Office Building Is A Hollywood Hit

Ground is about to be broken for the first office building in Hollywood in years.
By: DANIEL MILLER: Los Angeles Business Journal Online
A two-decade drought is over: Hollywood is getting a new office building.

Next month, Sunset Gower Studios, an independent production facility, will break ground on a six-story, 97,000-square-foot building for Technicolor Inc. at Sunset Boulevard and North Gower Street.

Redevelopment and real estate industry professionals have supported the project, noting that Hollywood needs more office space to support the growth of the area’s housing market, which has ballooned in recent years.

Though Technicolor, a division of France-based Thomson, signed a lease to occupy the entire building several months ago, an appeal made to the Los Angeles Central Area Planning Commission by a neighboring business owner threatened to derail the $40 million project.

That appeal, made by East-West Studios LLC owner Doug Rogers, was rejected 3-0 by the commission at its Sept. 12 meeting; the project is now moving forward, with construction slated to begin in October, said Robert Papazian, Sunset Gower Studios’ chief executive.

“A real renaissance could take place in Hollywood,” Papazian said. “Hopefully this will kick off other developers to refurbish existing structures or take old ones down and build new office buildings. It would be good for the community and great for businesses that participate.”

The office project has received the support of L.A.’s Community Redevelopment Agency and the Los Angeles Mayor’s Office business team, among other groups that cite the long drought in office construction.

The last Class A office building erected in Hollywood was the Mercedes-Benz tower, which was built in 1984 at 6353 Sunset Blvd. Klasky Csupo Inc., an animation production company, currently occupies that building.

According to John Perfitt, senior real estate development agent for the CRA, the construction of the Mercedes-Benz tower also followed several years during which there had been no office construction.

Balance issue
“We are very concerned about the jobs and housing balance in Hollywood,” Perfitt said. “We would like to see more Class A office space in Hollywood specifically targeted at the entertainment industry.”

The new Technicolor facility at 6040 Sunset Blvd. will be built on the northeast corner of the 11-acre Sunset Gower Studios lot, between North Gower Street and Gordon Street. The building area is currently a surface-level parking lot.

Technicolor is already a tenant on the Sunset Gower Studios lot and has outgrown its current space, where it does sound production work. As part of the new Technicolor building construction, other upgrades will be made to the studios’ lot, including a new entrance and landscaping.

“With a big company like Technicolor placing its mark on Sunset, it’s a bona fide statement that says we believe in this area,” Papazian said.

In recent years, through Los Angeles’ Adaptive Reuse Ordinance, large chunks of Hollywood’s office space – often in antiquated buildings – have been converted to condos and lofts.
“If you look at construction and land costs and rent, the for-sale residential properties still pencil better in terms of other land uses,” Perfitt said. “The equity money follows that.”

The new Technicolor building is slated to open by the end of 2007 and will house some of the company’s post-production, editing, and dubbing operations.

“We are thrilled,” said Bob Hoffman, vice president of marketing for Technicolor. “Technicolor has a long history of involvement in the Hollywood neighborhood and we are thrilled that there is a re-emergence of that neighborhood.”

Technicolor also operates a post-production facility across the street from Sunset Gower Studios at 6087 Sunset Blvd.

In its appeal to the Planning Commission, East-West Studios, a recording studio, argued that operational and construction noise created by the building would be a detriment to the studio’s recording operations, according to Planning Commission documents.

“The Sunset Gower folks went out and did testing on noise levels and presented it to commission,” said Tim McOsker, attorney with Christensen Glaser Fink Jacobs Weil & Shapiro LLP, who handled the appeal for Sunset Gower Studios. “The area Planning Commission agreed with Sunset Gower’s findings.”

Papazian said that Sunset Gower Studios is working with other area landowners to make sure they are comfortable with the construction. “We are doing anything possible to mitigate sound problems so they can continue in their business,” he said.

East-West Studios did not return calls seeking comment.

With the Technicolor project now moving forward, those in redevelopment say that it could jump-start other projects.

Perfitt said that among potential office projects in Hollywood, the CRA is working with a group of entertainment industry real estate professionals – including Dana Arnold, chief executive of Culver Studios – on a 100,000-square-foot project at 1601 N. Vine St. The environmental documents for the project are currently being written, and construction could begin in fall 2007.

Linda Dishman, executive director of the Los Angeles Conservancy, said that the goal in Hollywood is to create a community that is more than just a thriving residential neighborhood.

“It is about a balance,” she said. “We don’t want Hollywood to simply be a residential neighborhood. Since Hollywood is the entertainment capital of the world I think the office space essential.”