$45-Million Complex : N. Hollywood ‘Snail’s Pace’ to Turn to Jog
Redevelopment in North Hollywood’s deteriorating business district, which has been proceeding at a snail’s pace since it began seven years ago, is expected to take a significant step forward with the condemnation of one square block to make way for a $45-million office, retail and entertainment complex.
The Los Angeles Community Redevelopment Agency is scheduled to begin condemnation proceedings today to raze an area slated to be the centerpiece of North Hollywood’s commercial revitalization.
The 7.8-acre site has been set aside for “The Academy,” a seven-story complex that will feature such commercial ventures as a six-screen movie theater and a museum of television history.
To make way for the project, the redevelopment agency will take over 13 parcels immediately east of Lankershim Boulevard and bounded on the north and south by McCormick Street and Magnolia Boulevard. The agency will spend about $6 million to buy the land, displacing 18 businesses and tenants of 17 homes and apartments, according to Jerry Belcher, the city’s project manager for North Hollywood redevelopment.
Complications Could Arise
Agency officials and the project’s developer conceded that complications could still arise. But one of the most difficult hurdles--securing financing for construction--has been cleared, said Ken Adkins, a vice president for the development team of Birtcher Pacific II and the Kensley Group.
“We’re in final stages of negotiations, and it’s going very well. I don’t foresee any more problems,” said Adkins. He said there are three private investors for The Academy but he would not identify them.
The redevelopment agency commissioners voted unanimously last Monday to condemn the property, aiming for construction to begin in the fall of 1987. Belcher said a Los Angeles Superior Court judge will be asked today to issue a condemnation notice, a routine step leading to transfer of the property to the agency in 90 days.
The agency is still negotiating a selling price with many of the property owners, some of whom said they have been offered much less than they think their land is worth.
“I’m going to take a bath,” said owner Joseph Cernuto of the Bison Leather Co., whose three-story building at 5222 Lankershim has 10,000 square feet of floor space. “I’ll have to auction off my inventory. I’ll be lucky to get 50 cents on the dollar.”
Cernuto said there is “several hundred thousand dollars” difference between what he was offered for his building and what his own hired appraiser said the structure is worth, although he would not give the figures.
Jo Ann Benci, who owns two buildings in the 11100 block of McCormick Street, said the agency offered her $275,000 and that an appraiser she hired said the land is worth about $375,000. “The problem is that I am going to have to relocate,” said Benci, who has operated a food demonstration firm--whose employees give out free samples in supermarkets--out of one of the buildings since 1965, “and, given the size of my business, there’s no way I can find a suitable place nearby at anywhere near what I’ve been offered for my property.”
Belcher said that, if property owners are dissatisfied with the outcome of negotiations, they can file suit against the agency to settle the dispute in court. So far, two property owners have agreed on a price for their land, he said.
Belcher said much of the merchants’ anger is the result of the many delays that The Academy project has experienced. Last June, the principal lender pulled out, causing officials to scale back the project by excluding a 300-bed hotel.
“It’s really a psychological thing,” Belcher said. “Most of the property owners don’t even get serious until we start talking money. We know what their concerns are, and we’ll accommodate them as well as we can.”
A thriving business district from the 1930s to the 1960s, North Hollywood’s central core of about five square blocks has steadily declined as large department stores along Lankershim, such as Sears, May Co. and F. W. Woolworth Co. moved elsewhere.
During the 1970s, when redevelopment in the area was first discussed, many merchants, believing that their businesses would be relocated, neglected the upkeep on their shops, furthering the commercial decline, said Fred Bower, president of the North Hollywood Chamber of Commerce. At the same time, customers began taking their business to local malls and other business strips, such as Ventura Boulevard.
Today, much of the North Hollywood district consists of cramped neighborhood shops, thrift stores and vacant buildings.
The Academy project is one of about a dozen that the redevelopment agency has taken on since it was formed in 1979 to revitalize a 750-acre area roughly bounded by Tujunga Avenue, Cahuenga Boulevard, and Hatteras and Camarillo streets. Two of the major projects--a $25-million Hewlett-Packard Co. building across the street from The Academy site and a 200-unit senior citizen housing complex at Magnolia Boulevard and Vineland Avenue--have been completed.
Developer Adkins said construction on another large project, a shopping center featuring a chain grocery store, is ready to get under way across the street from the senior citizens complex.
Critics of the redevelopment agency do not question the need for improvements in North Hollywood, but they argue that the agency has been moving too slowly, letting redevelopment efforts in nearby Burbank, Glendale and Universal City acquire the large contracts.
“In a sense I think the agency has been sleeping at the wheel,” said Tom Paterson, president of the North Hollywood Homeowners Assn. and a former member of a citizens advisory panel to the agency. “We’ve got a couple of token projects and the rest has just been talk. All the development seems to be going on around us.”
Moving at Steady Pace
Belcher and Adkins said redevelopment has been moving at a steady pace but acknowledged that it has been hampered somewhat by North Hollywood’s unglamorous image, making the area a tough sell for the agency.
“Let’s face it, North Hollywood is not exactly the Wilshire Corridor or West L.A.,” Adkins said. “But we’re moving ahead and, in the next few years, we’ll see movement.”
Belcher noted that many of the projects are planned for sites where buildings already exist, requiring the agency to use eminent domain proceedings, which can take months and even years.
“We’ve lost a lot of clients because of that,” Belcher said. “If we find someone who expresses an interest in some of our land, they want to move quickly. Sometimes they have compelling reasons to move, and it just blows their mind when they find out that it’s going to take a while.”
Belcher said the agency could have moved quicker in redeveloping property by taking on housing projects or selling land to businesses such as car dealers, who frequently need more space to show and service their vehicles.
But that approach so far has been rejected because that kind of development would not provide the agency with the income it would like from North Hollywood.
“When you get down to it, we came into an area that was in steep decline, and we haven’t arrested that decline yet,” Belcher said. “There are a number of things we could do to look a little more active, but we’ve got to think of the future. Frankly speaking, one of our main financial supports is taxes, and, if we knock down a one- or two-story building, and then build another, there’s not much in that for us.”
Under redevelopment, property is bought by the agency using city loans and grants after the redevelopment zone has been created. The city then pays to relocate merchants and tenants.
The land is then sold at a discount to developers, encouraging construction in financially depressed areas. The process allows the city to assemble large parcels for private developers who might otherwise encounter unwilling sellers.
Benefits to the area come in the form of increased property taxes that result from the higher assessed value. Any tax revenues above those paid when the zone was created go back to the redevelopment agency, rather than to other government agencies such as the county, state or school district.
The funds are used to finance more improvements in the zone and to pay off government bonds that were sold to start up redevelopment.
The Academy should be a big money winner for the agency, barring complications, Adkins said. It will include 160,000 square feet of office space, as well as 55,000 for retail and 31,000 for the United Artists theaters. A four-story garage designed to accommodate 1,000 cars is also planned.
The development gets its name from the nonprofit Academy of Television Arts and Sciences, which has a tentative agreement with the developers to move its headquarters from Burbank to North Hollywood “if the project develops correctly,” academy spokesman Murray Weissman said.
Most of the people affected by the takeover of land agree that redevelopment in North Hollywood is in the best interest of the community.
To leather store owner Cernuto, however, the experience is a replay. Six years ago, he was forced to sell his only other large piece of commercial property to the Glendale Redevelopment Agency, which wanted it for a condominium project.
“I just can’t seem to win. It’s happening all over again,” Cernuto said. “What they’re doing is a good thing. I just hate getting caught in the middle of it.”
