Morris may expand in Beverly Hills.

The William Morris Agency Inc. may get a new Beverly Hills headquarters, even as competing talent firms are pulling up stakes and leaving the city.

For decades Beverly Hills has been the Madison Avenue of talent agencies. But just as the advertising industry is leaving the famed New York strip, talent firms are fading from Beverly Hills.

Fighting that trend, the owner of an office building at Wilshire and Beverly boulevards filed plans last week to build William Morris a new 201,000-square-foot headquarters. The proposal calls for razing the existing office building's parking garage to make way for the talent agency.

The building's owner, a partnership of New York investment firm George Comfort & Sons Inc. and Morgan Stanley, is pitching the project to city officials as a way for Beverly Hills to keep William Morris, which has outgrown its El Camino Drive headquarters.

"I'm aware that a formal application was filed and one of the principal tenants is William Morris," said Beverly Hills Mayor Stephen P. Webb. "From the city's point of view, this is positive. We have been working very hard to keep William Morris as a Beverly Hills business."

William Morris executives have been involved in planning and designing the new building, sources said. Without William Morris as the tenant, George Comfort & Sons executives have told Beverly Hills officials the project wouldn't move forward.

"In my experience, you're pretty far down the road when you start filing plans," said Mark Robinson, a Studley corporate managing director. "You don't just do this stuff willy-nilly."

William Morris executives didn't respond to requests seeking comment.

Steve Solomon, a spokesman for George Comfort & Sons, said a deal with William Morris is still being negotiated. "This deal hasn't been signed," he said. "Everybody hopes the deal goes through but until it does, we can't comment."

After Creative Artists Agency announced two years ago that the firm is relocating to Century City, elected officials in Beverly Hills have gone on the offensive to halt further talent agency defections.

While some firms, such as United Talent Agency Inc., have opted to stay put, others like International Creative Management Inc. are likely moving.

ICM is near a deal to take about five floors in Century City's MGM tower. A 12-year lease in the building could be worth upwards of $55 million, according to sources close to the transaction. ICM spokesman David Shane said a deal hasn't been signed.

Robinson, who specializes in representing entertainment industry clients, said even though CAA is leaving--and ICM may follow--the agencies will still do a lot of business in Beverly Hills.

"They might be moving outside the city limits," he said, "but it's not like anyone's going to have to give up their favorite table."

Still, Beverly Hills has been especially concerned about losing William Morris, the largest agency after CAA. William Morris, the country's oldest talent agency, has been a Beverly Hills fixture for 76 years.

Beverly Hills officials tried to work out a deal so the firm could build a new headquarters on city-owned land in a former industrial area of the city. Officials also offered to help the agency acquire contiguous space near its existing campus.

"While Hollywood has been the capital of the entertainment industry in name, for all practical purposes the capital has really been Beverly Hills," Webb said. "We really want to retain that status."

Agencies adapt

All the talent agency shuffling comes as the industry is entering a wave of expansion and consolidation.

The agencies are trying to counter the challenges faced by all entertainment companies--sagging box office sales, declining DVD sales and slowing TV syndication.

Not a week seemingly goes by without reports or an alleged attempt by one talent agency to buy another. ICM was considered a target of Paradigm until late last year when ICM Chief Executive Jeffrey Berg sold a $100 million stake to a private equity firm.

Flush with that cash infusion, ICM is now rumored to be a buyer. The agency is said to be close to a deal for rival Endeavor Agency LLC.

Meanwhile, the Gersh Agency, a shop known for its comedy talent, last month bought Beverly Hills-based Steve Feldman & Associates, a sports management firm. The new Gersh Sports division gives the agency credentials to represent sports figures in salary negotiations, in addition to acting, licensing and marketing deals.

Also opening a sports division is industry leader CAA, which recently lured superstar sports agent Tom Condon to head up its new division.

CAA continues to grow at a rapid pace. In the last several months, CAA has boosted the amount of space the company is taking in its new Century City headquarters at 2000 Avenue of the Stars. CAA has taken an additional 50,000 feet, bringing its total presence to 233,000 square feet.

Despite all the industry upheaval, some talent agencies have committed to staying within Beverly Hills.

Endeavor last year moved into new 70,000-square-foot digs at 9601 Wilshire Blvd. and Paradigm, which had been in L.A., shelled out $50 million to buy the 30,000-square-foot building at 360 N. Crescent Drive.

And after scouring the Westside market, United Talent Agency inked a 10-year, $30 million deal in 2005 to stay in the Wilshire Rodeo building at 9560 Wilshire Blvd.

"Talent agencies are extremely important to the Beverly Hills business community," said Dan Walsh, chief executive of the city's chamber of commerce. "They're filled with high-paying jobs and their employees eat at our restaurants and shop at our stores."

Out of room

Like its rivals, William Morris has also faced some recent turbulence. The firm was thrown into internal upheaval in late 2004 partly after a new management team pressured the firm to leave Beverly Hills for a location in a Westwood Village high-rise.

The agency's board members, who own the firm's current office buildings, nixed the deal and sent some of the company's top executives packing, citing "philosophical differences."

Even so, the agency has outgrown its location and needs to expand in order to make room for its expanding operations.

William Morris' proposed new headquarters, designed by architecture firm Gensler, would be nearly twice the size of its current two-building campus, where the city has renamed the street William Morris Place.

Plans filed with the city's planning department call for a six-story office building with shops and restaurants on the ground floor and a five-level underground garage with 832 spaces. Industry sources believe the construction costs will likely exceed $100 million.