Hollywood Boulevard Poised for Reboot as Production Ramps Up, Tourists Begin To Return

Overhaul of Famed Hollywood Strip Seeks Better Climate for Locals Along With Tourists

By Lou Hirsh CoStar News November 28, 2021 | 7:41 P.M.

You can, as The Kinks sang in their 1972 hit “Celluloid Heroes,” see all the stars as you walk down Hollywood Boulevard.

Like much of the rest of the famed thoroughfare, though, these days the star-shaped plaques are decidedly unglamorous, embedded in dirty, chipped sidewalks, in many cases adjacent to boarded-up buildings in a pandemic world bereft of tourists. Hollywood Boulevard has for years struggled to define its identity. Parts of its bygone days as the epicenter of the film business linger in the form of restaurant stalwart Musso & Frank Grill, while the star-studded Walk of Fame still lures tourists who stop to touch the celebrity handprints in the concrete in front of what is now branded the TCL Chinese Theatre. And a massive shopping mall has tried — largely in vain — to attract locals and tourists alike for the past 20 years. Now, local business and government leaders are looking to capitalize on what's viewed as a pandemic rebound for media production — with several new soundstage projects underway nearby as studios feed growing appetites for streaming content — by boosting development geared to the people who live and work in the neighborhood, not just visit.

With the project known as “Heart of Hollywood,” civic and business planners are undertaking a Hollywood Boulevard revival reminiscent of the early 1990s redevelopment that transformed New York City’s long-seedy theater district at Times Square into a more family-friendly mix of restaurants, entertainment venues, retailers and office spaces.

Taking a page from a California business playbook now capitalizing on outdoor dining’s skyrocketing popularity during the pandemic, local business leaders are looking to make the crowded boulevard more dining-, pedestrian- and bike-friendly. Goals include making the boulevard a place where people will want to spend more time and money doing things beyond stargazing.

“Our focus is on consistent attention to the necessary quality of life improvements for local residents and visitors,” said Los Angeles Councilmember Mitch O’Farrell, whose district includes Hollywood and who is spearheading Heart of Hollywood as a public- and private-sector redevelopment project. The overall cost to build it out has yet to be determined. “A great public corridor — one that is safe for pedestrians, visible at night and responsive to community needs — can help catalyze even more investment in housing for all income levels as well as economic development.”

In planning for the past two years, and so far representing a $4 million investment by the city for design and other preparatory work, Heart of Hollywood this fall enters the third in a series of design and planning phases that are likely still ahead before the project can be presented to city planners for formal review, possibly sometime during 2022.

The latest iteration calls for removing at least one lane of traffic in each direction on Hollywood Boulevard, along with some of the existing street parking between Argyle and La Brea avenues, and repurposing the space to allow businesses to set up tables for alfresco dining. There would also be bike lanes, new landscaping and wider sidewalks for pedestrians.

Times Square Model

Developer David Malmuth knows the challenges facing the iconic tourist location. As a development executive with The Walt Disney Co., he oversaw a two-year restoration of New Amsterdam Theatre in New York, among numerous Times Square-area properties redeveloped by property owners in a 1990s partnership with the city and a regional joint powers authority.

Then, as an executive with developer Trizec Hahn, now part of Brookfield, in the late 1990s, he helped oversee design and construction of the roughly 640,000-square-foot Hollywood & Highland mall. That project inspired other nearby development, though progress was slowed both by the post-9/11 pullback in visitor travel and later by the Great Recession. As with Times Square, Malmuth said there will be challenges in getting stakeholders on board for a significant shift in Hollywood Boulevard's configuration. The boulevard spans numerous properties with multiple owners who have differing timetables and priorities for maximizing their investments. Drivers won't like losing traffic lanes, and many businesses won't appreciate losing street parking or sidewalk space. “It’s really basically a question of political willingness and leadership,” said Malmuth, who now heads Malmuth Development in San Diego. “It can happen, and I think it will happen, but Times Square shows you also need to have the public and private agreement that will make it happen. They were looking to do the same kind of revitalizing of Hollywood Boulevard 20 years ago, and I’m sure 50 years ago and earlier.”

While Heart of Hollywood inches forward, the private sector has been working on its own improvements.

The owners of Hollywood & Highland, firmly committed to Hollywood’s viability as a retail and tourist lure, are in the midst of their own revitalization project for the mall.

“The Hollywood sign and the Hollywood Bowl and all of those other things are very historic and symbolic and they aren’t going anywhere — they’ll always be there for the Hollywood branding,” said Chad Cress, chief creative officer at development firm DJM Capital. “But things are changing in terms of what people want as part of that Hollywood experience.”

Major Overhaul

By next summer, mall owners DJM and partner Gaw Capital plan to complete what they’re calling Ovation Hollywood, a $100 million overhaul of the mixed-use retail center, which they acquired in 2019 for $325 million, according to CoStar data.

Cress said construction is underway on what will be a complete redesign and repurposing of the retail and entertainment complex, which was struggling with tenant departures and declining customer traffic well before the pandemic. The developers envision giving Hollywood what it’s never really had before — a large public open space that can serve as a central community gathering site, with festivals, live music and other neighborhood-centric events.

