Dutton's Brentwood facing uncertain future as Munger mulls development.

For decades, Dutton's Brentwood Books has survived on the kindness of its landlords who have kept the independent bookstore's rent below market rates in a very expensive part of town.

But those days may be ending as one of L.A.'s richest residents considers replacing the Westside institution with a more lucrative mixed-use project of apartments and retail, making Dutton's fate uncertain.

Charles Munger, worth an estimated $1.4 billion, has watched as his second wife, Nancy Munger, and her brother, David N. Barry III, managed the property inherited from their parents. Barry has been the benevolent godfather of sorts to Doug Dutton, charging the 54-year-old bookstore owner less than $2 a square foot-roughly half the going rate-for the sprawling bookstore space that started out in one corner and now covers 5,000 square feet.

Munger feels that the San Vicente Boulevard property is woefully underdeveloped and needs to live up to its economic potential. As space becomes scarce in the city, mixed use has been the answer for many developers and Munger believes it will work well in the location where Dutton's has been for nearly 20 years.

"There's no question that it is an under-improved property," said the 78-year-old Munger, who is chairman of Pasadena-based Wesco Financial Corp. and holds a substantial stake in Daily Journal Corp. a legal news publishing company. Munger made his fortune when he was introduced in 1959 to investor Warren Buffett of Berkshire Hathaway Inc. Munger owns 17,000 Betkshire Hathaway shares valued at $74,700 a share. "The family has been talking about some kind of development for 40 years, but nothing ever seems to happen' he said.

Barry's bargain basement lease rate enabled Dutton to weather the onslaught from the major bookstore chains such as Barnes & Noble and Borders Books and Music.

Many other independents haven't been as fortunate. In July, the Midnight Special bookstore on the Third Street Promenade in Santa Monica announced it would be looking for a new location because its landlords could no longer afford to subsidize the rent that was $400,000 a year below market value.

While big bookstore chains can afford to pay higher rents and weather economic downturns longer, independents have a harder time making a go of it. Also, big chains are able to negotiate better wholesale book prices.

Independents tend to stock more obscure titles that stay on the shelves for months rather than buying hot-moving bestsellers that are gone in weeks.

For Dutton, it has been nice to have an understanding landlord like Dave Barry and his sister, who could afford to keep his rent down.

The 75-year-old Barry, an attorney, is a former vice president for Edison International, parent company of Southern California Edison.

Barry and his sister had never seen any reason to redevelop the property, which would require entitlements from the city, approval by the Planning Commission and likely attract opposition from the Brentwood Homeowners Association for the increased traffic.

But a little more than one year ago, when Barry was on vacation, the bookstore owner said he received his very first phone call from Munger, who asked if the bookstore owner had ever heard about "those mixed-use spaces."

Munger proceeded to talk about a possible development that would take advantage of the property's prime location, surrounded by upscale restaurants, boutiques and commercial offices in the well-to-do Brentwood area.

Shortly after Barry suffered a stroke six months ago, Munger called the bookstore owner again. He mentioned that if the project got off the ground, Dutton's might be able to occupy some of the retail space. But Munger never discussed a lease rate. And Dutton isn't too optimistic that Munger is willing to lease any retail space below market value, which is around $4 a square foot in that area.

Plans uncertain

Then there's the question of what Dutton would do during the time it would take to complete the project.

"Charlie is cut from a different cloth than his sister and brother-in-law," Dutton said. "His interest is maximizing profit and making sure the property earns what (it) ought to earn."

Barry, on the other hand, is an ardent lover of books and opera. He is on the Los Angeles Opera board of directors, and recently traveled to Europe to hear the works of Wagner performed by the Berlin Philharmonic.

He also is president of the board of the Los Angeles Arts & Music School, which nurtures the artistic talents of children in East Los Angeles.

Munger said his brother-in-law was unavailable for comment because he has had two minor strokes in the last year, including one suffered while in Europe. Phone calls to Barry's office, located in the same complex as Dutton's Bookstore, went unanswered.

While Monger insisted Dutton's Bookstore would not be moving soon, he did say there are various development proposals knocking around, especially since another branch of the Barry family owns an adjacent lot. That adds up to 75,000 square feet that could be developed.

"Everyone (in the family), as a matter of theory, would like to have it more rationally developed some day," Munger said. "But when that someday will be is an interesting question."

But Dutton, who has been at the location since 1984, would like to have some answers soon. "Changing gears," he said, "is not something I look forward to."

Dutton comes from a family of bibliophiles and has built his Brentwood business into one of the most respected bookstores on the Westside. His parents, William and Thelma Dutton, opened the first Dutton's bookstore in North Hollywood in 1961.

In 1984, the old Brentwood Bookstore, which had opened in 1960 on San Vicente Boulevard, came up for sale because the new owners wanted to retire.

Doug and his older brother Dave took over the business and its lease, operating it together for a year before they split the business into two with Dave taking North Hollywood and Doug staying in Brentwood.

Dutton's Brentwood Bookstore started in one small retail space located around a courtyard. As other retailers left, Dutton took on new leases until finally the bookstore has a four sections, each dedicated to a different subject.

"Our philosophy is keeping good books in stock said Ed Conidin, the bookstore's general manager. "We don't send them back to the publisher very quickly. And we have a feel for what people who come here like."