CRA Tentatively OKs Loan for Hollywood Museum

Backers of the proposed Hollywood Entertainment Museum received a much-needed financial boost Thursday as the Community Redevelopment Agency tentatively approved a $4-million loan to buy and rehabilitate the historic Pacific Theater on Hollywood Boulevard.

The project, on the drawing board but delayed by fund-raising problems and site changes for six years, still has a long way to go before organizers can acquire the $10-million theater site.

The CRA loan, which requires City Council approval, is contingent on the museum group raising the additional $6 million to $7 million to buy the site. No CRA funds will be released until the museum group is ready to purchase the site from Pacific Warner Corp. The CRA loan will be secured by the property.

In all, organizers say they must raise about $45 million to rehabilitate the building and acquire the props, exhibits and memorabilia that will be housed in the facility between Wilcox Avenue and Cahuenga Boulevard. Organizers also envision theaters, classrooms, retail outlets and restaurants on the site.

So far, the group has raised and spent about $3 million in private and state funds, said Phyllis Caskey, president of the museum. Caskey said she is confident that the group can raise the needed money within the next 30 months--as called for in the purchase agreement signed with Pacific Warner--and open its doors by 1995.

Caskey said she suspended fund-raising operations a year ago until she could find a location for the museum. Caskey said that with the proposed Pacific Theater site, she will again seek financial support and will focus on the entertainment industry.

CRA Chairman James Wood said the agency does not intend to subsidize the museum beyond the acquisition loan.

“We will not engage in another relationship like the Los Angeles Theatre Center,” Wood said.

The theater center collapsed in bankruptcy last year after the CRA had pumped more than $27 million into the project.

Caskey said there are major differences between the two projects.

“Performing arts always have a difficult time raising money,” said Caskey, adding that the LATC was further troubled by its bleak location on Spring Street in downtown Los Angeles. “In Hollywood, we’ll just be pulling in the people already there.”

In a separate action, the CRA approved a loan program designed to give entertainment businesses a competitive edge if they stay in Hollywood or relocate to the movie capital.

Firms that produce or distribute feature films, or television, radio and music programs, will be eligible for interest-free loans of up to $250,000 under the plan, which must receive City Council approval. If the companies invest an amount equal to the CRA loan, and agree to stay in the area for 10 years, their loans will be forgiven.

The loans would be available to companies in the Hollywood Redevelopment Project. The CRA has budgeted $319,000 for the program through June and plans to increase funding to about $1 million a year.