While the center will retain about 135,000 square feet of retail space, developers are turning the complex’s top two floors into offices spanning about 100,000 square feet, with talks underway with numerous media and other creative-sector tenants — as yet undisclosed — to occupy the spaces. “Hollywood & Highland really has not had a change in vision in more than 20 years,” Cress told CoStar News. “We need to adjust to the fact that there have been big changes in the way people shop, and in how they want to spend time at a retail center.”

The actual business of media production moved well beyond the Hollywood neighborhood over the past several decades, as major producers set up studios and offices in places such as Burbank, Culver City, Century City and Santa Monica, and the Academy of Motion Picture Arts & Sciences opened a new museum dedicated to the history of film about 5 miles away from Hollywood Boulevard.

Leaders of The Hollywood Partnership, which oversees a neighborhood business improvement district whose purview includes the tourism-focused boulevard, maintain the elements are coming together for a pandemic rebound that directly benefits Hollywood proper from a development perspective.

The goal of the effort is to provide spaces and amenities that accommodate a range of activities. The organization points to a 244% increase in pedestrian counts at Hollywood & Highland — rising to 481,186 for July-August 2021 from 139,835 in the year-earlier period.

The business improvement district, citing data from sources including CoStar and STR, also noted hotel occupancy in Hollywood rose to 60% in the second quarter, up from 40% in the prior quarter. As of midyear, the district reported that the Hollywood neighborhood had five hotels under construction with a total of 830 rooms, plus another 12 projects entitled with 1,162 rooms.

On the residential front, there are four apartment projects under construction with a total of 1,789 units, along with eight projects entitled for 4,018 units. The business group said 32% of the apartments under construction are set aside as affordable units. Cranes are not yet moving on major office projects, but developers have at least six in the works with entitlements in place for more than 1.7 million square feet. One is Onni Group's project at Hollywood and Cahuenga boulevards, under city review and targeted for a fourth-quarter 2026 completion. It is planned to include about 218,000 square feet of offices, 6,500 square feet of restaurants and nearly 10,000 square feet of open space and public amenities.

On Sunset Boulevard, not far from several expanding studio lots, a development partnership led by investor Maggie Gong Miracle filed plans with the city of Los Angeles for a futuristic, $500 million office tower with a clamshell shape and multiple landscaped terraces on its 22 floors. The fate of those apartment and office projects will play a big role in nurturing ground-floor retail as stores, restaurants and other businesses look to serve the growing slate of Hollywood residents and workers coming to the new production studios.

CoStar data shows Hollywood’s retail vacancy at a tight 5%, though the office vacancy is at 18.5%. The Hollywood business improvement district noted seven new retailers joined the local roster this year, and 61% of 703 retail spaces in the district were occupied by operating businesses at the midpoint of 2021, which has since improved.

The Hollywood Media District, another business improvement group serving the neighborhood, sees signs of development improvement already surfacing in an area well outside the high-profile tourist section and populated primarily by those who actually live and work in Hollywood, including those in much less glamorous businesses serving the neighborhood.

“Things are booming right now, and there are a lot of things going on,” said Jeff Luster, president of the group consisting of more than 350 businesses in the area where Santa Monica Boulevard meets North Highland Avenue. “The older industrial buildings are getting repurposed, and there are more creative tech and design firms coming in now.” Luster, who also heads local commercial investment firm Major Properties, points to several projects either underway or in planning by multiple developers in that district. Developer Avalon Bay just completed the first phase of a planned 700-unit apartment complex on Santa Monica Boulevard at Las Palmas Avenue, where it is known to be scouting a gourmet grocer to occupy one of its ground-floor retail spaces.

Gradual Improvements

But progress in making the media district neighborhood more livable has come gradually. Luster said the business improvement district has worked to reduce its longtime issues with homelessness, including with direct outreach programs where local business leaders got to know the unsheltered people by name and provided them with water during hot summer months.

To encourage more development on blocks where activity lags, the group has invested in sprucing up public spaces, including improving lighting and landscaping along Highland Avenue to make the area more appealing and pedestrian-friendly for residents. “Overall if you focus on making things clean, it helps cut down on crime and homelessness,” Luster said.

The media district also includes several live performance theaters that, as of late October, continued to struggle for a pandemic recovery, as city residents remained leery about large-crowd gatherings. In rules that went into effect in early November, the city of Los Angeles required proof of full COVID-19 vaccination to enter indoor theaters, movie theaters, restaurants, shopping centers and other gathering spaces.

Hollywood business leaders are counting on the development momentum to continue, with projects geared toward the rising population and clustered near mass transit hubs that already connect the neighborhood to other key residential and job hubs of Los Angeles.

Matt Weaver opened The Bourbon Room, a restaurant and live music venue near the Walk of Fame on Hollywood Boulevard, in mid-2019 — just months before the pandemic shut down most big-crowd entertainment showplaces in Los Angeles.

The longtime TV and film producer struggled last year to keep the venue afloat, but over the past few months he picked up considerable new business as a location for film premiere parties and other special events.

For now, progress is mixed on Hollywood Boulevard as tourists and locals begin to return. Weaver said Hollywood will need all contingents back in force if the neighborhood is to achieve a long-term economic comeback with the right mix of compelling new elements. That's even if it means favoring pedestrians and outdoor diners over cars on portions of Hollywood Boulevard.

As The Kinks forewarned:

"Be always on your guard/ Success walks hand in hand with failure/ Along Hollywood Boulevard."

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