Feathers Fly Before Broker Sells Old Theater
In a dark theater in Los Angeles, a pigeon searches for a place to nest. Suddenly, a disturbance near the stage startles it from the task. W. Darrow Fiedler, CCIM, CRS, GRI, appears on stage bearing a 12-volt flashlight. The circuit breakers, located near the lobby, had been turned off long ago to prevent accidental fires. To turn on the lights, Fiedler is forced to enter the theater from the rear, since the front doors are locked securely with chains.
He jumps off the stage and slowly walks up the aisle of the 1,030-seat theater, with only the narrow flashlight beam to guide him. Hearing a commotion, he freezes next to a row of velvet-upholstered seats. He scans the surrounding area, but the beam barely penetrates the darkness engulfing him from the 50-foot frescoed ceiling.
Deciding to move on, Fiedler reaches the lobby and mounts the stairs to the control room when he notices feathers — on the floor, stairs, and banister. Sweeping the beam up the stairs, he is shocked to find several dead pigeons blocking his path.
Feeling a strange breeze on his neck, he turns and suddenly a pigeon swoops out of the darkness and flies through the beam of light. As visions of Hitchcock's The Birds race through his mind, Fiedler leaps over the pigeon carcasses and flips the circuit breakers to fill the theater with light.
Outside, the potential buyer of the theater wonders what is keeping the broker so long and prepares to investigate when Fiedler emerges from the theater with several pigeon feathers stuck in his hair.
Home of the Birds
he vacant venue, the Vision Theatre in Leimert Park Village in South Central Los Angeles, had become a quiet habitat for the local pigeon population when the First Bank of Beverly Hills retained Fiedler, operating principal and real estate consultant with Keller Williams Realty, in July 1999. First Bank had acquired the theater through foreclosure and had been unable to find a suitable buyer for several years.
Built in 1937 by Howard Hughes, the 17,258-square-foot Vision Theatre originally was a first-class movie venue with an adjacent restaurant. “Each time I went to show this property, it was like going back in time to the 1930s. I reminisced over what people were wearing, what they were driving, and what they were eating,” Fiedler says. “I could envision seeing a Fred Astaire and Ginger Rogers movie or Gone With the Wind or some other great romantic old movie.”
Unfortunately, the theater fell on hard times, and over the years it repeatedly closed and reopened, and the 24,000-sf restaurant had three retail spaces cut out of it. When First Bank acquired it, the theater accommodated a live playhouse run by a well-known television celebrity.
Before contacting Fiedler, First Bank had been attempting to consummate a transaction with the city of Los Angeles without a broker's assistance. However, the negotiations fell through, and after being hired, Fiedler visited the property to formulate a marketing strategy.
“The exterior was in fair to good shape, but everything was boarded, fenced, and chained,” he says. “It was like a prisoner being held captive in its own neighborhood. Most of the properties around it were occupied and in the process of being improved to some degree or another. This was the grand matriarch of the area, [but] it looked like a fallen queen ... the opportunity of selling it created an immeasurable excitement. I couldn't wait to start the marketing process.”
His marketing strategy included quality signage, Association of Industrial Realtors regional multiple listing service and other listings, an Excel custom self-designed marketing form and mailer, Internet marketing, and major metropolitan newspaper advertising.
Soon he had several interested parties who wanted to tour the theater.
“The first time [showing the property] was an adventure,” Fiedler says, recalling the episode with the pigeon. Luckily, the rest of the live pigeons eventually found their way out of the theater, and Fiedler never was disturbed by them again.
Although market conditions in Los Angeles were favorable at the time, Fiedler initially encountered some difficulty in marketing the property due to a lack of available financing. First Bank was unwilling to finance the purchase, as they already had suffered a substantial loss from the foreclosure. The property was located in a low-to-middle-income area “that was just in the beginning stages of an economic upswing,” Fiedler explains, and commercial lenders were hesitant to finance such an uncertain investment. Thus, Fiedler had to find an all-cash buyer.
To add to the financing woes, the theater had limited parking and substantial deferred maintenance. The roofing, heating, and electrical systems needed major repairs, and the theater's hand-painted art deco ceiling needed restoration. All of the property's restrooms needed cosmetic work and updating to comply with the Americans with Disabilities Act.
During the six months he marketed the Vision Theatre complex, Fiedler showed the property to 17 prospective buyers. Most were nonprofit organizations that wanted to remodel the existing structure. He received several offers to buy pieces of the property, but First Bank preferred to sell the theater, restaurant, and three retail spaces as one package.
City's Interest Rekindled
After seeing the offers generated by Fiedler's marketing strategies, the city of Los Angeles renewed its interest in purchasing the property. “The city of Los Angeles realized that this was a property [it] needed to acquire and at the listed price” of $1.8 million, Fiedler says.
“Once I was in a dialogue with the city of Los Angeles, [it] tracked every move I made, so as not to jeopardize [its] opportunity for the acquisition,” Fiedler continues.
Dora Gallo, an official in Council District 8 of the Los Angeles City Council, spearheaded the acquisition and monitored the process through the various departments. The city put up a $100,000 nonrefundable deposit and wanted to buy the entire complex, which was agreeable to First Bank. Also, the city would not have to meet the same parking requirements for theater and restaurant uses as a private owner, since it already owned an adjoining metered parking lot.
After First Bank consented to the terms in the city's letter of intent to purchase, the Los Angeles Housing and Community Redevelopment Committee submitted a recommendation letter, the acquisition reasons, and terms to the City Council for approval by the mayor.
Approval took time. The City Council held three public readings and hearings of the recommendation before sending it to the mayor's office for signature. Once the recommendation was signed by the mayor, escrow was opened and the transaction soon closed, 12 months after the city initially showed interest.
Currently, the Community Redevelopment Agency of Los Angeles manages the Vision Theatre. Its ultimate goal after completing repairs is to lease it to a nonprofit organization for use as a community theater, restaurant, and offices, Fiedler says.
“Staying with unlimited beliefs ... enabled me to get this property sold,” says Fiedler, who believes there is a qualified buyer for every property. “City buyers are terrific, provided you have patience, diplomacy, integrity, and accountability. They are looking for a win-win opportunity just as much as any other private or institutional investor.”