CRA reports early success with plan to retain Hollywood tenants.

The Community Redevelopment Agency's fledgling program to halt what some have called an entertainment business exodus from Hollywood is starting to show tangible results, according to Cooke Sunoo, manager of the CRA's Hollywood project.

Loan checks to seven firms totaling $1 million are to be dispersed later this month in an effort to help them improve and enlarge their businesses -- and stay in Hollywood.

The CRA's incentive loan program is geared to aiding entertainment firms operating in the 1,100-acre Hollywood redevelopment zone and attract new ones.

Hollywood has been shaken over the last 18 months with the loss of several high-profile tenants, including Daily Variety, the Hollywood Reporter, the Screen Actors Guild and E Entertainment. There have been other defections by production houses such as Modern Videofilm Inc., which ditched Hollywood for Burbank taking 200 jobs with it. Other production companies have moved to Venice and Santa Monica.

To stem the losses, the CRA has set up the no-interest, 10-year repayment loan program. Sunoo said the CRA is also helping entertainment firms by cutting City Hall red tape to get variances and entitlements quickly for them.

The companies receiving loans are A&M Records, Encore Video, HKM Production Inc., Limelite, a post-production house, Hollywood Digital, Studio Photo Service and Sweitlik, a production company.

The loans are for capital improvements of up to $250,000 and must be matched by the companies. Any loan above that amount would require City Council approval and would slow the loan process by at least four months, according to Sunoo.

The CRA will also dole out $1 million in loans during the first half of 1993. The review process for the new loans begins in January.

The first loan recipients are satisfied with the loans and express confidence that they will prosper in Hollywood. HKM, a television production house specializing in making commercials, is using its $95,000 loan to convert a garage into 3,500 square feet of new office space at its North Ivar Street location.

It will allow the company to hire two additional directors who in turn could employ 50 to 100 people on a part-time basis, according to Larry Morris, chief financial officer.

"We had drawn up the blueprints for this project but had put it on the back burner for 18 months because of this (economic) environment. When the CRA came along -- boom, they made it happen," Morris said.

Hollywood Digital is using its loan to build the first all-digital post-production facility in Hollywood, according to Bill Burnsed, president and founder. He is converting a former business college that had been empty for 18 months. When the work is completed early in 1993, the company will employ 50 people.

"This work will allow us to retain our clients and prevent them from going over the hill (to Burbank)," Burnsed said. "It also helps us attract new clients like Paramount. We came to Hollywood because we feel it is still truly the entertainment capital of the world and there is still plenty of business here."

Moshe Barkat, president of Modern Videofilm, doesn't agree with that assessment. He left Hollywood last August and says Burbank is like "day and night," citing its clean, traffic-flowing streets.

Seedy street life and traffic hangups caused by construction of mini-malls and apartments drove him out of Hollywood after 10 years, Barkat said.

The largest entertainment investment in Hollywood will be made by The Tribune Co. which is planning a four-phase development on its Sunset Boulevard studio lot. The 10-year project calls for an $88 million expenditure that would create two office towers, five new sound stages and a new parking garage, according to Chuck Hines, vice president and studio lot manager for Tribune, whose television station, KTLA, is on the lot.

The project's Environmental Impact Report will be the subject of public hearings early in 1993. That project is viewed as the anchor for Hollywood's east end and would serve as a magnet to attract entertainment companies to its towers, Sunoo said.

The notion that there is a Hollywood business exodus is highly exaggerated, according to Sunoo.

"Certainly, businesses have left Hollywood proper," he said. "But when people refer to the high-profile stuff (Daily Variety) as being an exodus, I think that is awfully parochial. The boundaries of Hollywood as an industry are expanding. The only reason there is a Miracle Mile resurgence now is its proximity to Hollywood. A one mile exodus is a mischaracterization."