After sitting mostly empty for three years, the Hewlett-Packard Co. building at the southwest corner of Lankershim and Magnolia boulevards has been purchased by a real estate firm that expects to lease a major portion to the Walt Disney Co.
Although the building sold for substantially less than its $28-million construction cost, sources said, area business people predicted the deal and Disney's occupancy would only benefit the NoHo arts district.
"I think this is the greatest thing that could have happened," said Ken Banks, a neighborhood activist. "We'll have an influx of creative people with better than average incomes that weren't here before. Economically, that's got to be a plus."
A spokesman for Disney's real-estate branch would not comment about the stark modern building at 5161 Lankershim Blvd., in the core of the arts district. But a principal in the acquisition firm--the Aldrich, Eastman & Walsh/Lyaton-Belling and Associates Acquisition Co.--confirmed the plans.
"Walt Disney Co. will be our major tenant in the building," said Phil Belling, adding that the building was already 75% leased.
The Hewlett-Packard building, which has been largely unused since the Silicon Valley giant vacated it as part of a company restructuring program, would be the latest office space in the general area to be scooped up by entertainment companies. Disney, for example, recently leased seven floors of a Glendale office building for corporate administrative operations.
The asking price for the building was $18.5 million, but Hewlett-Packard spokeswoman Maryanne Easley said the property sold for less. A source who asked not to be named said the sale was in the $11-million range.
Despite the dramatic loss in the building's value, people involved in the revitalization of North Hollywood hailed its purchase as a milestone for the community and its NoHo arts district.
The building's new occupants will have to eat lunch, noted Banks, a NoHo arts district coordinator for the Los Angeles Neighborhood Initiative. And they will probably patronize the funky mishmash of ethnic eateries, theaters, shops and coffeehouses lining Lankershim Boulevard. Perhaps they will move into the area, he speculated.
The Eclectic Cafe, half a block away from the building, has already begun its "Disney countdown," joked general manager Rena Upton. The eatery has increased staff, improved the wine list, remodeled the kitchen and added "a new heavy-duty stove with lots and lots of grill space" in anticipation, she said.
Even Glenn Hoiby, a neighborhood lawyer and frequent critic of the Los Angeles Community Redevelopment Agency, said the sale will be a benefit to the community. "An occupied building is usually better than an empty one," he said. "And Disney is certainly a good tenant."
According to CRA documents, the agency acquired the land in 1979 as part of the 740-acre North Hollywood redevelopment project. It was sold to Hewlett-Packard at a $2-million discount to encourage development in the blighted area.
The CRA's North Hollywood office was "a catalyst" in the most recent sale of the building, he said. "This is an example of precisely what the CRA is there to do," said Don Spivack, a CRA director of operations. "Bring economic development and vitality into an older community."