animation/jan27/24inches/1stjc/mark2nd

BRAD BERTON Staff Reporter

The folks who bring you those not-so-adorable misfits Beavis and Butthead Viacom Inc.'s MTV Networks animation group are the latest animation business bound for beautiful downtown Burbank, sources have told the Business Journal.

Under the pending deal, a set of old, vacant industrial buildings at Olive Avenue and Victory Boulevard is set to become the new home of the MTV group's animation artists.

Viacom last spring opted to relocate the balance of the MTV group's local offices including operation of the MTV, VH-1 and Nickelodeon cable channels from the Texaco tower in Universal City to Santa Monica.

But the decision to keep the animation group in the neighborhood further entrenches Burbank and the surrounding area as the world's animation capital.

Demand from all sectors of the media-entertainment business has filled almost every viable business building in Burbank forcing the creative fields to get equally creative with real estate.

Burbank area real estate sources confirm that the property is to be custom-renovated as an approximately 70,000-square-foot animation facility by Texan developer Karl Sternbaum.

Neither Sternbaum nor Viacom or their respective real estate negotiators, Ramsey-Shilling Co. and Cushman Realty Corp. would discuss the pending lease transaction.

But sources familiar with the development tentatively dubbed "Olive Studios" said MTV likely will pay around $25 per square foot annually for the custom space at the facility, which is to include a new parking structure.

MTV's animation unit, which will relocate from the Texaco tower in Universal City, follows a host of other animation operations that have made the Burbank-Glendale corridor home.

Animated television shows and feature-length movies are a hot commodity as cartoon characters' popularity has burgeoned in the U.S. and around the world.

The international children's market in particular is "hungry for American product," DIC Entertainment L.P. President Andy Heyward recently told the Business Journal. DIC, now a Walt Disney Co. subsidiary and the world's largest animated children's TV programming producer, has been in Burbank since 1985.

Here in the U.S., cartoons have an inherently "evergreen" life cycle, Heyward added.

"You have a new audience coming up every two or three years. So programs that we produced 13 or 14 years ago get relicensed every year."

Licensed merchandise tied to the popular shows and characters is a particularly lucrative element of the animation business inspiring producers to pursue the phenomenal success the Disney empire has achieved through that business line.

Industry analysts project that the new DreamWorks SKG studio which has nearly 500 animator-types working on its upcoming features ultimately will see as much as half of its profits from animation projects.

Animation's growth has been focused primarily on the Burbank vicinity where many professional artists/animators live and where the animation business' key suppliers have set up shop.

"The animation artists all seem to live along or near the Burbank-Glendale corridor, and they are getting paid pretty good dollars today," said Doug Marlow, a first vice president with CB Commercial Real Estate Group in Glendale.

"They have the pull and they're using it, so it would put (an employer) at a competitive disadvantage to go away from the corridor," Marlow continued.

"That's one of the main reasons so many of these animation (facilities) requirements stay right here otherwise you'd see them in downtown L.A. or Valencia."

Entertainment business people typically prefer "funky, creative spaces," Marlow said. But due to the shortage of same, many animation groups have located in highrises.

And now that Burbank and Glendale area highrises are filled nearly to capacity a situation that has convinced some expansion-minded entertainment firms to leave the corridor real estate specialists are looking at renovation projects, such as the future MTV facility, in order to meet demand, Marlow added.

"So we'll be seeing more play on the types of properties where MTV is going," he concluded.

Two dominant animators, Disney and Warner Bros., have located major animation operations near their respective headquarters studios.

Disney's high-profile animation building recently had its grand opening. And Warner's feature animation group moved into more than 100,000 square feet at Glendale's tallest office tower.

And prior to the big Time-Warner/Turner merger, Turner Broadcasting Systems' then-fledgling feature cartoon group likewise set up shop in about 70,000 square feet within a downtown Glendale highrise.

DIC recently renewed its lease for another five years at the downtown Burbank highrise bearing its name. And Film Roman, currently headquartered just outside the Burbank city limits in North Hollywood, is reportedly planning to anchor a new 100,000-plus-square-foot office complex proposed at Hollywood Way and Magnolia Boulevard in Burbank.

And DreamWorks has its splashy new animation facility under construction in the Crystal Springs area near the 5 and 134 freeways in Glendale.

In the wake of the Warner/Turner merger, a consolidated television animation group combining Turner's Cahuenga Pass-based Hanna-Barbera operation with Warner's Sherman Oaks-based TV group is seeking new digs nearby totaling perhaps as much as 200,000 square feet.

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