From Making Dreams to Concocting Reality

VENTURA — For most of the last 80 years, Hollywood--the most famous place-name in the world--has been such a powerful symbol that it has transcended all geographical meaning. Meanwhile, real-life Los Angeles has played the more mundane role of serving as Hollywood’s dream-factory town--the place the industry could rely upon for skilled labor, sound stages, post-production facilities and the rest of the infrastructure needed to support it.

But things are changing. Los Angeles and Hollywood have grown up. L.A. is less important than ever to Hollywood as a factory town, and more important than ever to Hollywood as a theme park. This is turning their traditional relationship upside-down. Perception and reality are becoming intertwined in a way that neither the city nor the industry is accustomed to.

The best current example of this shifting relationship is the gradual, but undeniable, metamorphosis of the Universal Studios property from dream factory to theme park. Having cashed in on the studio tour and the fabricated CityWalk shopping experience, Universal’s parent company, MCA Inc., now plans to go headlong into the theme-destination business by expanding CityWalk and studio facilities, and by building a full-scale theme park and convention center. The plan on the table doubles Universal’s size over a 20-year period, from 5 million to 11 million square feet of building space, and calls for expansion of the Jurassic Park water ride.

Universal, in short, is going into the “place” business. But as all studios are discovering, building a place is different from running a factory. Homeowner associations in Universal’s neighborhood are up in arms. County Supervisor Zev Yaroslavsky and City Councilman John Ferraro have proposed a compromise plan that would allow the studio to expand but eliminate the theme park and convention facilities.

Universal is thus quickly learning what it is like to be a developer. It’s a good lesson, too. As Los Angeles becomes more theme park than factory town, the studios will play a formative role in creating the urban landscape of the 21st century. For this emerging Los Angeles to “work” as a city, the studios will have to make a stronger commitment to improving its built environment in a way that benefits the entire community, not just the studios’ bottom line.

For decades, Universal--like MGM, Paramount, Warners Bros. and other studios--was one of Los Angeles’ original “gated communities.” It was a self-contained compound housing everything needed to contrive the fantasies that entertained America. The idea of such a factory, perhaps best conveyed in F. Scott Fitzgerald’s fictionalized account of Irving Thalberg and MGM in “The Last Tycoon,” was to provide the producers and the moguls with total control over manufacturing.

To operate effectively, the dream factories had to have space: broad swathes of land on which to build the back lot, the big sound stages, the warehouses for the props and for the many other raw materials they required. Los Angeles provided space in abundance. Indeed, the urban geography of the city was shaped largely by the location of studios that became successful. But, today, space at Universal’s 400-acre hilltop site, as at almost every other studio town, is at a premium. Surrounded by millions of people, the studios are landlocked.

So manufacturing is, increasingly, divorced from the physical location of the studios. The moguls shoot TV shows in Vancouver or Toronto or Orlando; they rent each other’s sound stages; they farm out the post-production work to editing labs on the nondescript sidestreets of Hollywood. You don’t even have to have a back lot to have a mogul. MGM/UA Chairman Frank Mancuso, heir to the legacy of Thalberg and Louis B. Mayer, reigns over the empire not from the Irving Thalberg Building on the famous MGM lot--that belongs to Sony these days--but from a suite of offices in a formerly unfashionable industrial district in Santa Monica.

At the same time, the entertainment industry has become an exercise in “synergy.” The industry strives to create a merchandising connection between the ephemeral products the studios manufacture--TV shows and movies--and the theme experiences they can provide at specific “destinations”--Disneyland, Disney World. As the endless theme parks and entertainment-oriented downtown revivals in other cities have shown, “place” sells.

With their L.A. locations, the studios own a significant chunk of perhaps the best-known place in the world. But because they are landlocked, they must carefully consider how best to exploit these real estate assets. The answer, increasingly, is to convert the studio into a tourist destination. If you own a scarce, place-specific commodity known around the world, what are you going to use it for? A prop department you probably don’t need to keep in-house? A sound stage that can be set up anywhere in town? Or a destination that can attract a lot of people, make a lot of money and reinforce brand-name recognition for all your other business lines? The answer is obvious.

But being a tourist destination changes the studios’ relationship to the city and the surrounding neighborhoods. In some ways, a factory is not a bad neighbor. It’s self-contained; it imposes a predictable rhythm on daily life. A theme park, however, can’t be sealed off from its surroundings in the same way.

Once you go into the “place” business, you quickly discover that the place you create, however fabricated or manufactured, does not exist in a vacuum. It exists in the context of a well-established urban fabric, with streets, neighborhoods, stores and lots of other “places.” In other words, a place is part of a city. As Universal is discovering, when you want to exploit the value of a location that the city around you has helped to establish, you can’t just lock the gate and do whatever you want on your property. You have to be actively involved in every aspect of community life--and, in particular, you have to be acutely attuned to the politics of the town encircling you.

Given their drawbridge-and-moat mentality, this is not a role the studios have always felt comfortable with. To their credit, they are gradually learning that they must come out from behind the gate and be a presence in the community. The once-maligned job of vice president for real estate has become a more prestigious title and, tellingly, is often combined with responsibility for public affairs or governmental relations. Yet, they still manage to bungle the community politics end of it on a regular basis.

Not long ago, for example, three major studios--Warner Bros., NBC and Disney--sided with the Burbank Chamber of Commerce in supporting expansion of the Burbank Airport. When they realized this didn’t play well with the Burbank City Council, which opposes the expansion, the studios did an about-face, which got them into trouble with their colleagues at the chamber. The studios were understandably concerned about the political fate of their own future development plans in Burbank (all are planning major expansions). But their credibility has been undercut by the kind of political mistake real estate students learn to avoid by their second semester at business school.

Similarly, Universal blew the opportunity to connect with the city in a meaningful way when it declined to bring the Red Line subway tube into CityWalk. As things stand, the subway entrance will be down on Lankershim, while all the bustling, place-oriented activity will unfold up on the hill--reinforcing the moat-like perception that Universal is cut off from the rest of the town.

The new expansion plans at Universal make the loss of the subway bigger than ever. It appears likely that the compromise proposed by Yaroslavsky and Ferraro will, in the end, cut Universal off from the life of the city even more. The compromise is good politics for the two politicians, because it allows them to say they are supporting the continued growth of the entertainment industry while responding to neighborhood anxieties. But, in the long run, this kind of solution--which would bolster L.A.-the-factory-town and stunt the growth of L.A.-the-theme-park--is squarely at odds with the future of Los Angeles and Hollywood.

The studios appear to be in the “place” business for good. This means they’ll have to open their gates and find better ways to fit their Toon Town fantasies into the urban context that surrounds them. But the community will also have to recognize that, more than ever before, real-world Los Angeles (as opposed to the mythical kingdom of Hollywood) will serve as the stage set for the magnetic places that the entertainment industry is creating. The city and the theme park will have to find a way to become one interconnected entity where reality and perception can rest comfortably side by side.