David Simon is so optimistic about Hollywood that he is building a new film studio from the ground up and renovating another studio that dates back to the era of silent films.
They are the largest of 10 projects the Hollywood real estate developer has completed at a time when many other Los Angeles builders have halted work as high interest rates and construction costs make it harder to build profitably.
Simon is banking on the continued staying power of the entertainment industry, even as it undergoes structural changes in the streaming era and the continued appeal of Hollywood as the place to make movies and television shows.
Through his company Bardas Investment Group, Simon recently launched construction of Echelon Studios, a $450 million complex on Santa Monica Boulevard west of the 101 Freeway on a site formerly occupied by a Sears store. It includes five sound stages and support facilities, including offices and space for trucks, production equipment and actor trailers.
Simon recently started construction on the $450 million Echelon Studios complex, shown in a rendering, on Santa Monica Boulevard on the site of an old Sears store.
(Bob Hale/Rios)
Less than a mile away on Romaine Street, Simon is preparing to launch a $600 million renovation and expansion of Echelon at the Television Center, once home to Technicolor's film production lab and Metro Pictures Corp., which became part of Metro-Goldwyn. Meijer in the twenties. Metro's stars included Rudolph Valentino, Lillian Gish, Ramon Novarro and Buster Keaton.
Before founding his own firm in 2018, he oversaw two large-scale Hollywood projects for Kilroy Realty: the $420 million office, residential and retail redevelopment of the former CBS headquarters in Hollywood, now known as Columbia Square and the $450 million office and residential redevelopment of the former headquarters of the Academy of Motion Picture Arts and Sciences, now known as On Vine.
The Times spoke with Simon to discuss his Hollywood projects, as well as his predictions about the future of the neighborhood and the local entertainment industry. The interview has been edited for brevity and clarity.
Hollywood's historic Art Deco Echelon Television Center studio complex, which will undergo a $600 million makeover.
(Luis Sinco/Los Angeles Times)
You chose to focus a long time ago your efforts on Hollywood. Why did you think it had an edge over other real estate markets?
David Simon: I've always known that Hollywood is the biggest brand in the world. Everyone knows what Hollywood is – movies, television, celebrities – and that's just a great brand to have as you're developing. It was surprising that for many years there wasn't much institutional investment. What really got me going was the CNN building.
What happened to that building?? Larry King broadcast his shows there.
We had the opportunity to purchase the building in the early 2000s when I was working at Broadreach Capital Partners and we didn't want to lose the high-profile tenant, CNN. They had a deal on the table to move into the Sherman Oaks Galleria.
I remember asking the question, “If we bought the building, would you be interested in staying if we built you a new studio?”} And the answer was, “Yes,” and we signed a lease of twenty years with them. That really told me that there is a market in Hollywood and there is really no focus from the institutional landlord mentality, and there are no investment dollars coming in because no new studios or soundstages have been built in decades.
You continued to work for other developers until you founded your own company six years ago. What made you think it was time to take the plunge?
We said, “This industry is really growing. There seems to be a high demand for content, the number of streamers is growing and a lot of production is taking place.” We thought there was a need to create new and inspiring environments in the entertainment capital of the world for media and content creators.
What is your company doing now?
We have approximately 1.6 million square meters under development. All rights are in place, with the exception of Television Center, which is still going through city approval. It's all about creating a portfolio of assets that caters to this entertainment user base. Between our two studios we have about 10 soundstages and a nice critical mass.
Many other developers are on the sidelines waiting for conditions to improve. Why are you plowing ahead?
My partners at Bain Capital Real Estate and I are not naive about where the world is today, where the interest rates are and the cost of debt and construction costs and everything that's going on in the world. But we believe our locations are great. They are infill locations in the heart of Hollywood.
The demand for media and content has its ups and downs, like any growing industry. There will be consolidations and the like, but ultimately that demand will remain there. And to meet that demand, quality products, what I call the production facilities, have to be set up and it has to be state-of-the-art.
Would that slow the trend of film and television production leaving LA for other cities?
With artificial intelligence, LED screens and other technology [filmmakers] can create scenes in a soundstage that feels like you're in New York or Paris, but you're really in LA. The more content that can be created locally, the better for the talent.
