"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.
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.)
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.
"The fact they are buying all of these expensive and historic properties -- it is not surprising people are going to be a little bit alarmed by that," says Hugh Urban, a comparative religions professor at Ohio State University who studies the organization. "When you couple that with statements Hubbard and Scientologists have made about building a new civilization, it is not surprising that people would be at unease."
Among the hot-button points: Scientology's designation as a religion exempts the group from paying some property taxes on buildings used for spiritual purposes (affording the church an annual savings of at least hundreds of thousands of dollars); the belief by Urban that the group has purchased the historic properties simply to imbue itself with historical significance; the claim by defectors that the historic-building program is simply part of a public relations and marketing campaign designed to bolster the church's ranks of celebrity adherents (there are many) and distract from the group's controversies; and issues raised by defectors about Scientology's labor practices as they relate to the restoration of historic buildings.
Over the years, several publications, including The New York Times, the Los Angeles Times, the St. Petersburg Times and Time have addressed the implications of the group's tax-exempt status and labor practices. Most recently, a lengthy New Yorker story on Oscar-winning director and screenwriter Paul Haggis' decision to leave Scientology explored both topics. The piece by Lawrence Wright cited defectors who described work being done by the church's controversial Rehabilitation Project Force program, whose members in the past worked on some construction and renovation projects.
For this report, three defectors agreed to share their stories and discuss their beliefs about the group's Hollywood holdings. Some claim to have played key roles in managing the church's real estate portfolio and worked on projects in Hollywood. "The buildings, that whole thing, it's all about image and being immune from any type of culpability," says Rathbun, 54, who was part of the organization for 22 years before leaving seven years ago. He now counsels ex-Scientologists and documents those efforts on his blog.
The church thoroughly defends its real estate program. The organization answered nearly every question asked of it, often in lengthy written statements. It also sought to discredit defectors, terming them "defrocked apostates." But the church also allowed this reporter to spend a late-June day with four members of its real estate team -- visiting facilities in Hollywood, Pasadena and Commerce, Calif. -- in an effort to explain the size, scope and sophistication of its operation. The revealing seven-hour tour included stops at five properties. And during the course of several wide-ranging interviews, conducted via e-mail and telephone, spokesmen Tommy Davis and Bob Adams defended the group's real estate practices, addressed issues of labor and taxation and explained the church's interest in Hollywood's historic properties.
Says Davis, whose mother is Oscar-nominated actress Anne Archer, also a Scientologist, "Anybody who is involved in Hollywood and is doing something to make a difference knows what the Church of Scientology has done for decades."
There is no single -- or simple -- explanation for the church's interest in Hollywood. The church says it entered the market because it offered good value and a chance to restore downtrodden properties, and Hollywood is conveniently located in a region filled with Scientologists.
Scientology is known for its celebrity converts such as Tom Cruise and John Travolta. The religion is partly aimed at those in creative industries, including actors, writers and musicians. And the church makes good use of its connections in the entertainment business, offering, for example, acting classes and industry seminars at the Celebrity Centre. Events in July include "How to Get an Agent, How to Get Work" and "How to Get Cast for the Part."
Tom De Vocht, who was with the church for 29 years and claims to have overseen its real estate program from 2001 until just before his departure from the organization in 2005, says the group's interest in historic properties is a PR play. Internally, the real estate program is meant to prove that the church is "expanding and that things are going great." And it is designed to market the religion to the wider world, he says, adding, "It is not resulting in anything except for beautiful buildings."
Adams disagrees. "The only explanation as to how we are doing it, and why, is the fact that Scientology is expanding and growing like never in history," he says. (The church says De Vocht mismanaged church construction projects and overstated his role within the church's real estate program. De Vocht denies these claims. "That is a totally manufactured, made-up thing," he says.)
