Hollywood business redevelopment fight divides its Chamber.

Hollywood business redevelopment fight divides its chamber

One year after Larry Kaplan took over the reins of the troubled Hollywood Chamber of Commerce, the 1,500-member organization is still racked with controversy befitting a political thriller.

Kaplan's chamber, the third-largest organization of its kind, in Los Angeles County, faces a business community bitterly divided over how to improve tourism, manage growth, and clean up Hollywood Boulevard Moreover, the $922 million Hollywood Redevelopment Project -- long considered key in making the city a profitable hub for office, retail and development activity -- remains stalled in the courts.

The chamber itself, as key indicators show, is in transition. The organization's paid membership has flattened out at 1,500, off 200 from 1989 and 400 from two years ago. The projected 1990 budget is $1.4 million, up only $200,000 from the year before. The chamber's 1988 budget was $1.25 million.

Now critics are beginning to question the judgment of Kaplan, a 36-year-old New York native who replaced celebrity announcer Bill Welsh late last April as president.

Kaplan, former chief of staff to Los Angeles City Councilman Michael Woo, came under fire two weeks ago for giving a former city employee a $56,000 contract to organize Hollywood Boulevard merchants. But that was hardly the first time the chamber's role in the glamour capital was questioned. In late March the chamber agreed to surrender control of a $250,000 trust fund used to maintain the landmark Hollywood Sign after complaints arose the chamber misused those monies.

The straight-talking Kaplan, a former executive at ICPR public relations, says dissent is part of doing business in the unpredictable economic and social environment that is Hollywood.

"The average guy might not see many changes in the chamber," said Kaplan. "We haven't done nearly as much as I'd like in terms of community and membership outreach and economic development, but you can't do those things until you have a strong foundation."

Kaplan to date has focused his efforts almost solely on reorganizing the chamber's internal operations, though to have been in a moderate state of disrepair when Kaplan was recruited. The organization's marketing and licensing program is being rebuilt, Kaplan said, so revenues from trademark sales of everything from mugs to T-shirts rises to $375,000 by the end of 1990, compared with $250,000 last year.

(In 1989 the chamber dropped its bid with the U.S. Patent and Trademark Office to get exclusive right to use the name Hollywood on products in the wake of opposition from Hollywood, Fla.).

Member relations are also being mended, and the number of those cancelling their affiliation with the chamber no longer exceeds new recruits, according to Kaplan, who refused to disclose his salary. He has also purged 75 percent of the chamber's 15-member staff, reworked the chamber's $1.5 million budget and solidified his relationship with the 45-member board of directors; that slate has had a 25 percent turnover rate since Welsh was ousted.

"Larry arrived on the scene when we needed new leadership and efficient internal structuring," said Don Tillmam, the organization's chairman when Kaplan was brought in and Welsh was given the largely ceremonial post of office of the president. "He (Kaplan) has made massive improvements."

But for some perennial chamber critics, that's not good enough. Small business owners in Hollywood have long suspected that the chamber -- together with the Community Redevelopment Agency and Los Angeles City Councilman Michael, who represents Hollywood -- have conspired to gentrify and over-develop the city at the expense of small merchants.

"It is a big Hollywood Mickey Mouse mafia, and that's no joke," said Doreet Hakman, who runs the Snow White Coffee Shop at the corner of Hollywood Boulevard and Highland Avenue. "All these years the chamber has benefitted from the Boulevard and the Walk of Fame but not one penny came back to help small businesses in the commercial core. Larry sees small businesses as a pain the neck."

Kaplan, who admits the chamber deserves some of the criticism thrown its way, rejects the view he is callous to the small business person. He noted the formation of the crime-watch group among merchants, a new small business committee within the chamber and a $150,000 chamber donation to help clean up the trash on Hollywood.

"I've don't think small businesses are a pain in the neck," Kaplan retorted angrily. He said he has "sweated payroll" as chief financial officer of an automotive parts company. "The fact of the matter is that the chamber needs to do a better job in addressing the needs of small businesses -- crime, cleanliness, tourism. We are doing a major reorganization."

The fate of that reorganization, though, may rest upon the success of the CRA's redevelopment project, the 1,100-acre revitalization plan that has created a wide-open debate about the pace of Hollywood's economic development while polarizing rival, citizen-business advisory groups.

Until the lawsuits surrounding the redevelopment project are resolved, a number of critical development projects remain in limbo -- as well as the chamber's and community's future.

The most important of those projects is the $300 million Hollywood Promenade, a massive 1.1 million square foot project that would wrap around Mann's Chinese Theatre. That project, still unbuilt after five years, has been the subject of lawsuits by the same group, Save Hollywood Our Town, that has opposed the CRA's strategy to wipe out blight through commercial development.

The Promenade's developer, Indiannapolis-based Melvin Simon & Associates, says the complex's plans have been thwarted by its inability to secure financial backing, a major hotel operator and technical approvals from the city. But the developer says Kaplan has done a good job given the situation.

"From our perspective, we have been very pleased with Kaplan's performance," said Michael Marr, vice president for development at Melvin Simon. "He has his finger on the pulse of the business community. He's also very accessible."

Indeed, much hinges on the fate of the Promenade, specifically the 1.7-million square-foot "urban village" proposed by the Hollywood/Highland Partners and financed by the wealthy Bass family of Texas. The only major project that has actually had a groundbreaking is the $36 million Hollywood Galaxy, a three-level movie theatre and retail complex being developed by Los Angeles-based Kornwasser & Friedman Commercial Properties. But even that project is tied up in red tape at City Hall.

Those unbuilt projects, the fact that the Hollywood Roosevelt Hotel across the street from the Promenade went bankrupt last year and the uncertainty surrounding the CRA's revitalization plans are major concerns for Kaplan.

"It hasn't done a hell of a lot of good for the chamber's image because people associate redevelopment with the chamber. The fate of the Hollywood Chamber of Commerce is linked with the Hollywood Redevelopment Project. But the reality is that while the chamber plays a role in being a booster for the community and attracting investors, the real power lies on factors beyond the chapter's control," Kaplan said.

Those factors include the coterie of Hollywood gadflies that distrust Kaplan, the relationship between the chamber and Woo's office, the state of the regional economy and the ability of policymakers to cut back bureaucratic red tape and decide growth policy.

It also depends on how effectively the CRA spends $20.6 million in Hollywood this year on its historic preservation program, a tree-planting project and transit and design studies.

Don Lippman, who runs a Hollywood-based court-reporter business, doesn't think it's that complicated. He says Kaplan's ties to Woo still run deep and that the chamber "hoodwinked the community" by secretively making him president.

"The Hollywood Chamber of Commerce and the CRA are working hand in hand to destroy the (Hollywood) Boulevard so small business will be pushed out, the CRA can save millions of dollars in relocation fees and big developers can move in." fees and big developers can move in." The fact that the chamber, the CRA and Woo's office agreed to allow the Metro Rail be built under Hollywood Boulevard -- and in the process disrupt the operations for small businesses during the construction phase -- is proof Lippman said.

Comments like that infuriate Kaplan, who admits he isn't the "rah-rah, ribbon-cutting" chamber president people expect.

"The anti-redevelopment people are basically obstructionist. They are misguided and don't have an understanding of what the average business person wants. This chamber, through it all, has enormous intrinsic strength and my challenge is to make a difference. It's a turn-around situation."