MTV to Stay, Expand

By Olin Ericksen
Staff Writer

June 8 -- In the wake of a multimillion dollar deal to expand Yahoo's presence in Santa Monica, MTV reportedly inked a $43 million dollar lease renewal Monday that will keep its corporate headquarters planted on Colorado Avenue for another decade.

The reported lease for the 128,000-square-foot space will also expand the Viacom subsidiary's office space by another 22,000 square feet, signaling the cable television music channel's anticipated growth.

That news was music to the ears of the local Chamber of Commerce officials.

"We're very happy to see them stay and expand here," said Kathy Dodson executive director for Santa Monica's chamber of commerce.

"They are exactly the type of business we need to see stay in Santa Monica," she said, noting that the sound recording and motion picture companies make up the fourth largest industry in the city.

The decision to stay in Santa Monica was no sure thing, according to press reports. MTV was considering alternative locations, according to officials from Madison Partners, which helped broker the deal.

For a businesses to stay in Santa Monica is no small feat, considering the prime price of real estate in the area, Dodson said.

"There's no doubt that Santa Monica is a very expensive place to live and do business," she said. "There was a period where there were a lot of businesses considering moving to Downtown Los Angeles, and there was a somewhat stagnate real estate market, but I think that's passed."

The City, she added, does not go out of its way to attract and keep such businesses in the area.

"It definitely is not because the City offers incentives to these companies," Dodson said. "Santa Monica has never offered incentives."

Despite the high prices and a lack of perks, businesses, such as MTV and Yahoo, have not only stayed, but are expanding.

"Yahoo said it best that it's a quality of life issue," said Dodson. "You can have a campus type atmosphere, rather than a high-rise. People want to live here and want to move here."

In late January, Yahoo officials announced a deal to lease nearly 65,000 square feet near MTV and have plans to expand to nearly 230,000 square feet by 2008, enough for 1,000 employees, a fitness center, lap pool, shops, valet parking and basketball, tennis and racquetball courts.

The larger facility will allow Yahoo to merge its media content -- including music, sports, movies, financial news and games - into a new division, the Yahoo Media Group. Company officials hope the move will build stronger relationships in the entertainment industry, located in sunny Southern California.

The LA Times projected the Yahoo lease to hover around $100 million.

In addition to MTV and Yahoo, Colorado Avenue hosts other entertainment giants, including Sony Music Entertainment and the Universal Music Group.

Internet and entertainment companies account for $1.3 million of the $18.6 million the City collects in business license taxes, according to City finance officials.

The biggest chunk -- $1 million -- comes from film and television-related companies, followed by $262,000 from internet-related companies and $55,000 from sound recording-related businesses.