Joel Silver’s Dream Venice Post Office Project Is Stalled and In Debt (EXCLUSIVE)

Politicos, business titans and stars gathered for a press gala in the fall of 2012 to hear the big news: Joel Silver would bring his movie company to Venice’s historic post office. To hear the producer and his backers talk, the move would unleash a creative renaissance for both Silver and the beach community.

“The man who brought us ‘The Matrix,’ ‘Lethal Weapon’ and ‘Predator’ will have an address that matches his grand imagination,” Los Angeles Mayor Antonio Villaraigosa proclaimed to a crowd that included actor Tobey Maguire and former Yahoo chief Terry Semel, his longtime pal from their days at Warner Bros. Silver pledged to “help change the paradigm of Hollywood,” by turning a refurbished Venice post office into a creative hub, a center for technological innovation and a meeting place for friends and neighbors.

Nearly two and a half years after that elaborate rollout, though, work on Silver’s ambitious new headquarters has stalled. The project has been beset by multiple design changes, unpaid bills and taxes that are past due,  interviews and public filings show. The future headquarters of Silver Pictures — covered in scaffolding and scarred by graffiti — appears nowhere near ready for its grand debut.

Silver’s development company, AG Media Properties, has defaulted on its property taxes and owes more than $98,000 in delinquent payments, records show. Thirteen contractors have filed liens on the property, saying that bills for their work — totaling $1,361,000 — were not paid, according to public filings.

Nine of those building contractors subsequently settled and removed their attachments to the property, but the largest, who worked on the building’s air conditioning system, still claims it is owed $720,000. The firm, Clay Dunn Enterprises, has gone to court, attempting to force a settlement or a foreclosure on the property.

The reopening of the charming WPA-era post office building — which was supposed to host classes, screenings and a signature mural on Venice history — is now almost a year behind schedule. Workers are seldom seen on the property, which is surrounded by a padlocked chain-link fence.

Neighbors complain that the local gem — which sits on a prominent traffic circle just blocks from the Venice boardwalk — has turned into an unsightly magnet for the homeless. “I would like to see it finished; a nice clean building with some commerce,” said Max Caraisco, a bartender who lives nearby. “Now it’s just an eyesore. I’m sick of it.”

Silver’s office referred inquiries to his publicist, who declined to comment. But a legal filing in one court case related to the stalled project suggests that the producer will claim that any non-payment was related to failures on the part of contractors.

Silver made his mark as a high-flying producer who for years worked out of opulent offices on the Warner Bros. lot in Burbank. His run of winning films allowed him to secure a highly unusual deal, in which Warner loaned him advances based on a percentage of the box office the pics were expected to earn.

But the studio ended its quarter-century relationship with Silver in 2012 as it moved to rein in costs. Warner Bros. paid Silver around $30 million for the rights to more than 30 of the movies he had produced.

Silver gave up not only his comfortable perch on the Warner Bros. lot, but studio funding for his staff of 20, which included a personal driver and projectionist for his home theater. There were reports that the parting was acrimonious.

In 2012, Silver locked down a five-year distribution deal with Universal in which the studio was to release up to nine movies. Under the terms of the arrangement, Silver finances the films himself.

On announcing his move to Venice, Silver quipped of his departure from Warner Bros.’ Burbank campus: “It was kind of nice to get voted off the island.”

But, with franchises like ‘The Matrix’ and ‘Lethal Weapon’ now well in the rearview mirror, Silver has struggled to maintain anything close to his once-outsized footprint in Hollywood. A friend recalls seeing him recently at one of the studios, where he had gone to pitch an idea for a new television concept.

Silver’s most recent film, “The Gunman,” starring Sean Penn, debuted last weekend with just $6.4 million worldwide.

Two of the last six films Silver was attached to as producer or executive producer didn’t even earn back their production costs: “The Apparition” ($4.9 domestic box office/$17 million budget) and “Getaway” ($10.5 million box office/$18 million budget). “Veronica Mars” ($3.3 million box office/$6 million budget) earned additional proceeds on VOD.