Because the church proselytizes, a high-traffic neighborhood like Hollywood is important, according to Dakota Smith, former editor of Curbed L.A., a real estate blog that regularly covers the group. "They are trying to get people off the street -- Hollywood has a lot of new arrivals," says Smith, now a reporter at the Los Angeles Daily News. Indeed, the church owns four historic buildings situated on the roughly mile-long stretch of Hollywood Boulevard that starts at La Brea Avenue to the west and ends at Vine Street to the east. That section of the boulevard teems with tourists and is home to plenty of fresh Los Angeles transplants, functioning as the city's Times Square equivalent.
Ohio State professor Urban believes that Scientology's interest in historic properties is part of a strategy to help legitimize the religion started by a group of devotees of Dianetics, Hubbard's self-help guide. "If you are trying to establish yourself as a religion and give the appearance of authority, you want to buy up properties that give it that historical weight," says Urban, whose forthcoming book, The Church of Scientology: A History of a New Religion, will be released by Princeton University Press in August.
Davis dismisses Urban's notion: "That is an interesting concept, but it has never crossed our minds."
Davis does, however, acknowledge the significance of Hollywood to the organization. Part of Hubbard's interest in the community and its landmarks was its importance within L.A., home to the largest concentration of Scientologists in the world -- roughly 250,000 parishioners out of about 10 million worldwide, according to Davis. (The U.S. Census Bureau, as of 2008, reports there were only 25,000 Americans who identified themselves as Scientologists. Davis says the methods used to procure this data make the figure "entirely inaccurate.")
THE CELEBRITY CENTRE
In the 1970s, Hubbard, Davis says, noted the "physical blight and social problems" of Hollywood but "believed the area would come into a period of revitalization." The church's purchase of property in Hollywood was the next phase of Hubbard's long-running association with the area. Before becoming a religious leader, Hubbard, who died in 1986, was a pulp and science fiction author who frequented the community. During the 1940s, the Tilden, Neb., native conducted research for Dianetics from a Sunset Boulevard office, and in 1950 -- the year the book was released -- an office of the Hubbard Dianetic Research Foundation opened on Hoover Street.
The group made its first historic Hollywood acquisition in 1973, scooping up the landmark Chateau Elysee, which had been slated for demolition when the church purchased it for $1.5 million. It is now worth upward of $75 million, according to real estate sources, and serves as the church's Celebrity Centre. The church completed a lengthy renovation of the 5930 Franklin Ave. property in the early '90s; it now includes religious facilities, a hotel for spiritual retreats, a health spa and the French restaurant Renaissance. Auditing, a type of spiritual counseling that involves an electronic device called an E-Meter, is performed there. The fanciful property, formerly a hotel and apartment building, is replete with turrets, drawbridges, formal walking gardens and a pergola.
The Celebrity Centre was built to cater to members of the flock in the fields of arts, sports and government. It was the first of several such facilities opened around the world. "Gaining celebrity endorsement is a key strategy for Scientology expansion," says Amy Scobee, who joined the church in 1979, left in 2005 and was an executive in the Celebrity Centre organization. "Celebrity Centres were created to specifically disseminate to and cater to celebrities and artists because of the influence they have on the population."
Adams says that celebrity adherents are not used for "marketing" of the church. "They are parishioners like any other Scientology parishioner," he says.
(The Hollywood Reporter asked the church for comment from several celebrity adherents. Ultimately, the church provided THR with statements from three actors: Nancy Cartwright, Danny Masterson and Erika Christensen. Each praised the church for its real estate program.)
Following the purchase of Chateau Elysee, the group acquired a handful of notable properties in short order: the former Christie Hotel (1974) and Cedars of Lebanon Hospital (1976). Others were added in the 1980s and '90s, including the Hollywood Guaranty Building and the former Hollywood Savings and Loan building. While some are deemed merely to have historic character, many are listed on historic registers, affording them protection from demolition or significant alteration. The group and its affiliates also own non-historic properties including nondescript apartment and office buildings, a recording studio in Silver Lake and the Sunset Boulevard property that houses the anti-psychiatry museum.
TOUR WITH SCIENTOLOGY
The landmark Guaranty Building was swarming with activity on a recent afternoon. Within a matter of minutes, a scruffy homeless man shuffled past, followed by a woman laboring with a tandem stroller and a trio of backpackers who trudged past the 12-story tower engrossed in their guidebooks, oblivious to the building that once housed the offices of Charlie Chaplin, Rudolph Valentino and gossip columnist Hedda Hopper.
