Capitol Records adds momentum to long-awaited Hollywood revival.

We've reported recently that Hollywood is finally starting to show some signs of economic revitalization. And the trend continued last week with a pair of semi-landmark events in the evolution of Tinseltown real estate.

One, which we initially reported last May, is that Capitol Records Inc. has agreed to stay at its landmark "stack of records" tower and undertake a substantial expansion and renovation of the complex.

The City of L.A. has agreed to acquire adjacent to-be-redeveloped property and lease it to the record company, which plans to develop additional studio and commercial space.

In consummating the deal, Capitol's representatives worked closely with Mayor Richard Riordan's Office of Economic Development, the Community Redevelopment Agency and Councilwoman Jackie Goldberg's office.

The federal government is expected to kick in $3.8 million to help the CRA acquire land for a big parking structure, serving both Capitol and the public, adjacent to the famous Vine Street tower.

Rocky Delgadillo of the Mayor's Office of Economic Development was the city's lead negotiator, while PM Realty Group's Carl Muhlstein helped Capitol with the land assemblage and strategic planning.

Further announcements regarding plans by the public-private partnership are expected to follow.

The other key vote of confidence is the purchase of the 300,000-square-foot Hollywood Center Building, which has 50 percent more office space than any other Hollywood commercial property.

The buyer is the third-generation, family-run real estate company after which Foster City (in the Bay Area) was named. The $15 million acquisition of the 22-story tower at 6255 Sunset Blvd. is the first Southern California investment for Foster Enterprises, principal Mark Foster noted.

The specific buying entity is a limited liability company called Sundial LLC, of which the Foster family owns 95 percent and Bay Area real estate veteran John Papine owns 5 percent.

Florida-based Ocwen Federal Savings Bank (formerly Berkeley Federal) provided acquisition financing.

The seller is an affiliate of recently recapitalized Canadian real estate giant TrizecHahn Corp. (formerly Trizec Properties Ltd.), which had purchased the tower not long after it opened in the early 1970s.

Trizec recently sold another of its longtime local holdings - the 18-story Wilshire Center Building at 3255 Wilshire Blvd. in the Wilshire Center district of Los Angeles. And it is also selling the 14-story Imperial Bank/Airport Freeway Building at 9920 La Cienega Blvd. in Inglewood.

Mark Foster said the immediate task for Hollywood Center's new owners is to remodel the tower's lobby and find tenants to lease its 85,000-some vacant square feet.

Although Hollywood Center lost some key tenants amid the early-1990s corporate defections from Hollywood - Motown Record Co. most notably - Foster said several entertainment-related tenants have expressed interest in the building.

"Hopefully, we'll find a large tenant to take a couple floors and get signage," he said, referring to prospective replacements for the First Interstate Bank logo that had helped identify the tower for years.

While overall office vacancy in the Hollywood district still exceeds 20 percent, Foster noted that the market's best buildings can collectively claim a much healthier occupancy rate.

Foster Enterprises was founded by the late P. Jack Foster Sr., grandfather to Mark and his brother Jack Foster III. Along with its Bay Area activities, Foster Enterprises built Waikiki Beach's first highrise and other Hawaiian development projects.

The firm had been investing in Bay Area properties during the early-1990s recession, but the market there "turned around," leaving few "value-added" opportunities in Foster's home turf, Mark Foster said. But Hollywood, and Hollywood Center in particular, definitely offer an opportunity to add value through expert asset management, he added.

The new owners retained Charles Dunn Co. to manage and lease Hollywood Center. CB Commercial Real Estate Group and Century Park Partners represented Trizec in the sales negotiations, while The Hobin Co. helped the buyers close the deal.