CRA Backs Studio-Office Plan at NoHo Subway Stop

Advancing a project seen by city leaders as key to the future of North Hollywood and the Community Redevelopment Agency, the agency board agreed Thursday to enter negotiations for construction of a massive complex of movie studios and office towers next to the new subway station.

The CRA board voted unanimously to approve a six-month exclusive negotiating agreement with developer J. Allen Radford on the same day agency Administrator John Molloy outlined another round of cuts at the financially strapped agency.

Radford’s 30-acre project, which some CRA officials estimate may cost $400 million or more, would include 2 million square feet of office space, retail and film production facilities, including 10 sound stages.

“We intend to be a major part of North Hollywood and its revitalization,” Radford told the agency board before its unanimous vote.

The project, called the North Hollywood Studio Complex, is proposed to be mostly privately financed on land at the southwest corner of Cumpston Street and Vineland Avenue.

Later phases of construction are planned to include two 20-story office towers, stores and restaurants, an amphitheater, entertainment museum, music recording facilities, and a club for film industry executives. Radford said the project will benefit from being next to the North Hollywood subway station, which is scheduled to open next year.

“This allows it not only to be a wonderful development for the east San Fernando Valley, but allows it to have regional impact,” Radford told the board.

A competing bidder for the right to develop the property questioned whether the Radford partnership can do the project without a massive public subsidy, perhaps up to $200 million.

“There is a major difference here in the amount of [CRA] contribution needed,” said William Kokott, a partner in the competing group, noting that a consultant hired by the CRA also noted the difference.

Lillian Burkenheim, the CRA’s project manager in North Hollywood, said plans have been scaled back from from the original 42 acres to eliminate elements, including 400 condominiums, that would have required heavy subsidies.

Burkenheim said the new project has about a $20-million gap in private funding, but she said she will work to reduce CRA’s financial role to little or nothing.

CRA board members said they would probably not approve any project that required significant public funding.

“It is my expectation that this will be fully self-sustaining . . . with no taxpayer subsidies,” board member Keith Richman told Radford.

Burkenheim said Radford’s partnership of Jarco/SLG&G; was selected also because it owns much of the project site and has experience building 1.5 million square feet of shopping center space in the Midwest. Radford’s team also includes Theodor Nicholas Bodner, a film producer and developer specializing in entertainment and gaming facilities. The sound stages, Burkenheim said, would be run by Hollywood Center Studios, an equity partner.

The losing development team is considering a lawsuit to challenge the decision.

CBS Studio Center President Michael Klausman, who under the losing proposal had hoped to run the sound stages, said CRA officials downplayed his firm’s commitment to the project and ignored warnings that the site is too small for the project proposed by Radford.

“This process, to say the least, has been bizarre and probably would make a good script,” Klausman told the board.

While the winning project drew support from representatives of the North Hollywood Chamber of Commerce and City Councilman John Ferraro, some business owners said they fear losing their property to the CRA’s power of eminent domain.

Thomas Kutrosky, an optometrist for 35 years in North Hollywood, is one of those who has been approached by Radford to buy his office building. Kutrosky said if the agency takes his property for Radford, it would create a hardship.

While the studio development could provide a new infusion of tax revenue to the CRA, Molloy said, the agency still has immediate budget concerns. He told the board that financial problems that forced him to cut staff from 350 to 210 workers in the last five years still plague the CRA.

To avoid a deficit for the fiscal year beginning July 1, Molloy said he will propose a budget that cuts the staff to 200, the level below which he said the agency will encounter serious difficulty carrying out its mission of curing blight.

“I am hoping these will be the last cuts,” Molloy said.

Molloy said that to do more with less staff, he is pursuing the recommendation of an agency task force to reorganize, changing from a hierarchical management organization into self-managed project teams that better pool limited resources.

The task force of agency managers also recommended that all 10 field offices, from North Hollywood to Watts, be closed and the staff consolidated into the downtown headquarters.

Molloy said he will consider that recommendation as he drafts the budget, but that the trend in charter reform has been to move government closer to people, not consolidate it downtown.

“Personally I think it sort of runs counter to the bring-government-to-the-people thing that is happening with the charter,” he told the board.