UTA eyes site leased to WME

Ari Emanuel goes to arbitration; neighbor Gersh the issue?

William Morris Endeavor's legal problem could turn into United Talent Agency's gain.

WME has backed out of an agreement to occupy a new building in Beverly Hills, arguing that the owner, George Comfort and Sons, breached its lease agreement by renting the building next door to the Gersh Agency.

Comfort disagrees and an arbitration is set for November.

Meanwhile, UTA is said to be circling the space. The agency, which declined to comment, is growing out of its current offices on Wilshire Boulevard and is believed to be seeking a new home. An informed source said the erstwhile WME building is one of three sites under consideration, along with another in Beverly Hills and one in Century City.

But apparently UTA has leverage: The city of Beverly Hills approved construction of the building -- which would not normally have been permitted because of its size -- because it was part of an "Entertainment Office Overlay Zone," and was intended to attract "quality talent agencies" to the city. With the industry slumping, such tenants are in short supply.

Under chief executive Jim Wiatt, the William Morris Agency committed to occupy the six-story structure on Beverly Drive for 20 years. In a controversial decision in 2007, the Beverly Hills city council made financial concessions to the building's owner to ensure that William Morris would remain in the city. (CAA and ICM have relocated to Century City.) The December 2007 council resolution approving the construction specifically noted that William Morris had executed a lease to occupy the building.

Citing the William Morris lease, the resolution on the project noted that permitting the oversized building "will help retain an important corporate citizen in the city, which will help maintain and strengthen the economic base of the city."

A June 2009 press release from Tischman Construction, then in the midst of building the structure, offered this description: "The modern, rectilinear look of the building is defined by a curtain-wall facade that has extruded fins, and multicolored and shadowboxed glazing. Lobby details will include three suspended glass bridges and French limestone floors and walls."

After the 2009 merger with Endeavor, Wiatt was ousted and Ari Emanuel of the rechristened WME was said to be displeased with several aspects of the new structure.

WME, which is housed in two sites and is still believed to be seeking new quarters, declined to comment. Comfort also did not respond to requests for comment.

Rival Gersh Agency occupies space in the Bank of America building, less than 50 feet away from the new building. Gersh and WME would have shared a passageway joining their respective garages. And Gersh employees also would have had a view into a courtyard outside the WME building. Sources also said WME does not like the fact that many of the offices in the interior building have no windows, while almost all offices in the current WME building are rooms with views.

"It's expensive and it's another thing that Jim Wiatt saddled him with that he doesn't want," said a former William Morris source.

A rival agent expressed some skepticism that these issues were at the heart of Emanuel's decision.

"I don't think he wants to move," he said. "The real estate is much more expensive and the moving costs are expensive and that's all cash he'd have to outlay and I don't think he wants to do that."

David Gersh, co-president of The Gersh Agency, said it wouldn't bother him if WME had moved into the building and he didn't mind if UTA takes the space. "They can look into our building but we cannot look into their building," he said. That doesn't concern him, he added; nor does he expect to take advantage of the view. "I have more productive things to do that to look into their courtyard," he said.
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