SPECIAL REPORT: * Many have failed to rescue the boulevard, but a man who helped save Times Square is . . . Hoping for a Hollywood Revival

The 1995 Hollywood Boulevard sinkhole was an inspiration of sorts for David L. Malmuth. Hollywood, he decided, could not fall much further. It was time to make plans.

“My reaction was, ‘This can’t get any worse,’ ” recalled Malmuth, a TrizecHahn Development Corp. executive who had learned a lesson in New York’s Times Square: When a place hits bottom, it is ripe with potential.

Three years after subway tunneling caused a short stretch of the boulevard to collapse like a souffle, Malmuth is hoping for a summer groundbreaking on his company’s proposed $385-million retail-entertainment complex next to Mann’s Chinese Theatre. Boasting everything from a D.W. Griffith-inspired grand arch to a theater for the Academy Awards ceremony, the two-block project has eclipsed other Hollywood redevelopment proposals in both ambition and expectation.

It is being touted as nothing less than the engine of community revival, a desperately needed antidote to the dreary tourist experience that leaves millions of visitors wandering in disbelief as they search for a Hollywood that hasn’t existed in decades--and perhaps never did.

The city is so eager for a Hollywood success story that it wants to place a major bet of public funds on the project, a risk-taking that in hindsight could prove folly or triumph.

The Community Redevelopment Agency, which over the years has poured $138 million into Hollywood with less than stellar results, plans to spend another $90 million of city money on the complex, by far its largest single investment in the district.

Called Hollywood and Highland after the intersection it borders, the project won instant prestige last month when the Academy of Motion Picture Arts and Sciences announced an agreement to move its internationally broadcast Oscars show there as of 2001.

To be sure, rhetoric about Hollywood’s imminent comeback is nothing new. It has periodically erupted for more than a decade, sometimes even on the same spot. Hollywood Promenade, a massive project planned next to Mann’s Chinese in the late 1980s, was portrayed at the time as the development that would spark Hollywood’s transformation. It was never built.

The TrizecHahn proposal must also clear several hurdles, most notably this week’s City Council vote on the hefty CRA subsidy.

Still, circumstances are conspiring in favor of TrizecHahn. The economy is strong. The real estate market is rebounding. The proposal has the enthusiastic support of Mayor Richard Riordan and Hollywood area City Councilwoman Jackie Goldberg, who have fought fiercely on other Hollywood issues.

And although homeowners groups have complained that traffic congestion from the complex will tie their neighborhoods into nasty knots, they are not massing against the project the way they have against past redevelopment proposals.

As a Walt Disney Co. development executive, Malmuth oversaw the New Amsterdam Theater renovation that played a vital role in the turnabout of Times Square from sleaze capital to vibrant entertainment center. He clearly wants to leave a similar imprint on Hollywood Boulevard.

“This doesn’t inspire anybody right now,” he said, waving his hand at a street that has been cleaned up in recent years but still has little more than T-shirts and trinkets to offer the hordes of tourists who naively pour into Hollywood every year. “It inspires them to leave and to feel like ‘Gosh, I’ve been ripped off.’ There’s a palpable disappointment. You can see and feel it when you walk that boulevard.”

A slender and intense 43-year-old, Malmuth started thinking about Hollywood after working on Times Square. The New York experience had convinced him that golden business opportunities lay in the rebirth of historic streets. For more than a year he drafted plans for Hollywood Boulevard and Chicago’s State Street.

But when he presented them to his Disney bosses, they passed.

Setbacks at Disney

“The reaction was: ‘Boy, these are really complicated, difficult projects. This is really much more about real estate development than it is about entertainment,’ ” Malmuth recalled recently as he sat in the TrizecHahn offices in the newly renovated El Capitan office building, across the street from the Hollywood and Highland site.

It was his second major setback at Disney. Earlier he had spent four years shepherding plans to build a mammoth waterfront theme park in Long Beach, only to have the company drop the idea in favor of a competing project in Anaheim.

This time, he would not let go of his vision. Malmuth left Disney in 1996, intending to start his own entertainment development company. At the same time, he was wooed by a subsidiary of Trizec-Hahn Corp., a multibillion-dollar, Toronto-based real estate company that wanted to branch into entertainment development. He joined the firm as a senior vice president and went back to work on Hollywood.

Malmuth will have a substantial stake in the profits if the project succeeds. But he seems driven by more than money. Individual Disney projects he worked on--the company’s whimsical animation building on its Burbank lot, its Anaheim skating rink--were all satisfying enough, he said, but more meaningful was watching Disney’s Times Square effort become a catalyst for revival of an entire district.

“I had an experience on 42nd Street that was for me extraordinary,” said Malmuth, who on a recent trip to New York found the once-dead street “alive, jampacked with people.”

“My feeling was: It’s really worth it.”

The challenge in Hollywood may be even greater.

Is it really possible to give tourists what they want when they’re in search of a myth? When most of the film studios packed up and left years ago? How do you create something that is not just an ersatz theme park experience under the Hollywood sign?

“It’s a very, very tough balancing act,” conceded Malmuth, a native Angeleno who remembers his trip to see “Goldfinger” at the Chinese Theatre as one of his first “grown-up” experiences.

“What we talk about in describing our ambition here for Hollywood Boulevard is to create a place that’s authentic.” He paused, acknowledging that the idea of creating the authentic is something of an oxymoron.

Still, he insisted, “I can give them enough of what they want, to feel they’ve gotten something genuine. You can’t pull the whole industry back to Hollywood . . . but what you can do is deliver authentic pieces of Hollywood, whether those be in production or whether those be an Oscar show or studios here with a presence that they don’t have anyplace else.”