Amid the throng of tourists that meandered the boulevard, a clutch of uniformed men approached the building at Hollywood Boulevard and Ivar Avenue and made a sortie for the entrance of the tower, which features a stunning facade of columns and brick. Moments later, a woman emerged, toting pamphlets. On cue, a family ambled up, and though the brief conversation appeared pleasant enough, no, the tourists would not be stopping in for a visit to the L. Ron Hubbard Life Exhibition.
The historic 6331 Hollywood Blvd. building, constructed in 1923, houses ecclesiastical management offices and the Life Exhibition, a museum that venerates the Scientology founder. The tower looms over a neighboring property owned by the church, a drab two-story building that is hardly noticeable next to the Beaux Arts masterpiece. But in terms of the church's real estate operation, that nondescript (and non-historic) two-story building is far more important.
The church's real estate brain trust works out of the squat, unremarkable building, called the Hollywood Guaranty Building Annex. It is from this facility at 6349 Hollywood Blvd. that Bob Wright, the church's international construction supervisor, and Laurence Guenat, international senior designer, direct a staff of about 40 that designs, plans and oversees projects around the world. The church's real estate leadership team also includes Alan Nebeker, 31, senior project manager, and Mollie Hoertling, 35, executive vp project management.
The foursome led this reporter on the daylong June tour of the church's facilities. Wright, 42, and Guenat, 41, projected confidence -- they appeared to be natural leaders. Both have worked for the church for more than 20 years. They addressed questions directly and in detail, often with a smile. They wore matching frameless sunglasses adorned with decorative jungle cats on the temple arms.
They outlined the typical process the church goes through when acquiring a property. Often, a local arm of the church will discover a building it believes could work for the organization and submits it to the real estate team. In other cases, the professionals identify buildings that might be suitable for acquisition. After reviewing prospective deals, the real estate leadership team takes projects to the church's board of directors.
The church does not have an in-house broker; instead, it works with agents on a case-by-case basis. One of the church's mainstay commercial agents in Los Angeles is John Repstad of Binswanger Realty Advisory Group Inc., who represented the church in the KCET purchase. He declined comment.
Once a building has been acquired, Guenat and her team create initial designs and computer renderings, which Gensler uses to prepare construction documents. The San Francisco-based company, which designed the CAA headquarters building in Century City, has handled 18 projects for the church during the past few years -- including eight in Southern California -- and has several in progress. It began working with the church in 2006. Tommaso Latini, a Gensler principal who heads the company's team that works on the Scientology projects, praised the church for understanding "the importance of historic buildings."
After the design is complete, Wright turns over the project to CB Richard Ellis, which handles construction management, contract negotiations and hires contractors. The church started working with CB Richard Ellis in 2009. "The church has a well-deserved reputation as an excellent steward of historic buildings, respectful of the heritage of the properties they acquire," the Los Angeles-based company said in a statement.
During the period in which the organization acquired the bulk of its historic Hollywood real estate holdings, it was embroiled in a years-long battle with the federal government over its status as a religion. The quarter-century struggle with the Internal Revenue Service ended in 1993, when Scientology won recognition as a tax-exempt nonprofit organization. The benefits are clear: In Hollywood, the church saved more than $200,000 last year in property taxes on its historic buildings. Nearly two decades after being classified as a tax-exempt religion, the issue persists. "That's the question around Scientology from its inception: Is this really something about spiritual development and religion, or is it an economic scheme and a financial loophole?" says Urban. (He notes that the Catholic Church, itself with vast land holdings dating back centuries, would also be fodder for a discussion.)
Barry Wilner, owner of Prizzi's Piazza, a recently shuttered restaurant that was located across from the Celebrity Centre, takes issue with the church's tax-exempt status. Although Wilner believes the organization has done some good for the community -- noting that the church's substantial security presence is a crime deterrent -- he feels the group should not be exempt from paying property taxes. "I think it's a horrible thing to have places that take money from their parishioners and members and don't give back to the community," he says.
