Promenade Dies; Area’s Revitalization in Question : Redevelopment: Some see doom in the failure of the massive project but others look to smaller-scale remedies.

Like a $250-million anchor dropped into stagnant waters, the Hollywood Promenade project was supposed to send out ripples of development across the run-down entertainment capital.

Billed as 1 million square feet of shops, restaurants, movies, offices and a hotel, wrapped around the tourism magnet that is the Mann’s Chinese Theatre, it was the brainchild of Melvin Simon & Associates, one of the nation’s largest commercial developers.

But the Hollywood Promenade has not gone beyond the drawing board, and its prospects look bleak now that Los Angeles has suspended negotiations on its financing of the project. There is a question of whether Hollywood will be able to revitalize itself in a time of economic anemia.

In theory, the Simon project was the one that was finally going to get redevelopment rolling in Hollywood after six years of litigation and other roadblocks.

Under a redevelopment plan approved by the Los Angeles City Council in 1986, the Community Redevelopment Agency was authorized to go ahead with a 30-year, $922-million program to be funded by increases in property tax revenues.

Some Hollywood business figures, such as Frank Buckley, managing director of the Ramsey-Shilling commercial real estate brokerage, say they see little hope for the area without the Hollywood Promenade and the national stores it was expected to bring in.

“The lack of such an anchor is devastating,” he said. “It will leave Hollywood in the position only to cater to small ma-and-pa retailers, and we have plenty of them.”

Michael Marr, vice president of development for Simon, agreed: “I know the community was looking to us as being a bell cow of development for the Hollywood redevelopment area. I think it will damage the ability of other projects to be developed in the near future.”

But others who have closely followed the situation noted that the Simon project has been in trouble for at least two years. Efforts to find private financing failed, and in 1990 the developer appealed to the city for $70 million. Earlier this year, the builders reduced the request to $48 million. But the City Council balked at even that amount.

These observers said it is time for the redevelopment agency to show its stuff with smaller projects for Hollywood, which brings in millions of tourists a year despite its generally neglected appearance.

“I believe you could put the same amount of money into lots of medium and smaller projects that actually could happen, and then you’d see improvement faster all along the boulevard,” said Phyllis Caskey, president of the Hollywood Entertainment Museum.

The museum, still in the planning stages, was intended as part of the Hollywood Promenade, but Caskey said she started looking elsewhere more than a year ago and found a prospective home in the Pacific Theatre at the corner of Hollywood and Cahuenga boulevards. With half a million dollars in redevelopment funds in hand, the museum has been promised $3.5 million toward purchase of the Pacific Theatre building.

“I don’t think development as a whole has tapped the opportunities,” said Michael Dubin, vice president of Kornwasser & Friedman, the development firm that built the Hollywood Galaxy, a complex of movies, shops and food outlets a block west of the Chinese Theatre.

“You can’t replicate the tourism on Hollywood Boulevard anywhere in the world,” he said.

In the absence of readily available commercial loans, redevelopment is “basically the only thing we have at the moment,” said Barton Myers, a UCLA architect who is working to merge the Metro Rail station at Hollywood Boulevard and Highland Avenue with the surrounding area.

“In tough times, constraints make you look more carefully at what you have,” he said, “and maybe there’ll be a new sensitivity to the scale and the fabric that we have.”

Nyla Arslanian, who publishes a Hollywood visitors guide and arts directory, said the dream of a major development may have obscured what the area has to offer.

“Why not tell everybody what’s here and stop shooting ourselves in the foot, telling everybody how bad it is?” she said.

Other projects already approved or soon to be funded by the redevelopment agency include a Sunday morning farmers market, landscaping and other cosmetic improvements, a security patrol for Hollywood Boulevard, rehabilitation of historic buildings, and loans to encourage entertainment industry firms to stay in Hollywood.

“Hollywood is not immune from the recession and is not immune from the lending crisis,” said Councilman Michael Woo, whose district includes much of Hollywood.

“We have to proceed as fast as we can with smaller projects and wait for large projects like the Hollywood Promenade to come up with some alternative financing,” he said.

Woo announced last month that he will not seek reelection, choosing to run for mayor in April.

Although there seems little alternative to the redevelopment agency as a funding source at a time when commercial financing is hard to obtain, there is doubt about the process in Hollywood--and not just among a group of Woo’s critics whose lawsuit held up redevelopment spending for six years.

“It seems to me that the bureaucracy of the CRA is much too large, and we spend an inordinate amount of time and money on lawyers and the like, and we should spend more money on bricks and mortar and social programs, including law enforcement,” said Willie Fleet, publisher of the Los Angeles Independent newspapers and senior vice chairman of the Hollywood Chamber of Commerce.

“I think now that the Simon project is on the back burner, it’s an opportunity for us to take an entirely new look at the whole plan,” he said. “The small-scale programs are nice, but we must coordinate them in a fashion that produces large-scale results.”

Norton Halper, a longtime opponent of the redevelopment process, said of the Simon project: “We’ve been saying for five years that it will never fly. Unless the city provides the necessary support services, whether in Hollywood or East L.A. or anywhere, developers and business people are not going to come into the area, no matter how you fund them.”