To that end, along with restaurants, shops and a movie multiplex, the Hollywood and Highland project will include live broadcast studios, studio showcase stores, a theater for the Academy Awards presentations and a grand ballroom.

The theater was not in the initial TrizecHahn proposal. It evolved from an offhand remark by Bruce Davis, executive director of the academy. Malmuth had called him last spring to talk about the possibility of opening an academy museum or shop in the complex.

Since the academy doesn’t sell anything, Davis wasn’t interested in being a commercial tenant. But as he now tells it, Davis suggested “as sort of a half joke” that TrizecHahn build a theater to host the awards show. “It never entered my mind that they would take it very seriously.”

But Malmuth did just that, taking advantage of the academy’s frustration with the two spaces it has alternately used for years--the downtown Dorothy Chandler Pavilion, where rehearsal time has been in short supply, and South-Central’s Shrine Auditorium, where there have been people-flow problems.

TrizecHahn ultimately offered the academy something it found irresistible: a theater designed specifically for the logistically complex awards show, built at someone else’s expense.

Under the proposal going before the City Council, TrizecHahn will put up $20 million for the theater, and the city will contribute $30 million. The city will own the theater, along with a public parking garage that the CRA proposes to build beneath the project for $60 million.

The CRA expects user parking fees to pay for the garage. In a departure from the agency’s traditional reliance on property tax growth in redevelopment areas--which has been nonexistent for much of the decade--the CRA is turning to overall tax revenue from the project to pay off the theater debt.

Parking facilities are conventional municipal ventures. But a state-of-the-art, 3,300-seat, live broadcast theater is not.

A Way of Keeping Oscars in L.A.

City officials justify it as a unique addition to local entertainment venues and, most important, a means of retaining the Academy Awards show, which although bound to Los Angeles’ film capital identity, had been scouting other locations.

“When they started looking down at the Orange County Performing Arts Center, we wanted to make sure they stayed in Los Angeles,” said CRA deputy administrator Ann Marie Gallant, the agency’s lead negotiator on the project.

As for how the theater will be filled the rest of the year, Trizec-Hahn, which would operate the facility under a 99-year lease, has mentioned live theater bookings, special holiday shows and perhaps daily multimedia presentations for tourists.

Managers of other venues were circumspect in their comments about the potential competition. Asked if the academy theater was a good deal for the city, Rena Wasserman, general manager of the Wiltern Theatre, a few miles south at Wilshire Boulevard and Western Avenue, replied, “I don’t know.”

“There is more than enough [entertainment business] to go around for everybody,” she said. The question is whether the new theater will attract shows that fill the seats.

Sandra Kimberling, president of the Music Center Operating Co., which manages the Dorothy Chandler, was more enthusiastic. “I think the city can absolutely embrace it and be very successful with it,” she said. “The more the better.”

On the one hand sanguine about the academy’s upcoming departure--”We’ve never really been able to give them what they needed, nor has the Shrine”--she indicated that the Music Center has nonetheless tried to keep the awards show.

“It’s the Academy Awards. I don’t know what else to say,” she said. “The exposure for the Music Center reached people all over the world.”

The academy can escape its agreement with TrizecHahn if the theater doesn’t open by 2002, Davis said, but otherwise the membership is delighted at the pending return to Hollywood, where the first awards ceremony was held in 1929.

“People who work in the film industry have felt a little embarrassed in recent years about the fact that Hollywood has fallen on such hard times,” he said. “I think the reaction we’ve heard has been universal approval of the idea of taking the annual spectacle back into that area.”

At the same time that Malmuth was wooing the academy, he was avidly courting the Hollywood community.

“He’s been very sharp and very shrewd in terms of his approach to this project,” said Hollywood Chamber of Commerce Executive Director Leron Gubler. “They’ve gone out of their way to bend over backwards to listen. . . . Their PR people are everywhere.”

When an early drawing of the complex elicited groans that it looked too much like a theme park and not enough like a vital street-scape, the project architects, Ehrenkrantz Eckstut & Kuhn, kept drawing, tossing out offending elements and orienting the project more toward the boulevard.

The plans include such touches as a small orange grove at a tour bus drop-off, a grand staircase and courtyard framed by the Hollywood sign in the distance and an archway patterned after the one built for the Hollywood set of D.W. Griffith’s silent movie “Intolerance.”

Developer Wins Over Homeowners Group

When hillside homeowners associations grumbled that the often-clogged intersections along Franklin and Highland avenues would become impassable if the project was built, TrizecHahn started negotiating.

With its willingness to spend millions on traffic improvements in the area, including residential neighborhoods, the company has won over one major group, the Outpost Estates Homeowners Assn. It is still talking to the Whitley Heights Civic Assn. and the Hollywood Heights Assn.

“In broad terms, they got out into the community early on, and I think that has limited the community banding together in block opposition,” said Jerry Luedders, president of the Whitley Heights group, which wants sound walls and traffic restrictors installed.

Hollywood Heights residents are more critical. “We do think the project itself is too large,” said board member Diane Buck. “They’re trying to put too much in too small a parcel.”

And why, the group’s president, Joyce Breiman, wants to know, “is the city of Los Angeles thinking of giving $90 million to a multibillion-dollar corporation?”

The answer, of course, is that city officials hope TrizecHahn will finally make their Hollywood dreams come true.

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Hollywood Face Lift

A retail-entertainment complex would seek to revitalize a two-block area around Mann’s Chinese Theatre.