Projects Reveal Different Sides of Hollywood Revival
On a recent weekday evening, a steady stream of shoppers negotiated their way past a cluster of spike-haired punk rockers to join the throng inside Amoeba Music on Sunset Boulevard.
By contrast, the sidewalk in front of the $100 million Arclight Hollywood complex at the site of the historic Cinerama Dome across Ivar Avenue was desolate. Just a few people stood in the courtyard of the gleaming new development.
The fortunes of the two destinations illustrate the vagaries of developing retail projects in one of the city's grittier urban neighborhoods. It's also a reminder that the long-forecast revival of Hollywood is not going to be a lock-step process in which one success begets another.
While several big projects have recently been completed or are in the works in the neighborhood, the national economic downturn has taken a toll on the Hollywood office and retail market, with relatively little tenant activity in recent months. Not helping matters is the lackluster performance of the TrizecHahn Corp.'s Hollywood & Highland complex, especially the shopping portion, which was expected to propel further growth.
Chris Bonbright, chief executive of real estate brokerage Ramsey Shilling Co., describes Hollywood as "an ascendant market. Property values aren't falling but they are not going through the roof. Frankly, the big companies aren't doing much. The entrepreneurs are the ones doing the deals right now."
Unlike the tourist-oriented Hollywood & Highland project and other redevelopment in Hollywood, the projects emerging in the area around Sunset and Vine Street are primarily designed for city residents.
Besides Amoeba and the Arclight complex, work finally began earlier this month on the long-delayed Sunset & Vine mixed use project. When completed in two years, it will have 300 loft-style apartments built above a Borders bookstore, a Bed Beth & Beyond, a Baja Fresh restaurant and a handful of other businesses.
"Our project is focused on the street. It creates the pedestrian activity that you want in these type of urban areas," said Lawrence Bond, chairman of Bond Capital LTD, a partner in HW Marketplace LLC, the developer of the Sunset & Vine project. "On a long-term basis for other retailers and merchants, adding housing increases the street life and it increases the nightlife. It makes it a 24-hour neighborhood."
There's little denying that Amoeba already has become one of the area's biggest success stories. In the space of six months, the 45,000-foot music and video store is generally considered the hottest record seller in town moving, on average, more than 125,000 new and used CDs a month.
"The response has been great," said Karen Pearson, co-owner of Amoeba. "There's a real energy in this area and there's a feeling that things are happening."
The store has more than 170 employees and sells more than 13,000 used videos and 30,000 used LPs every month in addition to its larger CD business. Its regular schedule of free concerts has helped it become a destination for people from all over L.A.
But across Ivar at the 14-screen Arclight, where watching a movie projected with state-of-the-art audio and projection equipment in reserved seats costs $14, Neil Haltrecht acknowledged that the things appear quiet from Sunset Boulevard when people are not lining up for the Cinerama Dome.
Haltrecht, president of Robertson Properties, which is developing the Arclight project, said he expected activity to pick up next month when 24-Hour Fitness opens a 50,000-square- foot facility in the center.
The health club and a restaurant/nightclub have leases to occupy most of the roughly 80,000 square feet of retail space at Arclight, but so far those spaces remain empty. The lack of activity on the Sunset side of the complex has given it "a bit of a ghostly feel" in the words of one nearby business owner.
To some, the lack of a street presence at Arclight appears at odds with a stated desire by the developers to build a project that would appeal to locals and help reintroduce a sense of community in the neighborhood.
The courtyard of the circular Cinerama Dome occupies most of the property's frontage on Sunset. Because of that, the curving glass and steel building constructed alongside it has limited visibility on Sunset.
'Things are moving'
Predictably, local boosters believe it's too early to judge the long-term potential of the complex, which is owned by Pacific Theatres. (Both Robertson Properties and Arclight are affiliated with Pacific.)
"This is an important project. We are developing a more affluent residential class component in the neighborhood," said Leron Gubler, president and chief executive of the Hollywood Chamber of Commerce. "Things are moving. I wouldn't say it's a lightning storm, but at least it's a rain storm."
Haltrecht remains optimistic that businesses signing leases at Arclight will serve both as a draw for nearby residents and a destination for people from throughout the city who want something they can't get in their neighborhood.
"We intentionally held off on rushing to lease the space instead of going with a me-too concept," Haltrecht said, adding that the Arclight theaters opened several months ahead of schedule to coincide with the 20th anniversary re-release of "E.T. The Extra-Terrestrial" in March.
"Granted, we would have liked to open the nightclub at the same time. But we'd rather wait six months or a year to get the right tenant," he said.
Arclight officials did not return calls seeking comment.
"People are always trying to sell Hollywood short, but in our perspective it's only half way home," Bond said. "On a five-year horizon you're going to see incredible projects getting off the ground."
He declined to speak directly about the Arclight project, but called Amoeba an example of "incredibly smart development."
"They put everything on the street and they have a big, colorful neon sign that gets your attention," he said. "They are going to be a big draw for our residents."
Haltrecht anticipates the restaurant/nightclub Robertson has signed operated by a Dallas company he declined to identify will contribute to the draw. The venue would house an Asian-themed restaurant, a dance club, sports bar and karaoke lounge, he said.
The restaurant and nightclub won't open until the end of the year at the earliest. In the meantime, Amoeba's Pearson said, "We're hoping things will pick up when 24 Hour Fitness comes in."
There is more than $500 million in development underway or planned for the immediate area, as speculation abounds that the commercially underserved urban center can be turned around with a mix of businesses and residences.
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