Plans by developers to build as much as $1 billion worth of sound stages, office and retail space in North Hollywood have city officials extolling the benefits of redevelopment.
North Hollywood, they say, is on the verge of an economic renaissance that could transform one of the San Fernando Valley’s most rundown commercial areas into a mecca for film and television production.
But critics say they’ve heard that tune before about the same neighborhood, nearly a decade ago.
Although the Los Angeles Community Redevelopment Agency ultimately succeeded in bringing in the Academy of Television Arts and Sciences to North Hollywood in 1991, plans back then for a four-star hotel, a restaurant with banquet facilities and vastly more retail and office space fizzled. That leaves local business people more than a little skeptical of the new proposals.
“It will never happen. It’s total pie in the sky,” said Mildred Weller, a property owner in the targeted area and longtime CRA foe. “The CRA made all these promises that the Academy development was supposed to totally renew North Hollywood. But they still have space in that project that’s never been rented.”
Walter Beaumont, CRA assistant project manager for North Hollywood, said the original project got hammered, first by the building industry downturn in the early 1990s and then by the Northridge earthquake in 1994.
This time around, proponents argue, there is demand for studio sound stages and supporting office space, especially because the proposed projects are targeted for a site that’s surrounded by media companies stretching from Disney Studios in Burbank to the CBS Studio Group in Studio City. With the Metro Red Line station scheduled for completion in the spring of 2000, the community is poised to be a transportation hub for the east San Fernando Valley.
“I think this validates the strength of the North Hollywood area. It’s being looked at by a variety of different players from a bunch of industries,” he said. In response to the CRA’s solicitation of bids, two builders submitted competing plans to redevelop 42 acres of mostly rundown manufacturing and auto-shop businesses on either side of Chandler Boulevard, between Lankershim Boulevard and Vineland Avenue, next to the Red Line station.
A partnership calling itself Academy Media Centre LLC of Beverly Hills is proposing to build a 1.7 million-square-foot, $250 million to $300 million development featuring eight sound stages, apartments, a restaurant and food court complex, an eight-story office tower, a 1,825-seat performing arts center and a culinary school with banquet facilities.
The competing project, proposed by retail developer J. Allen Radford, envisions 4.26 million square feet, featuring 10 sound stages, four 20-story office towers, a 300-room hotel, 20 restaurants, a 20-screen multiplex and 400 condominiums. Radford said it would create 14,000 jobs and take 10 years to complete.
But business owners in and around the project area are bracing for a nasty fight with the CRA, which is almost certain to use its power of eminent domain to assemble the parcels into a developable chunk.
Patrick Berberian, owner of California Art Products Co., a company that makes fiberglass columns and other decorative art, believes his 50,000-square-foot parcel on the north side of Chandler will be one of the first to be subjected to eminent domain proceedings because it lies in the first phase of both projects.
“What I object to is that it’s not for schools or roads; it’s for another developer to maximize his profit,” said Berberian.
Berberian said Radford offered him $1.8 million for his land, but he estimates it will cost him $3 million to find a suitable replacement property.
Beaumont said the CRA doesn’t wish to resort to using its power of eminent domain but Berberian’s story suggests that assembling the site without the agency’s legal muscle would be difficult.
“We come under criticism for using eminent domain, but what never gets mentioned are the inflated property values people have in mind,” said Beaumont.
Weller questions whether either of the projects are economically viable, and whether the demand for office, or studio space will cool before the project is completed.
It would appear, after all, that the absorption of office space, especially for entertainment uses, appears to be slowing. The vacancy rate for prime office space in Burbank had risen to 5.9 percent as of Sept. 30, up from 3.9 percent just three months earlier, according to Grubb & Ellis Co.
Beaumont said if demand for the hotel, offices or any other component of the project wanes, the agency and developer could make adjustments over several years.
His office will weigh both proposals before passing a recommendation along to the agency’s board, which could happen as early as December. A final nod from the City Council would give the CRA 180 days to negotiate a development agreement with the winning team, Beaumont said.
Guy Weddington McCreary, a longtime North Hollywood resident and past president of the Universal/North Hollywood Chamber of Commerce, said he and other business leaders strongly support the redevelopment effort.
“If everything falls into place, this will be a major economic and entertainment hub,” he said.
