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Talent Firms’ Search for Office Space May Lead Away From Beverly Hills

Talent Firms’ Search for Office Space May Lead Away From Beverly Hills

By ANDY FIXMER

Staff Reporter

For decades, Beverly Hills has been to talent agencies what Madison Avenue was to the advertising business. But the ad agencies have long since moved off Madison, and now it looks as if the talent might be headed elsewhere, too.

Following Creative Artists Agency Inc., which said earlier this year it would be moving to a new Century City headquarters in about 18 months, William Morris Agency Inc. and United Talent Agency Inc. are reviewing their office requirements and may leave the city.

The simultaneous hunt for new locations by three of the industry’s five largest firms is considered coincidental, but it nevertheless is a blow to what was until now a mainstay of the Beverly Hills economy.

“The entertainment industry is spread all over,” said Mike DeSantis, a senior vice president with Cushman & Wakefield Inc. representing UTA in its search. “These agencies can go anywhere the studios are, and that’s from Burbank to the Westside and everywhere in between.”

While William Morris and UTA have not ruled out relocating within Beverly Hills, finding space large enough to meet their needs within the city limits has proven difficult and expensive.

At the end of June, the city’s roughly 6 million-square-foot stock of office space had only 700,000 feet much of it non-contiguous that was vacant. At nearly $3 a foot, Beverly Hills has the third highest average rents in L.A. County.

Also, office buildings in the city are much smaller than those in Century City and getting approval from Beverly Hills to erect a headquarters can be a lengthy and costly process.

Executives at William Morris, the first of the talent agencies to set up shop in Beverly Hills, still talk about renovating and expanding its headquarters building, but the firm is on the market for about 150,000 square feet and continues to kick the tires on new Westside locations.

“We are intertwined with the city and we would love to stay where we are,” said agency spokesman Chris Petrikin. “But we are always looking. If there is something pre-existing that meets our needs and it’s not in Beverly Hills we are willing to look at it.”

UTA, on the market for 90,000 square feet, has outgrown the three floors it leases at 9560 Wilshire Blvd. and is checking out new locations from Santa Monica to Century City.

And International Creative Management Inc., though not actively on the market for a new location, hasn’t ruled out moving to a larger location in the next several years.

“There’s nothing imminent,” said David Lux, the firm’s director of corporate communications, “but we’re an expanding company and there’s always space issues.”

Talent search

Still, some talent agencies have committed to staying within Beverly Hills.

Last month the Endeavor Agency LLC moved into its new 70,000 square foot digs at 9601 Wilshire Blvd. and Paradigm, which had been in L.A., shelled out $50 million earlier this year to buy the 30,000-square-foot building at 360 N. Crescent Drive. The Gersh Agency, headquartered at 232 N. Canon Drive, is also looking for larger space in Beverly Hills, said Hugh Dodson, the firm’s chief executive.

The decision to look outside Beverly Hills wasn’t an easy one for William Morris.

Two months ago, the agency’s president, Jim Wiatt, had a lease sitting on his desk for 150,000 feet in a Westwood Village office tower. The deal would have put the William Morris name atop the 24-story tower at 10960 Wilshire Blvd., but moving out of its Beverly Hills home of nearly 70 years, where the block in front of its office has been renamed William Morris Place, proved too wrenching.

Petrikin said besides relocating, the company was considering plans to tear down its headquarters and replace it with a larger facility.

“We’ve outgrown our building,” he said. “We’re either going to tear it down or gut it and build up or build out. The test is if the city allows that to happen.”

Beverly Hills Mayor Mark Egerman said the city would like to keep William Morris in town and that it was talking to the agency about building a new headquarters on five city-owned acres behind the L’Ermitage Hotel on Burton Way.

Egerman said the land, which is zoned industrial and has few homes nearby, would be an ideal location for an office building. “That would be an alternative,” he said. “But I understand they prefer their current location. Right now they are within walking distance of everything.”

William Morris’ offices are spread across three buildings, including two leased spaces, and the agency needs to resolve its consolidation within the next year, Petrikin said.

Long history

William Morris got its start in 1898 representing New York vaudeville acts but moved its headquarters to the intersection of Hollywood and Vine during the early days of the motion picture industry.

By 1930, the company had outgrown its Hollywood site and moved to Beverly Hills, where many of the celebrities of the day were building mansions.

In 1981, the firm built William Morris Plaza at 151 El Camino Drive, which the city renamed William Morris Place in 1998 to celebrate the firm’s 100th anniversary.

Other agencies followed it to Beverly Hills and new firms, many founded by former William Morris agents, set up shop nearby.

The firms contribute greatly to the local economy and are responsible for a sizeable portion of the city’s sales tax revenue collected on retailers and restaurants, according to Todd Steadman, economic development director at the Beverly Hills Chamber of Commerce.

“Talent agencies are an extremely important component to the local economy,” he said. “These people shop and dine at the stores and restaurants of Beverly Hills, which brings revenues to the city and supports the services we cherish.”

But Bob Spivak, president and chief executive of Grill Concepts Inc., which owns The Grill, a power lunch spot for agents and their clients, said losing the talent agencies wouldn’t hurt Beverly Hills in the long run.

“We would hate to see them go, but I feel as though their office space would be replaced by people of equal stature,” he said. “There might be a temporary change in business but it will pick up when their space is filled.”

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