district,” a 40-square-block area roughly bounded by Santa Monica Boulevard to the north, Melrose Avenue to the south, Vine Street to the east and Highland Avenue to the west.

The creation of the district has been a cornerstone of Mayor Riordan’s efforts to make the city a multimedia hub, whether through the creation of new tax incentives for multimedia firms, easing of zoning restrictions for entertainment companies in commercial areas, or offering incentives for businesses moving into Venice or Playa Vista.

It has not been until the last few years that media attention has turned to development in Hollywood. Even then, much of the publicity has been focused upon Hollywood Boulevard.

“It’s much bigger than that,” says Rocky Delgadillo, Riordan’s deputy mayor overseeing economic development. “Unless you have people there every Friday taking home their paychecks, you will not have an integrated, coordinated redevelopment.”

Leaders of the media district effort recently cleared a major hurdle after they collected more than 50% of the signatures of landlords, necessary to prove that there is enough interest and unity in creating such an area. If approved by the Los Angeles City Council and a mail-in vote of landlords in the area, the new district could go into effect early next year.

Property owners would get new annual assessments — ranging from $75 to $100,000 — to fund a $964,231 budget for new private security (including bike patrol officers), street beautification, maintenance and marketing, among other projects. The area includes 191 property owners, about one-third of them media firms, one-third retail outlets and one-third service industries.

“A lot of the media firms already are on the cutting edge, from a technical standpoint,” says Helmi Hisserich, senior business development representative in the mayor’s office. “What the new district does is focus on the quality of life in the area.” (In the drive to gain signatures, Riordan and Councilwoman Jackie Goldberg have called some businesses to sign on to the district plan).

Uncertainties lie ahead. There are new worries about a slowdown in production — one that could have Hollywood firms in stiffer competition with Santa Monica or Culver City facilities. The area will continue to suffer from a parking crunch, although money from the new media district will be used to study what to do about it.

Part of the problem in attracting media businesses to Hollywood has been a perception that the area is unsafe at night. Until recently, Delgadillo says, many firms had the attitude of “Yes, we can get [leases] for half the price, but we don’t want to move to Hollywood.”

But the area has recently seen a wave of new construction, primarily expansion of existing studios and post houses. Among them: Kodak and Sound Deluxe. Pacific Title Mirage recently moved from the Wilshire district to new space on Gower Street.

That’s a far cry from the early 1980s, when owners either had empty lots or were considering offers to raze their buildings and build apartments and condos.

“It’s changing, but it takes time,” says Tim Mahoney, president of Hollywood Center Studios.

Hollywood Center recently completed two new soundstages and additional office space, part of $14 million in improvements to its lot. And while three commercial production houses left the studio for the Westside last year, three commercial firms have signed on so far in 1998. Nearby car break-ins and petty thefts are down, along with graffiti and other crime, Mahoney notes.

Albert Sweet Development Co. is spending $1.5 million to convert a 50,000-square-foot warehouse at 1024 N. Orange Dr. into loft space for creative firms. “Now I get calls frequently from firms on the Westside, inquiring about space,” says Julie Kleinick, director of acquisitions and leasing for Albert Sweet, which owns about 300,000 square feet of space in the proposed media district area.

“The area already has an identity, but the [media district] will sort of show that to the outside world,” she says. It will reverse the perception of decline that we’ve had for the past few years.”

Industrial lease rates are running at $1.00 to $1.50 per square foot, triple net. That’s about 20% to 30% higher than a year ago, though still much less than the rate commanded by landlords in Santa Monica, according to Loralie Ogden, senior associate at CB Richard Ellis.

Hollywood boosters say that the biggest hurdles may have been passed, that the revival of the area has moved beyond meet and greet sessions to the sight of bricks and mortar — a big step after years of false starts.

“I would say that it is well beyond that,” Delgadillo says. “Some people would call that an overstatement. I think it is an understatement.”

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