By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
By Dennis Romero
The "big bucks" translated into a $30 million public outlay to finance the construction of the custom-built, live-broadcast theater the Academy demanded (and would use only one month out of every 12) — money Gallant knew could not be recouped from the rental of what later would be called the Premiere Theater. To generate the tax revenue to pay off so much public indebtedness, the CRA would have to let the project double in size — from 640,000 square feet of retail space to 1.2 million — and it would have to cough up $60 million for parking. In the name of bringing a once-a-year awards show back to Hollywood, TrizecHahn’s project went from a $150 million mall to a $388 million "urban destination entertainment center" overnight.
What followed was a very Hollywood bit of legerdemain to make these numbers pencil out. The CRA commissioned KMG consultants, a West Los Angeles real estate and urban-economics firm, to examine the project’s financial projections, which — surprise — came up roses. Using the agency’s underlying economic assumptions, KMG reported that the parking lot would return $10 million per year to the city, gross. The retail cash tills would tally another $1.9 million per year in new sales taxes, and the hotel would add $2.8 million. Business-license and utility taxes would kick in $500,000. Over 30 years, by KMG’s reckoning, the project would generate more than $200 million in profits for the city, even after paying back the $90 million subsidy.
A few critics — quickly dismissed as cranks by Gallant and Jackie Goldberg — pointed out that the assumptions underlying these numbers were delusionally optimistic. For the parking structure to generate that kind of revenue, said David Morgan, all 3,000 spaces would have to be filled 365 days per year for 30 years. Even more suspect was the assumption that the mall, by 2003, would attract 9 million visitors per year — that’s 25,000 per day — each of whom would spend $91.20 per day at the mall. John Walsh, the CRA’s most prescient critic, scoffed: "You mean to tell me that someone on a tour bus of Hollywood who is buying three T-shirts for 10 bucks across the street can afford to drop 90 bucks a day just to walk up to the front doors of a theater where, once a year, the Academy Awards are presented?"
Beyond these details was the larger question of how to sell what had become the largest development in the city. How could you convince the public to accept a ziggurat at one of the busiest intersections in the city? How could you justify providing one of the world’s premier real-estate-development corporations with a line of credit worth, after interest, $240 million?
In the ensuing months, says Barbara Smith of the American Cinematheque, Malmuth ran "the smoothest campaign I’ve ever seen." The executive attended "literally hundreds" of neighborhood-association meetings and met personally with every member of the City Council. With his easygoing boomer air and his pale summerweight suits, Malmuth came off as anything but an arrogant, high-handed developer. He even gave out his cell-phone number to the Orchid Avenue owners association, whose members would suffer the greatest impact from the development. "Now is the moment in time to lock our arms together and see if we can’t make this boulevard go forward again," Malmuth urged anyone within earshot. "Scrub off some of the grime, and you find some wonderful stuff in Hollywood." In a neighborhood that had seen little but disappointment in recent years, Malmuth’s words — Ă¤ however rooted in personal and company gain — came as a welcome tonic.
Those doubters Malmuth couldn’t smooth into supporting the project he brought into the fold in a more traditional fashion. When the neighboring Outpost Estates Homeowners Association balked at the amount of congestion the project would generate, for instance, Malmuth offered to pay for a package of traffic improvements the group had been seeking for years. Now the association is solidly behind the deal. This year, playing both the short- and long-field game, TrizecHahn has consistently ranked in the top five on the City Ethics Commission’s quarterly survey of lobbyist spending. (The company laid out $358,000 for lobbying in the first nine months of this year alone.)
But the key to Malmuth’s success was the alliance he forged early on with Jackie Goldberg. Their joint appearances — at zoning-board hearings, City Council meetings and the like — have been nothing short of love fests. From the start, Goldberg parroted the mantra of Hollywood and Highland, dubbing TrizecHahn the "catalyst for revitalizing Hollywood."
Goldberg is an unlikely convert to the gospel of trickle-down redevelopment. Since her days as an L.A. Unified School District board member, she has preached a grassroots, ground-up politics rooted in her district’s social-services organizations. Her image as L.A.’s most liberal City Council member paints her as anything but a development stooge.
In their early discussions with Goldberg, according to a source close to TrizecHahn, the developers were surprised at the thrust of Goldberg’s demands. She didn’t harp on the traditional sticking points of traffic mitigation, height restrictions, parking, et cetera. Foremost in her mind was an issue developers had, up to that point, barely considered: the so-called "living wage" ordinance.