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Saturday, Feb 4, 2023

Toymaker Building Block in Valley

After multiple false starts, toymaker MGA Entertainment Inc. is moving forward with plans to develop one of the San Fernando Valley’s most ambitious real estate projects. If it wins approval from the city, construction could start late this year at the former L.A. Times printing plant site in Chatsworth on what would be the Valley’s first live-work campus – combining light industrial and commercial space with retail, residential and community amenities. MGA Chief Executive Isaac Larian, who founded the Van Nuys company in 1987, has long envisioned developing something similar to Google Inc.’s Mountain View campus on the site. Construction would be completed around 2018. “This is the first project we’ve done like this anywhere,” said project architect Lise Bornstein, of Santa Monica-based Killefer Flammang. “We designed the campus to have continuity with the neighborhood and reflect core ideas around health and wellness, whimsy and fun – stemming from the fact that it’s a toy company. I think the experience of this place is really unique.” The plan for the 24-acre site at 20000 W. Prairie St. includes 1.2 million square feet of mixed-use light industrial, corporate office, retail and residential space. The project would involve renovating the 256,000-square-foot former printing plant, which will serve as MGA’s corporate headquarters, production facility and ancillary creative office space. Also planned are four ground-up apartment buildings totaling 700 units, 14,000 square feet of retail and substantial green space. Amenities to be shared by the 250-plus MGA employees on site and the community include a walking track, amphitheater and child care center with outdoor playground. The company plans a shuttle between the campus and the Orange Line bus route and Metrolink train station. The development will require a General Plan amendment to revise the land-use designation from light industrial to community manufacturing, a commercial-industrial zoning classification that accommodates residential use, said Nick Hendricks, of the Los Angeles City Planning Department. While projects that put industrial and residential users in close proximity can be controversial, Hendricks said there is so far no organized opposition to the project. The comment period on the draft environmental impact report closes Jan. 20. “It could be approved as soon as mid-2015, optimistically. The project is similar to what has been built in the area and provides significant transportation management,” he said, adding that groundbreaking could occur by the end of this year. MGA did not respond to repeated requests for comment. Creative development Larian founded the company, which designs and manufactures toys, games and dolls, after arriving in the U.S. as a college student from his native Iran in 1971. The company started as an import-export firm and later moved into consumer electronics. Its breakout moment came in 2001, when it introduced the Bratz doll line – the first to present a serious challenge to Mattel Inc.’s Barbie doll franchise. It purchased Hudson, Ohio-based Little Tikes Co., maker of plastic climbing and riding toys, in 2006 significantly expanding its product line. Manufacturing of MGA’s products, including its Lalaloopsy dolls and Little Tikes play equipment, is largely done overseas, which will not change with the new headquarters. However, the project will give the company a chance to consolidate its employee base from the Van Nuys headquarters it has outgrown, as well as provide employee amenities such as a 7,500-square-foot cafeteria, onsite child care and a walking track. Creative development, prototyping, photography, marketing and administration will be conducted at the site, which also will have showroom space, said Bornstein, who anticipates light remodeling of the printing plant. “It’s so cool, with an industrial feel to it. It’s just perfect for creative office,” she said. The outdated heating and ventilation systems will be overhauled to improve energy efficiency, IT infrastructure and skylights will be added and solar panels installed on the roof. She added that the housing element was important to Larian and his son, Jason Larian, who serves as vice president of business development. Their goal was to give creative energy and a community connection to the family-owned headquarters project. The company also expects having apartments available for employees, an advantage in recruiting and retention. But whether there will be tenants to fill four apartment buildings and 43,000 square feet of new office space is another question. The area is currently dominated by large government and industrial users, including cosmetic, food and adult-video production companies. “It’s a little more industrial out there. I don’t know whether other entertainment companies would want to go there. I don’t really see the demand for creative office out there, either,” said Stacy Vierheilig-Fraser, senior managing director at the Sherman Oaks office of real estate brokerage Charles Dunn Co. Billionaire status The development plans come at a time when MGA’s – and Larian’s – fortunes are rising. Last year, the entrepreneur cracked the Forbes billionaire list for the first time, coming in at number 1,496 with a net worth of $1.1 billion. Earlier in the year, he brought in former Walt Disney Co. executive Anne Gates, who has extensive experience in consumer products, to become MGA president and handle day-to-day operations. MGA has recently expanded its line of dolls, including Mooshka and Moxie Girl, and its Little Tikes brand. But the company struggled for many years during an expensive and nasty court fight with Mattel Inc. started in 2004 over MGA’s line of Bratz dolls. The El Segundo toymaker claimed copyright infringement and alleged that the creator of the Bratz line actually worked for them when he came up with the idea for a sexy, bad-girl doll that went on to challenge its lucrative Barbie franchise. The nine-year federal court battle involved two jury trials, 10,000 court docket entries and 11.5 million pages of discovery – and many millions of dollars in legal costs. MGA eventually prevailed in 2011 when a federal judge ordered Mattel to pay more than $309 million in damages, fees and other costs. The monetary award was overturned on appeal, but Mattel was ordered to pay MGA’s $138 million in legal fees. MGA purchased the Chatsworth property for a reported $28 million amid the long-running legal battle. The Times had closed its local operations due to declining circulation just 22 years after opening the facility in 1983. MGA originally planned an adaptive re-use project on the site for its own headquarters and wanted to sell the remainder of the property – covered in surface parking – to a developer that would build out the mixed-use apartments. The property was listed for sale in late 2013 and generated substantial interest from a number of potential buyers, said Laurie Lustig-Bower, the CBRE Group Inc. agent who represented MGA at the time. “They decided not to pursue any of it, opting instead to move forward with their own developer,” she said. The result is the current plan, which Bornstein said strongly reflects the Larian family’s vision and pride in their company. “It was important for them to have continuity with the neighborhood, including adding a small orchard as an homage to the fruit trees that the family had growing up,” she said.

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