Scientology's Hollywood Real Estate Empire

The biggest owner of historic buildings in Hollywood, the Church of Scientology has earned a good-neighbor status as its acquisitions continue -- even as questions about its motives abound.
Neil Webb

"I've gotta go; I've gotta go."

It's June 23, and blogger Marty Rathbun and I are wrapping a lengthy telephone interview about the historic Hollywood real estate holdings of the Church of Scientology. We're exchanging end-of-conversation pleasantries when a group of people arrives across the street from his waterfront home in Ingleside on the Bay, Texas, hastening the end of our chat.

"They've got five guys in a golf cart with a picture of my face with a cross-out signal in front of it right now -- across the street right now," the ex-Scientologist shouts, his words tumbling out, quick and disorienting.

"I've gotta go," he repeats with increasing urgency. Then Rathbun hangs up.

Rathbun, a former high-level Scientologist who left the church in 2004, had just returned from the supermarket with his wife, Monique, and was unloading groceries when the golf cart appeared. Five days later, we reconnect, and Monique shows me video of the incident. The golf cart is emblazoned with an image of her husband's head atop the body of a squirrel. In the illustration, Rathbun's smiling face is positioned inside a red circle with a diagonal line through it. Some in the group of five wear matching light-blue T-shirts and black hats that read "Squirrel Busters" in block lettering. One man has a video camera strapped to his head.

On that day, Rathbun explains, he had called the sheriff and waited, eyeing the group -- even recording them with his camcorder. By the time a squad car arrived, the three men and two women were gone.

Rathbun says it wasn't the first time he has been visited by the group, which has said it is making a documentary about Rathbun under the Squirrel Busters Productions banner. (The church denies affiliation with Squirrel Busters, and there is no documentation that shows the group is a unit of the church.) A "squirrel" is a derisive term used by Scientologists to describe a former adherent who has "perverted" the religion.

The group's appearance in front of Rathbun's home during our interview appears to have been merely a coincidence. The conflict between Rathbun and the Squirrel Busters is well-documented; it has been covered by publications including the Corpus Christi Caller-Times and the San Antonio Express-News.

Clearly, writing about the church is not a simple task because many people have strong opinions, even when the topic is seemingly innocuous. The various controversies that follow the organization -- which draws impassioned feelings from members and non-members alike, themselves immersed in their own dramas -- are often interwoven.

And so the reporting of an ostensibly straightforward story about the church's vast real estate portfolio in Hollywood, where it is a major stakeholder and owns properties valued at $400 million, leads to bizarre interviews like the one with Rathbun, which may be just part of the collateral when reporting on Scientology.

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The Church of Scientology owns, by most accounts, more historic buildings in Hollywood than any other entity and is one of the community's biggest property owners. Some of its holdings are obvious: The castle-like Celebrity Centre International on Franklin Avenue and the mammoth blue compound on Sunset Boulevard that houses the organization's West Coast headquarters are veritable Los Angeles icons.

In total, the church owns seven historic Hollywood properties worth about $300 million, part of a Hollywood real estate empire of 26 properties, according to real estate experts. It is a portfolio that began to take shape in the early 1970s under the direction of Scientology founder L. Ron Hubbard and continues to grow. These days, a small group of high-level church staffers based here comprises the organization's real estate team and oversees the assets while planning a global expansion.

Over the years, the church has transformed its Hollywood properties -- which include a former luxury hotel, apartment building, church and hospital -- into facilities that house everything from classrooms and chapels to production space, a health spa and an upscale French restaurant. Most recently, in April, the group closed on a $42 million purchase of the historic but ramshackle 4.5-acre KCET Studios on the edge of Hollywood, a complex that dates to 1912 and was once home to Monogram Pictures and Allied Artists. (The church will use it as a center for its various media endeavors.)

PHOTOS: Scientology's Historic Hollywood Holdings

Despite the controversies, and there are several, the church also has many fans. City officials, preservationists and scholars alike call the church a first-rate caretaker of historic Hollywood. Preservationists including Linda Dishman, executive director of the Los Angeles Conservancy, and city officials including Councilman Tom LaBonge and Ken Bernstein, manager of the Office of Historic Resources, roundly offer praise. "They have provided for positive adaptive-reuse projects in Hollywood, giving new life to many of the Hollywood structures," says Bernstein, "and they have largely preserved the significant historic and architectural features of their Hollywood buildings." Adds Richard Adkins, president of Hollywood Heritage, a preservation group: "They seem to always have the vision of being good stewards and neighbors." The church even has been honored: The California State Legislature has recognized its real estate work, and the Pasadena Historic Preservation Commission has given it an award, as has the Los Angeles Business Journal.

And the companies that work with the church on these dealings are anything but fringe -- they're major players in real estate, including architecture firm Gensler, which is designing the proposed NFL stadium in downtown Los Angeles, and real estate services firm CB Richard Ellis Group, which boasts more than 400 offices in more than 60 countries.

All the while, many in Hollywood remain unaware of the church's efforts. "I don't think people would even know they are real estate holders," says George Abou-Daoud, who owns area eateries including the Mercantile (adjacent to a property owned by a church affiliate housing a museum named Psychiatry: An Industry of Death).

The church maintains or is in the process of rehabilitating other properties in the L.A. area, including a new center in Pasadena and forthcoming projects in Inglewood and Santa Ana. But Hollywood is its focal point. After four decades, the church, founded in 1954 in Los Angeles, has deep roots in the area: It began buying properties under the direction of Hubbard, who saw potential in the blighted, undervalued area and wanted to save neglected buildings. It bought at low prices during the 1970s and '80s, making the group both pioneer and bargain hunter. To this day, the church does not take out mortgages, claiming it relies on donations from parishioners.

But the church's stewardship of its historic buildings is just one part of a long-standing and sometimes edgy relationship with the Hollywood community.