Star Quality : Economy: Proposed Disney campus in Glendale would cement area’s reputation as entertainment capital.
With more than bragging rights at stake, plans by the Walt Disney Co. to develop a new 125-acre “creative campus” in an aging industrial park here further cements the San Fernando Valley’s claim as the capital of the entertainment industry.
Anchored by the DreamWorks SKG animation studio on the east and the CBS Studio Center on the west--with Walt Disney, Warner Bros., Universal Studios and NBC in between--the Ventura Freeway (134) corridor in the east Valley has an unmatched concentration of entertainment industry production facilities and corporate offices.
“This is a pretty impressive roster,” said Jack Kyser, chief economist of the Economic Development Corp. of Los Angeles County. “This shows the Valley is the flagship.”
Disney announced Wednesday that it plans to convert the 113-acre Grand Central Business Center to a new industry center with dozens of new buildings, sound stages and a high-tech business center. With the new offices for Disney-owned KABC-TV Channel 7 adjoining the site and other parcels to be eventually developed, the project would total 125 acres.
The proposed expansion, which would begin construction in the next few years, should attract spinoff businesses to the region, according to business leaders and government officials.
“Disney already is the largest employer in the Valley, and has, over the last couple of years, signified their intent to increase their presence and employment in the Valley,” said Bill Allen, president of the Economic Alliance of the San Fernando Valley, which capitalizes on the region’s entertainment connections in its marketing campaign.
“I think this further reinforces this whole emerging image of the San Fernando Valley as the ‘Valley of the Stars.’ . . . It’s a very strong vote of confidence for doing business in the San Fernando Valley,” Allen said.
Disney executives said the company will build its “creative campus” on the former site of the Grand Central Air Terminal, the first major airport for the Los Angeles area. Disney has based its Imagineering division at the site since 1961 and now has 3,000 workers scattered in the center’s low-rise commercial buildings.
The project, which at this phase is more concept than concrete, was even praised by neighboring officials in Los Angeles and Burbank.
“When a company like Disney invests in a project of that magnitude in the region, it’s good for the region,” said Rocky Delgadillo, Los Angeles deputy mayor for economic development. “We think this is a positive signal, not just for the San Fernando Valley, but for the entire Los Angeles region.”
Added Burbank City Manager Robert R. “Bud” Ovrom: “The development at Disney and Warner Bros. has been a tremendous boost for our economy. Now it’s expanding into Glendale, and that’s beneficial for both of us.”
The only note of caution came from some real estate experts, who said that the time frame for the project--it won’t be open for occupancy until 2004, with a build-out of up to 15 years--means people should not expect an immediate payoff. “We’re four years away from [occupancy],” said Patrick Church, a broker with CB Richard Ellis who tracks real estate trends in the area that includes Burbank, Glendale and Pasadena. “Between now and then, a lot could happen.”
In the meantime, civic boosters and others have begun to calculate the ripple effect of the planned expansion--the most tangible being the increased wealth that will probably flow into the region.
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The Valley Economic Alliance estimates that the Valley already is home to more than 60,000 jobs directly related to the region’s major studios and entertainment companies. That does not count the back-shop workers who do everything from set design to costumes.
“Hollywood doesn’t have anywhere near that number,” Allen said. “We have four times as much economic impact, as measured by payroll and vendor expenditures.”
And he noted that the industry is well-known for its high-paying jobs, meaning a potential business increase for area retailers and restaurants.
Real estate experts noted that industry workers, from producers to grips, tend to live close to work because of the long hours they put in. That could translate into a boost in residential real estate values in the southeast Valley, already one of strongest sub-markets in the Valley.
Barry Greene of Century 21-Greene Realty in North Hollywood called the Disney development good news for the Valley’s improving real estate market.
“Residential real estate values have gone up tremendously in the past six months,” said Greene. “Properties surrounding the Disney complex will increase in value again.”
“It’s going to bring more people into the community. And depending how far they travel, they probably will decide to relocate in the East Valley: North Hollywood, Glendale and Burbank.”
Despite the heft of Disney’s name, real estate experts did not think the proposed development would siphon off tenants from other areas in the Valley or that it would leave developers unwilling to pursue future industry-related projects.
J. Allen Radford, the Santa Monica-based developer who is looking to build his own entertainment-campus of offices and sound stages in North Hollywood, said he wasn’t worried about the competition from Disney.
And John Borganski, vice president of Pac Ten Partners, which is still seeking tenants for its Glendale Plaza tower, said Disney’s move only reinforces his faith in the area.
“A commitment by a company of the quality of Disney reaffirms the strength of the Glendale business community and the business environment,” said Borganski, whose building stands 35% leased. “As the owner of a major office business, we’re encouraged to see another significant commitment to the community.
“We would hope to benefit from this, either directly or indirectly.”
The sound stages in the new development would also offer direct competition to CBS Studio Center, which leases out many of its stages to independent production companies.
Michael Klausman, president of CBS Studio Center, acknowledged that he would face new competition in the Disney complex, but added, “I wish them well. Yes, they’re competing, but that makes me feel I’ll have to work all the harder to get the business that may want to go there.”
Valley Studio Corridor
Sources: City of Burbank; CBS; Disney; DreamWorks; NBC; Universal Studios; Warner Bros.
