Hollywood May Finally Make Its Comeback
Slipping his dark Jaguar through midday traffic on Hollywood Boulevard, Jerry Schneiderman waved scornfully at the surrounding streetscape, a dreary vision of T-shirt and souvenir stores, tattoo parlors and outlandish wig shops.
“Look at this,” he fumed. “Garbage, garbage and more garbage. You tell me, is this street ready for a Gap?”
Schneiderman, a commercial developer, has an ax to grind over the city’s long-stalled efforts to redevelop Hollywood. He has a point. Although the city has spent more than $130 million in redevelopment money trying to rebuild the area, the view out Schneiderman’s window is nobody’s idea of a community in ascent.
But this is Hollywood, where appearances are not always what they seem. And behind a facade that could serve as a set for “Blade Runner”--tawdry storefronts, vacant theaters, dingy bars and neon-lit strip joints--something remarkable is happening.
Hollywood--”that screwy, ballyhooey Hollywood,” as Johnny Mercer put it--is being reborn, although not exactly the way planners envisioned.
Crime rates are plunging, property values are soaring, and some of the biggest commercial development projects in Southern California are underway. New restaurants and nightclubs are attracting celebrities and hipsters. And, perhaps most significant, Hollywood, the industry, is returning to Hollywood, the place, after decades of estrangement.
“We’ve seen just a major, major turnaround,” said Dave Gajda, a software designer who lives in the Hollywood Hills and owns a small office building on Cahuenga Boulevard in the heart of Hollywood. His building has been filled in the past few years with small companies working at the nexus between the entertainment and computer industries--the old and new Hollywood.
“When we bought our building 3 1/2 years ago, we were 95% vacant,” he said. Squatters were living there. It was filthy and dilapidated. Drug dealers, prostitutes and gang members owned the surrounding streets. “I was petrified to go outside,” Gajda recalled.
Today, the streets are relatively clean and safe, and his two-story stucco building has been transformed. Where squatters once slept in squalor, the young and hip now slouch in offices fueled by Intel and furnished by Ikea, creating the Hollywood of tomorrow.
“We’re 100% occupied,” Gajda said.
Something just as remarkable is happening in his neighborhood in the Hollywood Hills, near the Hollywood Bowl: Families are moving in. Recently, he said, the neighborhood decided to ask the city to put playground equipment in a local park. “Six years ago, there wasn’t one kid in our neighborhood,” he said. “Now there are dozens.”
Crime Is Down, Office Rents, Home Prices Are Up
Other signs of a turnaround:
* Violent crime dropped 38% in Hollywood from 1995 to 1998, compared to a 30% drop citywide. Property crimes dropped 42.5%, compared to 31.5% citywide.
* Office rents in the best commercial buildings have gone up as much as 40% in the last two years, from around $1.40 per square foot to as much as $2 a square foot.
* Residential property sales are up, too. For the first nine months of this year, home prices rose 3.8% in the flatlands on either side of Hollywood Boulevard, 10.5% in the Hollywood Hills, and 25% in the flats between Fountain and Melrose avenues.
* Retail leasing agents say they won’t commit to long-term contracts, so certain are they that retail rents are about to rocket skyward.
* TrizecHahn Development Corp. is midway through building a $385-million shopping and entertainment center at the corner of Hollywood Boulevard and Highland Avenue--a project that business leaders hail as the cornerstone of the Hollywood revival. The center will include a 14-screen movie complex and a theater to house the Academy Awards.
* Other projects include the recently restored Egyptian Theater and plans for an Imax theater next to Mann’s Chinese, a 12-screen multiplex next to the Cinerama Dome on Sunset Boulevard and a 10-screen multiplex at Sunset and Vine Street.
* Chris Breed’s Sunset Room supper club, opening this month, joins several other clubs--the Opium Den, the Garden of Eden, Lucky Seven--that are once more making Hollywood a hot night life destination. The Knitting Factory, a successful New York showcase for new jazz and alternative music, has announced plans for a Hollywood Boulevard branch.
* “The Lion King,” the hit Broadway musical, will open at the Pantages Theatre next year, a giant step toward reestablishing Hollywood as the city’s live theater district.
The revival, after decades of decline, is enough to make people a bit giddy.
“Hollywood is in its renaissance, its resurrection. . . . Like a phoenix, we’ve risen from the ashes!” said Manuel Felix, a waiter for the past 24 years at the Musso & Frank Grill, Hollywood’s oldest restaurant. Here, where the charcoal grill is still stoked with a shovel, the Swing Era crowd has been joined lately by young neo-Swingers drawn to the classic martinis, if not to the liver and onions.