Other laggards in recent times have been the 2013 Sylvester Stallone-starrer “Bullet to the Head,” with $9.5 million in domestic receipts, and the 2014 thriller “The Loft,” with a $6 million take. Only last year’s Liam Neeson-vehicle “Non-Stop,” which Silver produced, bucked the recent anemic trend. It brought home $223 million worldwide on a budget of about $50 million.

There are no public reports on the finances of the privately held Silver Pictures, but the company has lost some of its top executive talent in recent years. Steve Richards departed in January after nearly two decades with Silver, most recently as its co-president. Two other top executives — Andrew Rona and Alex Heineman — left the company at the start of 2014.

The proposed move to Venice featured a couple of Joel Silver signature touches — going big and going old, in the historic preservation sense. “He is not just going to rent an office somewhere,” said a fellow producer, who asked not to be named in order to preserve his relationship with Silver. “He is going to build this great big thing. It’s the ‘Barnum & Bailey’ of Joel.”

The 62-year-old producer previously owned the Frank Lloyd Wright-designed Storer house in the Hollywood Hills. And he spent years and reportedly millions of dollars painstakingly refurbishing another Wright design — a historic plantation house in South Carolina. Friends recall the producer once spending $250,000 to entertain family and friends at a Thanksgiving party on the plantation.

Silver said he hoped to continue his historical preservation legacy at the Venice post office, a 1939-vintage creation beloved in the beach community. An interior mural depicts Abbot Kinney’s founding of the beach town, and the producer rhapsodized about the attention he would put into restoring the artwork.

At the kickoff event in September 2012, Silver joked about his go-go attitude. He introduced company co-president Richards, saying he was the one who “always has the problem of figuring out our financing.”

“Sometimes we move faster than our financing,” Silver said, to chuckles from the audience, “but that’s just the way we like to move.”

Just a few months later, in December of 2012, the project at 1601 Main Street in Venice was hit with the first in a series of claims by contractors who said they had not been paid. All Clear Environmental of Studio City said it was owed $25,570 for removing lead-containing materials from the building. Such claims from a variety of other companies — for demolition, plumbing, drywall, ornamental metal work and other services — continued to pile up over the next year.

While the general contractor on the project, the J.D. Group Inc., did not attach a payment claim to the property, the company’s lawyer said in a related lawsuit that delays in payment of more than $1.3 million for “materials supplied and/or work performed” had caused distress. The legal filing said the delays “have not only resulted in slowing of the progression of work at the subject premises, but also resulted in significant strain on J.D. Group, as well as various materials suppliers and subcontractors.”

The general contractor’s lawyer, Jason Turner, said that multiple design changes had contributed to the delay in the project. One of the most significant alterations involved reconfiguring the subterranean areas beneath the post office to deal with the high water table in the area.

Turner said there was a “strong probability” that all the issues surrounding the project eventually would be resolved. “But as far as when, or what it will look like at that point, I can’t say,” he said.

Liens remain in place for four contractors, with claims totaling $864,000, according to records at the county Recorder’s Office. The largest claim was filed by Clay Dunn Enterprises, the company hired to revamp the old post office’s heating and air conditioning systems.

The company claims it is owed nearly $720,000 and filed a lawsuit last May to foreclose, if it is not paid. That action ultimately could mean a forced sale of the property, with some of the proceeds going to fulfill the unpaid bill. Experts in such cases said that foreclosures rarely occur and that the matters are typically settled prior to trial.

Other companies that filed for non-payment declined to comment. The principals in one of those companies offered a possible reason for the silence: His firm had signed a non-disclosure agreement with Silver. The businessman offered his comments on the condition that he remain anonymous.

Silver’s attorney in the foreclosure case, Bess Blank, declined to comment. But a initial response filed by the producer last year claimed the contractors had failed to perform their work properly. The legal filing did not specify the nature of the alleged shortcomings.

Never one to be easily thwarted, Silver said when he launched the post office rehabilitation that he looked forward to the day when he would come to work there every day.

“I think this is going to be a new chapter for our company,” he said. “I think we can reinvent what we have done in a new way, in a new place.”

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