Development Duo Saw Nightclubs as Primary Attraction

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David Gajda and Jose Malagon just knew Hollywood was poised for a comeback.


“Take a famous area with good bone structure, it hits rock bottom, and then all the developers come in,” said Gajda, a co-owner with Malagon of development group Hollywood Media Center. “I felt that could happen.”


Gajda, chief executive of Hollywood Software Inc., and Malagon, who owned Fine Line Events, an event planning company, didn’t intend to become major Hollywood players when they sought a Cahuenga Corridor home for their business offices 12 years ago. But their combined experience with redevelopments in New York’s Greenwich Village and Miami’s South Beach taught them how to spot the signs that a neighborhood was ripe for a rebirth.


From watching South Beach’s redevelopment, Malagon learned that nightclubs can be catalysts for a community’s metamorphosis. “Club-goers will go to a club in an industrial district if it is a happening club,” he said.


Restaurants then pop up to feed club-goers, and once they are eating and partying in the area, they might want to work and, eventually, move there. Last, retail opens up.


Convincing others of the signs was more difficult. Gajda and his partner spoke of turning Cahuenga into a 24/7 entertainment zone. “People looked at us like we were crazy,” he said.


“People would kind of roll their eyes and say, ‘You’ve got to be kidding.'” Said Kerry Morrison, executive director of the Hollywood Entertainment District. After all, a needle exchange program once leased space in Gajda and Malagon’s office building on the corner of Selma Avenue and Cahuenga Boulevard.


They kicked off the corridor’s rehabilitation at the 26,000-square-foot former Schwab’s haberdashery on Hollywood Boulevard and Ivar Avenue. After stripping down the building’s outer layers, they discovered that a skeleton of original arches remained.


Engineers and sculptors restored the old arches, which Malagon estimated had been 90 percent destroyed. “And now, we think it is one of the nicest buildings on the boulevard,” he said. Today, the Ivar and Cinespace, two hot nightspots, occupy the building.


“A community can be neglectful and the result is a neglected-looking community,” said Nyla Arslanian, president of the Hollywood Arts Council. “Having concerned and involved property owners helps change the environment.”


Since Gajda and Malagon took the plunge, the area has become a focal point of the city’s nightlife. Popular clubs like Tokio, Cinespace, the Ivar, Xes, White Lotus, Star Shoes and Beauty Bar all call Cahuenga Boulevard home.


With a wide array of club and restaurant offerings, Malagon and Gajda said that housing and retail are the next fronts to tackle. Malagon suggested that complete rehabilitation of the area will take five to eight more years.


Besides the former Schwab’s site, Gajda and Malagon have worked on getting Caffe Etc. and Citizen Smith, an American bistro, to the 1600 block of North Cahuenga Boulevard.


Gajda and Malagon’s portfolio consists of nine Hollywood buildings. As the development portfolio expands, Gajda is slowly winding down his work at Hollywood Software Inc., which he sold in 2002 to Access Integrated Technologies Inc. Malagon dissolved Fine Line Events two years ago.


With nothing but development on their plates, Gajda and Malagon are addressing the limited parking situation in the neighborhood, considering alternatives including a valet service and pushing the City Council to conduct a parking study, which has already begun.

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