Hollywood Museum Files for Bankruptcy

Hollywood’s fragile tourist industry, already reeling from Gov. George Deukmejian’s veto last week of state funding for a major entertainment complex, was shaken again this week as owners of the privately-funded Hollywood Museum said they had filed for bankruptcy.

The Hollywood Museum’s owners said they are being forced to reorganize under the federal Chapter 11 bankruptcy law because of lagging patronage, legal troublesand neglect by the film industry and Hollywood civic groups.

“We think we can build back up, but we’re going to need help from other sources,” said Peter Gordon, an attorney who is one of several partners in the museum. Gordon estimated it might take the firm up to a year to “get this mess turned around.”

Hollywood’s civic leaders have yearned for decades for a motion picture museum which would act as a magnet for the 3 million tourists who flock to Hollywood Boulevard each year. Area boosters have long complained that tourists linger on the boulevard just long enough to stop at Mann’s Chinese Theater and gaze at the stars in the sidewalk, only to hurry back to their tour buses without spending any more time or money.

Many boosters thought Hollywood’s tourism problems were solved earlier this year when state Sen. David Roberti (D-Los Angeles) announced plans for the “Hollywood Exposition,” a $53.3 million museum and entertainment complex which state planners expect to draw 1.1 million visitors a year.

But with the state-funded museum still in early planning stages -- and now apparently stalled by Gov. Deukmejian’s veto last week of $785,000 to hire a skeleton staff and work out initial details -- the owners of the Hollywood Museum have been hoping their venture would be the first to capitalize on the hordes of tourists drawn each day to Hollywood Boulevard.

Hopes Have Faded

After a year of operation, however, those hopes have faded.

Now, $250,000 in debt, the museum’s owners are turning their attention to finding some way to survive. “If we fail, what will Hollywood be left with?” asked John LeBold, a film buff who has been collected movie memorabilia since he was 9 years old and whose extensive trove of film props and 5,000 costumes isthe heart of the museum’s collection.

The museum opened in May, 1984 in a remodeled bank building on Hollywood Boulevard, one block west of the Chinese Theater. Gordon, a preservationist who was involved in the court fight to save the now-razed Garden Court Apartments, joined forces with several other investors, including LeBold, 45, who said he has searched for years for a museum to display his costume and prop collection.

“People have been trying to get a film museum started in Hollywood for more than 20 years,” LeBold said. “We were the first ones to get one started. But no one seems to appreciate that fact.”

LeBold and Gordon say that from the beginning, their museum has been ignored by Hollywood civic leaders who have aligned themselves with the larger, statefunded museum proposal. “Our major disappointment was that everybody’s tied into the state museum proposal,” Gordon said. “We’re looked at as the orphan.”

“We kept waiting for the state or the city do something and the Olympics kept getting nearer and nearer,” LeBold said. “Finally, we took the step when no one else was doing anything.”

Confident that Olympics-bound tourists would give their fledgling museum a rousing start, LeBold and the other investors spent $500,000 to renovate the old bank building. The museum opened on May 20, 1984, just in time for the Olympic crowds.

The crowds never came. Tourists deserted Hollywood Boulevard during the Olympic Games. “The word we got was that crowds stayed away because the word went out that Hollywood Boulevard was a dangerous eyesore,” LeBold said. “That hurt us from the start.”

Some Hollywood ivic leaders suggest that the Hollywood Museum’s need to make a profit also kept tourists away. The museum has been charging $5 for adults and $3.50 for children, prices that some Hollywood boosters believe are prohibitive not only to potential patrons who arrive on tour buses, but also local ays,” said Marian Gibbons, one of the founders of Hollywood Heritage, a preservationist group. “But I think the prices have worked to their disadvantage. The museum is small and it’s up against places like the Chinese Theater and the Hollywood Bowl Museum, which are run on a non-profit basis and have free admission.”

Gordon and LeBond said they have considered trying to run the museum on a nonprofit basis, but that it would be impossible unless they could persuade major film studios to donate exhibits for free.

“One of our biggest problems,” Gordon said, “is getting film companies to lend us artifacts for displays. Sometimes they’ve given us some breaks on displays, but none of them has consistently provided items for free.”

Gordon suggested the museum might be able to help studios releasing new films by coordinating “tie-in” displays. “It would be great if when ‘Rambo’ came out we could have displayed Rambo’s explosive-launching bow,” Gordon said, “or if we could have displayed Conan’s armor when ‘Conan, the Barbarian’ was released.”

But the Hollywood Museum’s owners say that admission fees and display costs can only explain some of their financial woes. Gordon and LeBold also criticized Hollywood civic leaders for aligning themselves with Roberti’s state museum proposal to the exclusion of all others.

“Whenever there was a meeting to discuss the state museum, we would stand up to say, ‘Hey, why don’t you use our museum as a jumping-off point?”’ LeBold said. “But no one wanted to hear from us. We got no cooperation from Roberti’s office, or the Hollywood Chamber of Commerce or anyone who might have been in the position to help.”

Bill Welsh, president of the Hollywood Chamber of Commerce, replied that there was little the chamber could have done. “We publicized the museum,” he said. “I guess they expected us to do a free promotion job for them, but we can’t do that for every business in the chamber.”

Marian Gibbons said the museum has received its share of publicity. “I included the museum in some articles I did for several in-flight airline magazines,” she said, adding: “I don’t see how they can say the community didn’t try to help.”

The museum’s owners also made several financial moves that may have led to its declaration of bankruptcy, Gordon said. He was referring to his decision -- along with the other owners -- to sell the museum earlier this year to a new owner, the Hollywood Hall of Fame Museum Associates, Inc.

According to the museum’s attorney, Martin Rub, the Hall of Fame firm failed to complete payments on the sale of the museum and also failed to eep up with bills and rent payments for the remodeled bank building.

On June 26, according to Rub, Gordon and the other original owners filed suit in Los Angeles County Superior Court against the Hall of Fame firm for $440,000 in damages, alleging breach of contract and breach of fiduciary duty.

Hy Hunter, owner of the Hall of Fame firm, said he paid $600,000 for the museum, but “walked away” from the deal because he ended up with “not much more than an empty building. I found out I didn’t get the costumes or anything else beyond a building they didn’t own anyway. Fortunately, I walked away from it. I’m not paying $600,00 for nothing.”

Left with their failing museum, Gordon and LeBold said they will try to work with bus tour firms to shore up their flagging attendance. According to Gordon, the museum’s owners might even cut admission rates to lure more tourists inside.

“People keep telling me we’re the only glamorous place left on the boulevard,” said LeBold. “I hope we can convince a lot more people of that. It would be a tragedy to see us go under without any other museums out there to replace us.”