Fresh off a plane from Wisconsin, Jeff Rouze stood on the sidewalk in front of the El Capitan Theatre which was literally falling down from years of neglect, subway construction and earthquake damage and imagined the great movie palace it had been in the 1920s. How he managed to convince the insurance company he worked for to invest in the property says a lot about Rouze’s faith in Hollywood.
“These 10-inch thick concrete walls on the second story had twisted and busted apart,” Rouze recalled. “It was very unsafe after the earthquake. I kept thinking it was going to fall down on the buildings next to it.”
By the time it was completed, Rouze had convinced CUNA Mutual Group in Madison, Wis., to invest more than $20 million restoring the theater and he had persuaded Walt Disney Co. to open a retail store at the site the first national chain to open on Hollywood Boulevard in almost 50 years.
It took four years to remake the building but the completed project has become a Hollywood centerpiece. More than 350,000 people bought tickets to see Disney’s animated feature “Lion King” in its run at the theater, which made it the top-grossing single-screen theater in the nation.
“He stands out in that he is a pioneer who would go where other people weren’t investing at that time,” said Dick Gee, a principal at John Ash Group Architects LLP, which worked on the theater’s restoration. “This is a case where he definitely had to have some vision.”
Rouze moved his family to Los Angeles and has started restoring other Hollywood buildings on his own. His first project: the historic Hillview Apartments, an abandoned property that had become a homeless encampment. Rouze bought the building for $3.75 million, and expects to have it restored as high-end apartments by early summer.
“When I first saw the building, I thought it was a disaster,” said Bruce Neviaser, chairman of Great Wolf Resorts Inc., traditionally a developer of Midwestern resorts that has invested $14 million in the project. “It was hard to see the vision but I think anyone would have had that reaction at first.”
Rouze has other ideas for Hollywood, including the Warner/Pacific Theatre tower, a largely vacant office building with a large non-operating theater.
But it was the El Capitan that not only transformed his career but arguably set Hollywood’s renaissance in motion.
By 1992, the theater had closed and the building’s tenants, stung by the recession, were leaving. The Northridge earthquake two years later didn’t help. Soon after, the building’s owners had defaulted on their mortgage with CUNA and the property had fallen into Rouze’s hands.
“What I thought I could do was bring experience to this project,” Rouze said. “I had all the tools and experience from doing restorations for 20 years, and I figured: Why not apply it to this building?”
Back in Madison, Rouze made his case to save the theater. CUNA, flush with cash at the time, committed the funds and gave him a long leash.
“It took a lot of convincing,” he said. “I had a good track record of repairing buildings. After I got them repaired and upgraded, we were able to get higher rents and in the end make gains on the properties. Basically, I was Mr. Fix-It for the company.”
When the theater re-opened, the business improvement district that had been formed was paying for street cleaning and hired armed security guards to patrol the boulevard. “That’s when people decided they were safe coming to Hollywood,” said Steve Ullman, an owner of Grant Parking Inc. and former president of the property-based BID. “When parents could line up outside the theater with their children and not be accosted, they went home and told their friends, ‘You know, Hollywood is really different.’ That worked better than any press release.”