NBCUniversal Cancels Plans for $750 Million Office Development
NBCUniversal has pulled the plug on a planned 1.5 million-square-foot production and office project that would have been built atop a subway station in Universal City, according to a Jan. 3 SEC filing by developer Thomas Properties Group.
The two-phase development, which was to be called MetroStudios@Lankershim, would have been built on Lankershim Boulevard across from Universal Studios. Publicly-traded Thomas Properties, owner of downtown Los Angeles office properties City National Plaza and 800 South Hope, would have built the $750 million project for NBCUniversal, which planned to occupy it as the anchor tenant.
"In light of NBCU's changing requirements for office and post-production space, the planned MetroStudios@Lankershim project was not considered economically viable at this time," the filing said.
The cancellation of the project is the most significant real estate decision made by management since Comcast completed its purchase of a majority share of NBCUniversal from General Electric in January 2011.
NBCUniversal and Thomas Properties did not immediately return phone calls seeking comment.
As part of the termination of the two companies' agreement, NBCUniversal has paid the downtown L.A.-based developer a $9 million fee, according to the Thomas Properties corporate filing.
The long-planned project is separate from NBCUniversal's Evolution Plan -- a 20-year, $3 billion effort that would transform the 391-acre Universal Studios backlot with housing, upgraded studios and a revamped CityWalk shopping mall, among other features. That plan remains in place.
MetroStudios@Lankershim would have included more than 1 million square feet of offices, 300,000 square feet of production space and 25,000 square feet of retail space built in multiple buildings situated on 14 acres above the MTA subway stop at Lankershim and Universal Terrance Pkwy -- with the tallest tower standing at 24 stories. At one point, the development was to include the West Coast headquarters of NBC News. The project was slated to open by 2017, though initial projections called for completion of the first phase by 2011.
Developer Thomas Properties ran into opposition from homeowners groups in Studio City and other nearby communities that raised concerns over traffic created by the development, which was announced in 2007. In 2008, the Los Angeles Business Journal reported that Thomas Properties planned to spend $35 million on traffic improvements, including a "$22 million enhancement of the Hollywood Freeway’s on- and off-ramps" at adjacent Campo de Cahuenga Way.
The corporate filing indicated that the agreement between the two companies was terminated on Dec. 19.
Real estate blog Curbed L.A. first reported the cancellation of the project.