General Electric Co. executives have taken initial steps to sell nearly a third of the Universal Studios’ backlot, where a developer could build a large-scale residential complex.
GE, which bought the studio from Vivendi Universal SA in 2004, has hired a brokerage firm to market a roughly 150-acre site off Barham Boulevard on the studio backlot. Also, it has informed some neighbors that the land could be sold.
NBC Universal spokeswoman Cindy Gardner said the company is undergoing an internal “needs assessment” and hasn’t made a concrete decision about what to do with the property.
“We’ve hired advisors and we are in the process of assessing all of our options,” she said. “We are looking at every opportunity.”
While a deal is still under discussion, GE executives believe the site a hilly portion of the backlot can support a mixed-use development containing approximately 1,000 condominiums and townhomes, several sources said.
New roads would have to be constructed to access the development. Congested thoroughfares, especially Barham Boulevard and possibly Forest Lawn Drive, would have to be expanded to handle increased traffic.
The development would use a fraction of the site, leaving much of the acreage as open space. However, a developer would still have to purchase the entire parcel, which could fetch upwards of $300 million.
The brokerage firm on the deal, Jones Lang LaSalle, has been quietly marketing the parcel for about four months, and already several developers have expressed interest.
Discussions with at least one local developer, J.H. Snyder Co. LLC, have evolved to where GE’s attorneys at Latham & Watkins have made the firm sign a confidentiality agreement, sources said.
Jerry Snyder, the firm’s principal, declined comment.
Bill Witte, a division president and managing partner of developer Related Cos., said he has been advised of the availability of the Universal site but his firm hasn’t been asked to sign a confidentiality agreement.
Witte said even though any developer would likely face entrenched community opposition and a lengthy approvals process, a final project could be very lucrative. Average size condominiums in the project would likely sell for over $1 million.
“It’s a very good location,” Witte said. “Universal controls the only significant developable land in that area. It’s very valuable.”
Difficult project
Universal meets with area homeowners associations on a quarterly basis to keep them apprised of issues that may affect them and so far, reaction by homeowners has been mixed.
Pat Garner, founder of Toluca Lake Residents Association, said NBC Universal representatives had informed the neighborhood the studio is again considering development options. Seven years ago, Garner raised $75,000 to hire an attorney to block development at Universal. This time, however, he said things are more amicable.
“They could build a lot worse than a residential project up there,” he said. “Whatever they decide to do, the neighbors will take a close look at it.”
Paul Ramsey, the neighborhood council representative from Hollywood Knolls Community Club, which sits directly above Universal Studios, said a large residential development could put the area’s streets into gridlock.
When Hollywood Knolls residents leave their homes, they exit out Barham Boulevard. Ramsey said a residential project with potentially 1,000 units would add 50 percent more residents to the area. “I don’t see how the streets can handle that much more traffic,” he said.
Ramsey said his group has not been informed of the possible development. Even so, Ramsey said Hollywood Knolls homeowners have been expecting Universal Studios to propose a project for the site, once the studio stopped changing hands every couple years. “It doesn’t surprise me,” he said. “The handwriting has been on the wall for a while.”
Garner of Toluca Lake said the obvious concern with a residential development would be traffic. But he said more cars would be better than Universal building a destination resort, adding onto its theme park or expanding its sound stages.
“We get a lot of noise from those things,” he said. “They try to be respectful but when they’re filming a movie there’s always helicopters and explosions.”
Still, any development could face political obstacles, if only by virtue of jurisdictional issues.
Portions of the Universal lot are unincorporated and under the control of the Los Angeles County Board of Supervisors, and portions are within the City of Los Angeles. Approvals could be required from both jurisdictions.
County Supervisor Zev Yaroslavsky, whose district includes the studio, said he is aware that Universal is looking at its options on the whole property, but his office hadn’t been alerted to any specific plans. “Obviously development in and around Universal is highly sensitive,” he said.
Jane Galbraith, spokeswoman for City Councilman Tom LaBonge, whose 4th District includes the studio site, said the office is aware Universal is considering development options but hasn’t been told of a specific project.
Even then, Galbraith said LaBonge typically advises developers to first bring their plans before neighborhood groups for feedback. “We ask them to come back to us after that,” she said.
Studio development
The idea of developing the site first came up in 1997 when Universal Studios was owned by the Bronfman family.
Though the studio has not received entitlements, an environmental impact report has been completed. A developer could still use the existing environmental report, though some updates would probably be required.
However, the project was shelved when Paris-based Vivendi bought the studio. Now, under GE’s ownership, those same plans are being revived.
Historically, studios have sought to develop their backlots.
Century City was developed in the 1960s on the backlot of Fox Studios and about a decade later Metro-Goldwyn-Mayer sold its Culver City backlot, where a mix of residential development was built.
Universal Studios, which sits on 450 acres and has about 4 million square feet of various structures, also heavily developed its property. Aside from studios and office buildings, Universal built Universal Studios theme park and City Walk, a neon sign drenched retail promenade, in the 1980s.
Unlike the residential proposal, most of Universal’s developments have remained in the hands of the studio. The only properties on the lot that aren’t owned by NBC Universal are the Universal Hilton, the Universal Sheraton and an office building, 10 Universal City Plaza.
However, since GE purchased Universal and began combining the studio’s operations with those of NBC, the company has shown a willingness to sell off underused land.
Last year, GE sold off a parcel of the NBC Studios lot on Catalina Street in Burbank to an office developer, M. David Paul & Associates LLC. In previous years, the same developer had purchased excess land off the NBC lot for new Burbank office buildings, including The Pinnacle.
As GE has increasingly moved a large number of NBC personnel onto the Universal lot, the company has also begun looking at which NBC parcels could be developed. “In light of the integration, we are assessing all of our options,” said Gardner, the NBC Universal spokeswoman.