But Davis notes that the organization is an active member of the community, committing funds and resources to local groups and organizations such as the Hollywood Arts Council, the Hollywood Entertainment Museum and the Hollywood Beautification Team. "We've raised literally hundreds of thousands, if not millions of dollars," he says.
The Los Angeles County Assessor's Office provided THR with assessment information on the church's historic Hollywood properties. The church does not have exemptions on two of the seven: the KCET Studios (owing to its recent purchase by the church) and the Christie Hotel. But the remaining properties have exemptions of varying amounts, depending on a determination by the assessor's office of what percentage of each building is used for religious purposes and is therefore exempt.
According to data from the assessor's office, the church paid $43,359 in property taxes on the five buildings last year. Without the exemptions, it would have paid $265,650 -- good for an 84 percent reduction in property tax, or a savings of $222,291. The assessor's office did not supply THR with tax data on the church's 19 non-historic properties in Hollywood; these might also be entitled to property tax exemptions.
GETTING IT BUILT
In the past five years, Scientology has purchased 62 buildings worldwide. And the organization has another 16 historic or notable properties in various stages of completion. The expansion is part of a push by the church's ecclesiastical leader, David Miscavige, to open better facilities, called "Ideal Orgs," around the world. The campaign began in 2004. Miscavige was said to be out of town and unavailable for comment.
At least a portion of the empire has been built by Scientologists themselves. It's a topic of great controversy for the church. Labor issues were a focus of the New Yorker story and newspaper reports, including an award-winning series by the St. Petersburg Times from 2009.
While it is not illegal for a religion to employ its adherents as a labor force, it is somewhat unorthodox for a religion to require -- or encourage -- its flock to submit to manual labor. (Some groups, such as monastic Christian communities and Hindu and Buddhist yoga organizations, ask their members to perform various kinds of labor or service, Urban says.)
Questions about Scientology's labor practices center on the Rehabilitation Project Force, a church group for wayward members of the Sea Organization, a 10,000-person religious order. Rathbun, De Vocht and Scobee say the RPF has participated in the maintenance or restoration of the organization's historic Hollywood buildings. In response to this and other claims, the church has sought to discredit the trio. The church attacked the credibility of the defectors, focusing partly on their alleged personal transgressions. It sent THR several sworn declarations from Scientologists who rebutted some of the defectors' claims. But outside observers also shared their stories about the RPF's work on historic buildings.
J. Gordon Melton, a professor of American religious history at Baylor University, says that while conducting a study of the RPF in the mid-1990s, he observed members of the group installing drywall at the Celebrity Centre and laying bricks on L. Ron Hubbard Way, the street that fronts the group's West Coast headquarters, which is officially named Church of Scientology Western United States. "The RPF people just saw it as part of their program," says Melton. "The negativity tends to be, 'I either like this or I don't in terms of Scientology,' and then things tend to fall in place. There were a number of people who got into the RPF program and said, 'This is BS and I am out of here.' They came away with a negative view of the program."
Rathbun says that in the 1980s and '90s, the RPF was used for work on the West Coast headquarters and the former bank at 7051 Hollywood Blvd. Such labor, which Rathbun termed "coercive," included installing floor tiles and doing electrical and plumbing work. Rathbun, the onetime inspector general of Scientology's Religious Technology Center, which controls the church's trademarks, says he reported directly to Miscavige. (The church says that Rathbun had no involvement in its real estate program and is not credible; Rathbun says that there were instances in which he was directly involved in the real estate operation and also was privy to it because of his leadership role within the organization.)
Scobee, who left the church in 2005 after 26 years of service, participated in the RPF four times. In her self-published book, Scientology: Abuse at the Top (2010), Scobee writes that she received a $7 weekly allowance and that during a two-year period she averaged four hours of sleep a night. Later, when Scobee was an executive with the Celebrity Centre network, she claims she oversaw renovations of the Chateau Elysee and claims she used some RPF laborers for demolition, landscaping and electrical work. (The church says that Scobee was not involved in the renovation of the property and was dismissed from the church for gross malfeasance; Scobee says that her work on the restoration of the Chateau Elysee included daily inspections of the project and the organizing of personnel who worked on the renovations.)
