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Q&A: David Simon isn't a starry-eyed dreamer, but he's all in on Hollywood

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Q&A: David Simon isn't a starry-eyed dreamer, but he's all in on Hollywood

David Simon is so bullish on Hollywood he’s building a new movie studio there from the ground up and renovating another one that dates to the days of silent films.

They’re the largest of 10 projects the real estate developer has going in Hollywood at a time when many other Los Angeles builders have paused work in the face of high interest rates and construction costs that make it harder to build profitably.

Simon is banking on the lasting stamina of the entertainment industry even as it goes through structural changes in the age of streaming, and the enduring 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 will include five soundstages and support facilities, including offices and space to keep trucks, production equipment and actors’ trailers.

Simon recently launched construction of the $450-million Echelon Studios complex, shown in a rendering, on Santa Monica Boulevard on the site previously occupied by a Sears store.

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( 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 Television Center, which was once home to Technicolor’s film manufacturing laboratory and Metro Pictures Corp., which became part of Metro-Goldwyn-Mayer in the 1920s. Among Metro’s stars were Rudolph Valentino, Lillian Gish, Ramon Novarro and Buster Keaton.

Before he founded his own company 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 Academy of Motion Picture Arts and Sciences headquarters site 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.

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The historic Art Deco Echelon Television Center studio complex in Hollywood, which will undergo a $600-million makeover.

The historic Art Deco Echelon Television Center studio complex in Hollywood, which will undergo a $600-million makeover.

(Luis Sinco / Los Angeles Times)

You chose a long time ago to focus your efforts on Hollywood. What made you think it had a leg up on other real estate markets?

I always knew Hollywood is the biggest brand in the world. Everybody knows what Hollywood is — films, television, celebrity — and that is just a great brand to have while you’re developing. It was surprising that there was not a lot of institutional investment there for many years. What really got me going was the CNN building.

What happened with that building? Larry King used to broadcast his shows there.

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We had the opportunity to buy the building in the early 2000s when I was with Broadreach Capital Partners and we didn’t want to lose its high-profile tenant, CNN. They had a deal on the table to move to 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 did a 20-year lease with them. That really said to me that there’s a market in Hollywood and there’s really no focus from an institutional landlord mindset, no investment dollars coming in, because there hadn’t been new studios or soundstages built for decades.

You continued to work for other developers until six years ago when you formed your own company. What made you think it was time to take the leap?

We said, “This industry is really growing. There seems to be strong demand for content, streamers are growing and a lot of production is happening.” 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’s your company doing now?

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We’ve got about 1.6 million square feet in development. All entitlements are in place with the exception of Television Center, which is still going through city approvals. This is all about creating a portfolio of assets that caters to this entertainment user base. Between our two studios we’ll have about 10 soundstages and a nice critical mass.

A lot of 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 to where the world is today, where interest rates are and the cost of debt and construction costs and everything that’s going on in the world. But we’re of the mind that our locations are great. They’re infill locations in the heart of Hollywood.

The demand for media and content is having its ups and downs like any growing industry does. There will be consolidations and things like that, but at the end of the day, that demand is going to continue to be there. And for that demand to be there, quality product, what I call the manufacturing facilities, needs to be put in place and it needs to be state of the art.

Would that slow down the trend of movie and television production leaving L.A. for other cities?

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With artificial intelligence, LED screens and other technology [filmmakers] can create scenes inside of a soundstage that feels like you’re in New York or Paris, but you’re really in L.A. The more that content can be created locally, the better for the talent.

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Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO

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Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO

Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.

Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.

The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.

“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.

Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.

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Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.

The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.

“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”

Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.

Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.

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Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.

“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”

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Angry Altadena residents ask officials to halt Edison’s undergrounding work

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Angry Altadena residents ask officials to halt Edison’s undergrounding work

Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.

In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.

The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.

“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.

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The council voted unanimously Tuesday night to send the letter.

Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.

“We recognize this community has already faced a number of challenges,” he said.

Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.

Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.

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The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.

But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.

Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.

Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”

Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.

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“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.

They want the project halted until the problems are addressed.

Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.

The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.

Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.

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But some residents, who need to dig long trenches, say it will cost them much more.

“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”

Other fire survivors complained of Edison’s lack of planning and coordination with residents.

“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”

Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.

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Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.

It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.

The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.

The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.

The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.

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Oil Prices Rise as Investors Weigh Cease-Fire Extension

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Oil Prices Rise as Investors Weigh Cease-Fire Extension

Oil prices rose and stocks moved slightly higher on Wednesday as investors tried to make sense of President Trump’s decision to extend the cease-fire with Iran despite doubts about the status of another round of peace talks.

An adviser to Mohammad Bagher Ghalibaf, the influential speaker of the Iranian Parliament, dismissed the cease-fire announcement, saying that it had “no meaning.” He equated the U.S. naval blockade with bombings, with commercial vessels coming under attack near the Strait of Hormuz, the crucial shipping lane that has been at the center of a growing energy crisis.

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