Hollywood Real Estate Development Under Threat

The legal foundation of Hollywood’s recent revival is about to come apart.

The California Supreme Court on Dec. 29 affirmed the state legislature’s ability to abolish redevelopment agencies, the mechanism that made possible the Hollywood & Highland complex, the ArcLight/Cinerama Dome and other showbiz-supported developments that have reshaped the once-dingy section of Los Angeles.

Now several real estate projects across Los Angeles that would have been aided by the city’s Community Redevelopment Agency are in doubt. Among the victims are such historic movie theaters as the Westlake and the Reseda that were slated to receive aid from CRA/LA, which uses property tax money to work with developers on improving blighted areas.

“It’s impossible to say what will happen without the agency or something like it, but it will certainly make it much more difficult for some projects to go forward,” says David Bloom, spokesman for CRA/LA, which will disband Feb. 1.

A Jan. 13 deadline has been set to determine what entity — perhaps Los Angeles County — will take over the assets of the agency. On Jan. 11, the Los Angeles City Council voted 9-3 to not absorb CRA/LA, citing concerns over an ongoing budget crisis. If no local governmental body takes over the agency, control of its assets will be transferred to a body appointed by Gov. Jerry Brown, who sought to kill off the agencies statewide.

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For now, one of Hollywood’s most high-profile projects, the Academy of Motion Picture Arts & Sciences’ planned outdoor movie theater on 3.5 acres it owns on Vine Street, seems safe. AMPAS administrator Heather Cochran says the Academy is moving ahead with the project, even if it can’t complete a planned purchase of a roughly 8,700-square-foot vacant parcel that abuts its property and is owned by CRA/LA. That sale now appears threatened. 

Bloom says it is likely that the property at the southwest corner of Vine and De Longpre Avenue, which formerly was home to a KFC eatery, would be sold to the highest bidder, though such procedures are still being determined.

“If we owned it we would look much more closely at what types of programs we would put there,” says Cochran, adding that AMPAS plans to monitor how the parcel will be sold and remains interested in acquiring it. Work on AMPAS’ 17,000-square-foot theater project will begin as soon as the end of January, and it should be completed by May. 

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AMPAS’ planned outdoor theater is slated for the property that was to be the site of a $400 million movie museum before the Academy announced in October it would house that project on the Los Angeles County Museum of Art campus. As part of its original plans for the museum, the Academy planned to purchase the vacant parcel.

While the AMPAS theater project appears to be moving forward, other developments with ties to Hollywood are more seriously imperiled. The long-vacant, CRA/LA-owned Reseda Theatre at 18443 Sherman Way in Reseda was to be restored as part of a project by affordable housing developer Thomas Safran & Associates that also would have included housing and retail. CRA/LA would have transferred the property to the Brentwood-based developer for free and given the firm a loan to fund construction, which would have restored the 1948 Art Deco theater to operational condition. Thomas Safran & Associates could not be reached for comment.

A rehabilitation of the 86-year-old Westlake Theatre, across from downtown’s MacArthur Park and on the National Register of Historic Places, is likely dead. CRA/LA owns the property at 685 S. Alvarado St. and has long sought a developer to partner with on a $35 million remodel of the historic theater.

And in South Los Angeles’ Leimert Park neighborhood, an ongoing renovation of the Vision Theatre, which was built in 1930 and was used as part of the 1932 Summer Olympics athletes’ village, likely will not be completed. The city’s Department of Cultural Affairs owns the property at 3314 W. 43rd St. and CRA/LA was to provide funding for planned renovations of the theater to bring it up to modern standards.

Email: Daniel.Miller@THR.com

Twitter: @DanielNMiller