Adams says that in the past, before the creation of the Ideal Orgs program in 2004, "church staff and RPF would, from time to time, assist on construction or renovations." But he says that is no longer the case, in part because of the large scale of Scientology's ongoing building program.
"The RPF does not work on any of our construction projects, historical or otherwise, in Hollywood or elsewhere," Adams says, adding that it is not a "labor force." He says that all current and future renovation projects are and will be carried out in the manner described by Wright, Guenat and the other members of the real estate team -- using hired professional firms.
Davis described the RPF as a group for Scientologists who are "not doing well and want to take a period of reflection and spiritual work and get back to basics." He says membership is voluntary, adding that criticism of the RPF comes from a "lunatic fringe." He says that Scientologists with "specialized skills" handle some projects in-house in order to save money.
Indeed, more than 100 Scientologists staff a Commerce facility that produces custom signage for the group's properties. On the June tour of the property, workers at the cavernous warehouse were eager to demonstrate their responsibilities, including the operation of an industrial laser cutter and a water jet cutter. The facility produces up to 1,000 pieces of signage for each of the church's properties.
Both De Vocht and Scobee say that in December 2009, the FBI interviewed them separately about the church; the conversations centered on the RPF. Scobee was interviewed after she sent a letter to the FBI.
Wright's New Yorker story detailed the alleged FBI investigation of the church. The story indicated that the investigation remained open at the time of the article's publication in February. But THR could not independently verify whether the alleged investigation ever occurred or is ongoing, and a spokeswoman in the FBI's Los Angeles office said she "could not confirm or deny an investigation."
The church and its attorneys strenuously denied that the FBI has conducted an investigation. Attorney Mary Carter Andrues, who represents the church, wrote in a May 16 letter to THR that she has dealt with representatives of the U.S. Department of Justice and "confirmed that there is no open investigation of the church or any of its affiliates or leaders; and any report to the contrary is false." She noted that there never was an investigation.
Alexa Cassanos, senior director of public relations for the New Yorker, says that the publication stands by Wright's report and is not "aware of any legal action taken with respect to the article."
"WHO ARE YOU? FIND OUT"
On a recent Friday afternoon, the church's West Coast headquarters was buzzing. As a security guard circled the perimeter on a bicycle, others walked in pairs, ambling past the property's large electronic sign on traffic-choked Sunset Boulevard that queried passersby: "Who are you? Find out." Uniformed men and women trotted across L. Ron Hubbard Way to meet up with others across the street at another of the organization's buildings. The road, long known as Berendo Street, was renamed in honor of Scientology's founder in 1996. Scientologists refer to the West Coast headquarters, formerly Cedars of Lebanon Hospital, as the Complex.
It isn't lacking in historic character: The building is the work of noted L.A. architect Claud Beelman. However, the property, which is less than a mile from KCET Studios, is not listed on any historic registers and can be altered. The property was overhauled and reopened in April 2010; it features Scientology's main L.A. church, classrooms, a theater and an office for Hubbard that is cordoned off and spotless. (Many church facilities include a ceremonial office for Hubbard.) The Complex is topped by Scientology's eight-pointed cross and adorned with a massive LED sign, which is 16 feet tall and cost roughly $500,000.
And more changes are imminent: There are plans to add a 2,000-seat auditorium to the more than 500,000-square-foot compound. But the three-acre property is still dominated by the aging main hospital building. In other hands, it might be razed and plans made for a development that could better utilize the valuable property. Because of its large size, the site could fetch as much as $100 million on the open market. But don't expect the wrecking ball -- or a for-sale sign -- to appear anytime soon: Davis says there are no plans to unload the group's historic Hollywood holdings. So far, none of the significant local properties have been sold.
"Ultimately," says Davis, "these are spiritual investments, not a financial investment."