Is a billion dollars of prime San Fernando Valley real estate an asset or an albatross?
When GE bought Universal in 2003, it acquired not only a studio but also a lot of land: 415 acres to be exact. But what do with it remains a vexing problem.
GE sold the office tower at 10 Universal City Plaza for $190 million and collected $70 million more for the land it had leased to the Universal Sheraton and Hilton hotels.
As for the remaining 391 acres, GE last week rolled out a master plan that would involve $3 billion worth of new construction, including a 2,900-unit residential complex and an office campus.
But the last time there was a U proposal for an ambitious back lot building project, introduced in 1995 when the studio was owned by Seagrams, community activists shouted it down.
And therein lies U’s land conundrum: While other studios sold off their land holdings over the decades, the lot assembled by Carl Laemmle and then Lew Wasserman has survived largely intact, and benefited from L.A.’s rising property values.
The L.A. County Assessor’s office values the U land and improvements for tax purposes at well past $1 billion.
But by holding onto the property for so long, the studio has seen the surrounding Valley become densely developed.
That may be good for property values, but it has also brought the biggest obstacle to U developing its own holdings: neighbors, who do not think highly of any plans that would put more cars on the already clogged Valley roads.