Consultants Estimate $2 Million First-Year Profit : Hollywood Museum Gains Support

Two state-appointed advisory committees have determined that a proposed $53.5-million show business museum in Hollywood is feasible, citing consultants’ estimates that the project could attract 1.1 million visitors and clear $2 million in its first year.

The project, once called the Hollywood Entertainment Museum and now named the Hollywood Exposition, is envisioned as a tribute to California’s entertainment industry.

Preliminary plans call for a 350-seat theater with a lavish lobby. The theater would open into pavilions featuring the motion picture, television, radio and recording industries.

“The romance and glamour of Hollywood’s golden years will combine with state-of-the-art entertainment technology . . . (to) capture the very image and magic of Hollywood,” according to a report prepared by entertainment and economic consultant firms that assisted the committees.

Commercial Attraction

Planners say the museum will offer a combination of attractions designed to be both informative and entertaining.

According to the consultants, the project would have to be operated as a commercial or semi-commercial tourist attraction to show a profit. In line with that, the concept they presented features amusements as well as educational exhibits.

If the project were run as a traditional museum, with a $4.95 admission, the consultants estimated an $850,000 loss the first year.

But if it operated as a commercial tourist attraction, with a $7.95 admission, the project would make $2 million the first year, according to the report.

Even a semi-commercial attraction, with a $6.95 admission, would make $540,000 in the first year, the report said.

Consultants based their estimates on the costs of establishing and operating each type of attraction and on attendance projections.

A location has not been chosen for the planned three-level, 150,000-square-foot complex, but several sites in downtown Hollywood are being considered, according to proponents.

‘Positive Impact’

The committees, made up of representatives from the entertainment industry and the Hollywood community, were appointed in August by the state Senate Rules Committee. After studying plans for the exposition they presented their findings and recommendations last week at a press conference held jointly with state Senate President David A. Roberti (D-Los Angeles), a key supporter of the plan.

Roberti said that studies by the consultants and the committees show that the entertainment complex is “not only feasible, but the benefits of the project will have enormous positive impact on the state, the Los Angeles region and the Hollywood area in particular.”

Noting the state’s current drive to increase tourism, Roberti said that statewide, the project would generate $40 million a year in additional economic activity and $2.6 million a year in additional sales tax revenues.

The project would bring an additional $23 million in business to Hollywood annually, according to estimates made by economic consultants.

The four consulting firms that prepared the 39-page analysis of the project are Economics Research Associates, Landmark Entertainment Group, Archiplan and Lee Saylor Inc.

The committees’ seven-month study was paid for by $140,000 allocated in last year’s state budget at Roberti’s request.

One committee focused on site selection and economic factors, while the other explored concepts for the museum and its collection.

The committees issued a resolution finding that the plan “is feasible,” and they asked the state Legislature for an additional $785,000 to continue planning efforts.

Roberti said he expects the Legislature’s support for further funding.

He said the next steps are to incorporate the Hollywood Exposition as a nonprofit organization, hire a professional staff, select a site and begin fund raising. These steps will be taken in the coming year, he said.

Funding Possibilities

Plans call for the project to be financed through a combination of public and private sources.

Among funding possibilities are tax-exempt revenue bonds to be paid back with profit from the complex; contributions and grants from individuals, corporations and foundations; and federal, state or city grants or appropriations. A mix of funding sources will be needed, the consultants said.

They added that costs could be cut if, instead of building its own facility, the museum used donated or leased commercial space. This could reduce the project cost to as little as $30 million, they said.

Location Affects Cost

Consultants said that the project’s location would also affect cost. Hollywood Boulevard property ranges in price from $30 per square foot to $100 per square foot for premium corners like Hollywood Boulevard and Vine Street. Locations north and south of Hollywood Boulevard would be less expensive, they said.

A map at the press conference showed several possible project sites between La Brea Avenue and Vine along Hollywood Boulevard.

The complex probably would not have public parking on site, officials said; instead, the museum would lease space nearby, such as the Hollywood Bowl, and provide shuttle service.

The committees’ recommendations and consultants’ report will be submitted to the governor and state legislative committees.

Roberti said he is very pleased with the proposed plan and the findings of the committees and consultants.

The complex would “capture the excitement and heritage of the entertainment industry for the people of California,” he said.