Compromise on Universal’s Plan

When Los Angeles City Councilman John Ferraro and county Supervisor Zev Yaroslavsky called on Universal Studios last week to dramatically scale back its massive expansion plans, the two politicians were playing their natural role in the bureaucratic dance of land-use give and take. Universal wants to spend $3 billion over the next 25 years to double the size of its Universal City entertainment complex. Ferraro and Yaroslavsky, who represent the area, sided with residents and called on Universal to shrink the project by 40%. In the end, the project probably will end up somewhere between Universal’s dreams and the demands of those in the affluent area who would sharply limit change.

Clearly, the project has merit. Universal wants to create the first overnight tourist resort in Los Angeles--a complex of hotels and entertainment venues--in addition to expanding its production facilities and office space. Near the northern end of the Metro Rail subway, the complex is the kind of development necessary to make rail transit work. Also, Universal projects that the expansion would add $1.6 billion a year to the local economy and $25 million in new city and county tax revenues.

But just as clearly, Universal’s proposal to more than double its current 5.4-million-square-foot entertainment complex would have tremendous impact on the neighborhoods that surround the 415-acre property. Constrained by geography that makes street and freeway expansion virtually impossible, traffic surely would worsen, particularly on the Hollywood Freeway and along Barham Boulevard. Neighbors also worry about noise from an expanded theme park and added CityWalk-style attractions that would keep pleasure seekers on the property long after nightfall.

Although mum so far on Ferraro and Yaroslavsky’s recommendations, Universal ought to reduce the project before it comes before county and city officials on July 2. Perhaps most problematic for Universal is Ferraro and Yaroslavsky’s request that the theme park component of the expansion be eliminated. Unlike the movie business, with its net margins of about 5%, theme park operations can produce margins of 10%. But at what cost to neighbors? Ferraro and Yaroslavsky made clear that they support expansion of Universal’s production facilities. But the theme park should not grow as much as Universal would like.