Noho/30″/LK1st By CHRISTOPHER WOODARD Staff Reporter Plans by developers to build as much as $1 billion worth of sound stages, office and retail space in North Hollywood have city officials extolling the benefits of redevelopment. North Hollywood, they say, is on the verge of an economic renaissance that could transform one of the San Fernando Valley’s most rundown commercial areas into a mecca for film and television production. But critics say they’ve heard that tune before about the same neighborhood, nearly a decade ago. Although the Los Angeles Community Redevelopment Agency ultimately succeeded in bringing in the Academy of Television Arts and Sciences to North Hollywood in 1991, plans back then for a four-star hotel, a restaurant with banquet facilities and vastly more retail and office space fizzled an experience which has left local business people more than a little skeptical of the new proposals. “It will never happen. It’s total pie in the sky,” said Mildred Weller, a property owner in the targeted area and longtime CRA foe. “The CRA made all these promises that the Academy development was supposed to totally renew North Hollywood. But they still have space in that project that’s never been rented.” Walter Beaumont, CRA assistant project manager for North Hollywood, said the original project was the victim of forces far beyond the agency’s control first, the building industry downturn in the early 1990s, and then the Northridge earthquake in 1994. This time around, proponents argue, there is demand for sound stages and supporting office space, especially because the proposed projects are targeted for a site that’s surrounded by media companies stretching from Disney Studios in Burbank to the CBS Studio Group in Studio City. With the Metro Red Line station scheduled for completion in the spring of 2000, the community is poised to be a transportation hub for the east San Fernando Valley, they argue. “I think this validates the strength of the North Hollywood area. It’s being looked at by a variety of different players from a bunch of industries,” Beaumont said. In response to the CRA’s solicitation of bids, two builders submitted competing plans to redevelop 42 acres of mostly rundown manufacturing and auto-shop businesses on either side of Chandler Boulevard, between Lankersheim Boulevard and Vineland Avenue, next to the Red Line station. A partnership calling itself Academy Media Centre LLC of Beverly Hills is proposing to build a 1.7 million-square-foot, $250 million to $300 million development featuring eight sound stages, apartments, a restaurant and food court complex, an eight-story office tower, a 1,825-seat performing arts center and a culinary school with banquet facilities. The competing project, proposed by retail developer J. Allen Radford, envisions 4.26 million square feet, featuring 10 sound stages, four 20-story office towers, a 300-room hotel, 20 restaurants, a 20-screen multiplex and 400 condominiums. Radford said it would create 14,000 jobs and take 10 years to complete. But business owners in and around the project area are bracing for a nasty fight with the CRA, which is almost certain to use its power of eminent domain to assemble the parcels into a developable chunk. Patrick Berberian, owner of California Art Products Co., a company that makes fiberglass columns and other decorative art, believes his 50,000-square-foot parcel on the north side of Chandler will be one of the first to be subjected to eminent domain proceedings because it lies in the first phase of both projects. “What I object to is that it’s not for schools or roads; it’s for another developer to maximize his profit,” said Berberian. Berberian said Radford offered him $1.8 million for his land, but he estimates it will cost him $3 million to find a suitable replacement property. Beaumont said the CRA doesn’t wish to resort to using its power of eminent domain, but Berberian’s story suggests that assembling the site without the agency’s legal muscle would be difficult. “We come under criticism for using eminent domain, but what never gets mentioned are the inflated property values people have in mind,” said Beaumont. The agency places the value of the land in the project area at about $18 to $25 a square foot, meaning Berberian’s property roughly would be worth between $900,000 and $1.3 million. Property owner Weller questions whether either of the projects are economically viable, and fears that demand for office and studio space will cool before the project is completed. It appears, after all, that the absorption of office space, especially for entertainment uses, appears to be slowing. The vacancy rate for prime office space in Burbank had risen to 5.9 percent as of Sept. 30, up from 3.9 percent just three months earlier, according to Grubb & Ellis Co. PacTen Partners, for example, had counted on the entertainment industry to help fill its 24-story Glendale Plaza. But the hoped-for entertainment tenants never materialized, and the developer has not yet announced a major lease. Doug Marlow, a leasing agent with CB Richard Ellis Inc. who is handling Glendale Plaza, conceded that the entertainment industry has retrenched in recent months, but he sees it as a short-term trend. “The area has absorbed a tremendous amount of space in the last 18 to 20 months. Entertainment is a major industry, and it will ultimately need more space,” he said. Radford, head of Santa Monica-based JARCO/SLG & G; LLC, said he is so confident of the area’s potential that he more than doubled the size of his project in the final days before the bids were due. “There’s just a tremendous demand for space, not only from the entertainment industry but also from the general business public,” said Radford. “Being tied into the Metro line, you have the opportunity to walk out of an office building, get on a subway and with safety and convenience be at the downtown civic center in 22 minutes. That allowed us to look at more of a regional project.” But Weller, for one, says she’s heard it all before. “They’ve been trying to bring a hotel here since 1978. Who’s going to stay in a hotel here?” she asked. “I could see maybe a little bed and breakfast, but a big hotel isn’t going to work.” Beaumont said if demand for the hotel, offices or any other component of the project wanes, the agency and the developer will have the opportunity to make adjustments to the development. The CRA will weigh both proposals before passing a recommendation along to the agency’s board, which could happen as early as December. A final nod from the City Council would give the CRA 180 days to negotiate a development agreement with the winning team, Beaumont said. While the CRA hopes to keep its subsidy of the project to a minimum, the agency expects to receive a $14 million loan from the Department of Housing and Urban Development for land acquisition. As part of the loan package, the CRA also applied for a $1.8 million HUD grant that would allow it to cover its loan costs for two years and a $1.2 million grant from the U.S. Department of Commerce, Economic Development Agency, for public improvements, such as street widening. Guy Weddington McCreary, a longtime North Hollywood resident and past president of the Universal/North Hollywood Chamber of Commerce, said he and other business leaders strongly support the redevelopment effort. “If everything falls into place, this will be a major economic and entertainment hub,” he said.