In reality, Hollywood remains a work in progress.
All the promise of revival has yet to attract any big-time retailers, with the sole and much-touted exception of the Disney Store, which staked out a site in the restored building where Disney runs the El Capitan Theatre a couple of doors down from a tattoo parlor.
David Malmuth, the developer of the huge Hollywood and Highland project, acknowledged that he has yet to sign a single retail tenant, although he insists he has tentative agreements with some big names.
While it’s true that Hollywood has been cleaned up, drug dealers still haunt some back streets and the homeless have established a new beachhead outside the Bank of America at Sunset and Vine.
Although tourists continue to stream into Hollywood, an estimated 20 million a year, most find that there’s little to do once they’ve seen Mann’s (nee Grauman’s) Chinese Theatre and the Walk of Fame.
“You know, they come to Hollywood with their mind’s eye image of this very special, magical place that has the ability to create stories that move them,” Malmuth said. “And they expect that when they come here, they’re going to get that same emotional impact that they get from some of the great things Hollywood creates. And it’s so lacking right now. I think it’s sad.”
But then, there’s long been a cleavage between Hollywood and Hollywood.
As far back as the 1920s, major studios began fleeing Hollywood for surrounding areas--Burbank, Universal City, Culver City. Of the big studios, only Paramount remains in Hollywood, and it is tucked away in a corner that few tourists ever see.
What remained in Hollywood was the nuts-and-bolts end of the film industry--costume warehouses, lighting and prop shops, post-production studios and the like. Even some of those companies began to flee as Hollywood turned seedier and more dangerous in the 1970s and 1980s.
In 1986, the city of Los Angeles announced the launch of a Community Redevelopment Agency project in Hollywood budgeted at nearly $1 billion over 30 years to wake the neighborhood from its night of the living dead.
Donna DeBruhl-Hemer, the current manager of the project, said it has been a catalyst in the community’s revival. Critics say the agency has spent money profligately--on such disastrous projects as Hollywood Galaxy, an ungainly and mostly unoccupied shopping and entertainment development near Mann’s Chinese. The Galaxy is now slated for a major make-over.
By most accounts, Hollywood bottomed out around 1992 to 1994. Like the rest of the city, it was stunned by the riots that followed the Rodney King verdicts and by the Northridge earthquake. The local economy was in the gutter. On top of all that, Hollywood was strained by construction of the Red Line subway, which at one point in mid-1995 caused part of Hollywood Boulevard to collapse.
The turnaround began sometime after the 1994 earthquake, which brought in a profusion of federal reconstruction dollars. That was abetted by the 1996 creation of the much-praised Hollywood Entertainment District, a coalition of business owners that hired cleanup crews and armed, private security guards to take back Hollywood Boulevard.
“The feeling was, if you could make Hollywood clean and safe, the private market would step in,” district director Kerry Morrison said.
Helped by a vigorous regional economy, the private sector has begun to reinvigorate the area, although much of the progress remains as invisible to the casual visitor as the fiber-optic cables that snake through the Red Line tunnel and have helped lure high-tech companies.
The renewal is being played out first and foremost in the office rental market. Increasingly, small, creative companies are finding that Hollywood suits them. It is centrally located, relatively cheap and has the grit and edginess many creative people crave.
“You’re not really seeing the suits,” said Rob Langer, a partner in Meringoff Equities who does commercial leasing in Hollywood. “You’re seeing these young, hip, kind of computer animation . . . ‘dot-com’ type people, who are making tons of money.”
Some larger players are stepping in as well. Jay Silverman Productions has moved into space on Cahuenga Boulevard. Klasky Csupo, the animation company best known for “Rugrats,” the Nickelodeon hit, is renovating a building on Sunset and Ivar Avenue. A.C. Nielsen Co. has signed a lease for one floor of a large office building at Sunset and Vine. Fox is rumored to be near a deal for a large lease on Hollywood Boulevard.
“When I used to cold-call people two years ago and I’d mention Hollywood, they didn’t want to hear about it,” Langer said. Now, “Hollywood’s become a very chic place.”
Within two years, many people predict, Hollywood will be transformed.
The CIM Group, a development company that was heavily involved in the creation of thriving retail districts in Old Pasadena and at the Third Street Promenade in Santa Monica, is getting involved in Hollywood in a big way, with several major projects planned on Hollywood Boulevard.
“The potential and the inherent greatness of the street equals those other situations,” said John Given, a CIM vice president.
“It is a very complex district and a very complex environment,” he added. “And it is by all means not done. . . . But I think that when you look around and say, ‘Where is everything that should be getting aligned?’ [it’s] getting aligned to really bring this about.”
