Entertainment Boom Is Busting Out All Over

Homeowners on the tree-lined streets just east of Walt Disney’s studio complex here get an earful from the entertainment giant. Electric saws, hammers, metalwork and yells from hard-hat construction gangs fill the air.

Signs alert neighbors to the “Hours of Noise-Generating Construction Activities” from 7 a.m. to 10 p.m., Monday through Saturday. Also posted is a phone number at the city of Burbank’s building division for complaints about excessive off-hour noise.

The construction activity and the accompanying din are occurring because Disney is hustling to finish a five-story, 273,000-square-foot office building, plus two new sound stages and a 50,000-square-foot production support center, all by next year. It is one piece of the massive entertainment expansion boom that has swept the Valley and greater Los Angeles and it’s helping to jump-start the economy: The 121,000 new entertainment jobs in Los Angeles County since 1988 have nearly filled the gap left by the gutting of 140,000 aerospace jobs.

Even with that surge, the entertainment business is frantically trying to keep from falling behind, as chronic shortages pop up in everything from sound stages to first-class office space.

So Warner Bros. and NBC in Burbank, and CBS in Studio City, all have expansion projects underway. DreamWorks, which is still uncertain about its permanent headquarters, already has plans for a Glendale animation studio that will employ 1,000 by early next decade. Meanwhile, DreamWorks has leased about 250,000 square feet of office space in the east Valley.

And the biggest local entertainment landowner, Universal Studios, with 415 acres, has unveiled a grand plan that would at least double its current building space in the next 25 years, with a flurry of sound stages, offices, shops, theme park attractions and resort hotels in a $2-billion project. Universal faces plenty of neighborhood opposition and must deal with many government agencies, but hopes to win all the necessary approvals by late next year.

What’s fueling this entertainment boom?

Part of it is the ongoing growth in cable and satellite TV, and video film sales. But the biggest new feeding ground for Hollywood is overseas. Hollywood’s foreign entertainment sales are now a $6-billion-a-year export business, the second-biggest export product in this country after commercial aircraft. All this trickles back here eventually in demand for more product, more space and more staff.

“This year, I turned away $8 million to $10 million in business” because sound stages were booked, said Michael Klausman, president of CBS Studio Center in Studio City. “We did a survey recently of 256 sound stages in the area, and only five were available.”

CBS has 19 sound stages in Studio City, and uses 10% of the space for its own shows. The rest is leased out to “Seinfeld” for NBC, to “Grace Under Fire” on ABC, and other shows.

It was different in 1991 when Klausman faced a 40% vacancy rate for sound stages. Since 1992, though, he’s turned away business. So he plans to build four more sound stages, in a $36-million project, in the next four to seven years.

Many of these entertainment behemoths are cash-rich, but land-poor. Walt Disney, with its friendly takeover of ABC, is now a $21-billion-a-year company. But in Burbank, where Disney set up shop in 1940, it owns only 44 acres, about the size of a nine-hole golf course. In recent years, the company has been building there to pad space--Disney’s new animation building, with 700 staffers, opened in 1994 next to the Ventura Freeway. But the company still needs more room.

Disney, always tight-lipped, won’t talk about its next big land deal. But city officials in Burbank are courting both Disney and DreamWorks to take on part of the old Lockheed Skunk Works aircraft factory site.

Warner Bros. is more land-rich than Disney, and it owns two parcels with 136 acres in Burbank. But it’s still squeezed for space. So Warner Bros. leased 120,000 square feet in Glendale for its animation division, with 500 workers, that just turned out the hit film “Space Jam” with Michael Jordan.

Dan Garcia, Warners Bros.’ senior vice president for real estate, has added 1 million square feet of structures, from parking garages to office buildings, in his five years on the job. And last year, Burbank approved Warner Bros.’ 20-year expansion plan that could add 3.3 million square feet of office and entertainment space.

“There is almost no likelihood” Warner Bros. will actually build that much, Garcia says. “But we wanted to protect our legal rights on our lot.”

Part of this uncertainty is a spillover from the ever-expanding overseas market.

“The discretionary income in Asia was zero a few years ago and it has jumped. And as we create channels in other markets, it eventually reflects back to growth in our home businesses,” Garcia says, and the need for more space to produce more product.

Government officials and economists have started touting the ‘90s entertainment boom as a relatively recession-proof industry unlike, say, aerospace.

“If we have 21 shows on TV and the next year we only have 10, obviously that will make a difference,” Garcia says. “But the big studios are cranking out so much product, that it’s hard to have a massive downturn. We could be down 10% in one year, and we’re built to handle that. But it’s unlikely we’d drop 55% in a year” like aerospace.

Clearly, the project with the greatest sweep, and the most opposition, is Universal Studios’ grand expansion plan.

Universal now has 5.4 million square feet of buildings on its property, and it wants to add 5.9 million square feet more with hotels, shops, theme park attractions, production and office space.

Although Universal says it will maintain a 50-acre greenery buffer zone and carve many new buildings into hillsides so as not to obstruct neighbors’ views, the project has already triggered intense objections.

Joan Luchs, a real estate agent who lives nearby and is a member of the North Hollywood Residents Assn., lampoons Universal for its constant noise and heavy traffic. Attendance at Universal Studios spurted to a record 5 million this year, plus the untold swarm of foot traffic that’s filled CityWalk since it opened in 1993.

As Luchs sees it, Universal now seeks carte blanche to build almost at will, and she warns the project would triple, not double, existing space, because Universal’s plan “does not include one foot for additional parking.”

If Universal’s grand plan does go through, she says, it would create a project three times the size of Century City, but without any public roads running through the site. She wants Universal to put in some thoroughfares to ease public traffic.

Universal counters that it will add a third visitor entrance to the park, but creating public roads on Universal’s property just won’t happen.

“This has been a private property for a long time,” says Lori Belateche, a Universal Studios spokesperson. “And we have a lot of stars here like Steven Spielberg. If we could not provide security, they would not come to work here.”

The first public hearing on Universal’s expansion plan is set for Jan. 15.