Hollywood hopes Cirque du Soleil brings back its glamour

LOS ANGELES -- Hollywood is betting on a company founded by a former fire-eater and freakish-looking acrobats to help put glitz back into its tarnished image.

Cirque du Soleil, the Canadian dance troupe that started as a street-act curiosity and morphed into a large and fast-growing company, is coming to Hollywood.

In a just-approved complicated financial entanglement among Cirque du Soleil, a major developer and the city of Los Angeles itself, Hollywood is on track to be one of 11 cities with a permanent show. If one more financial hurdle is passed, Cirque du Soleil in 2011 will open a Hollywood-themed show in the Kodak Theatre, home of the Academy Awards.

Supporters hope the Cirque du Soleil show, still in development and under wraps, will be the push Hollywood needs to begin morphing away from its current neglected state filled with a collection of run-down trinket shops.

"We have a chance to create something here," says Leron Gubler, CEO of the Hollywood Chamber of Commerce. "Hollywood has never been as glamorous as people imagined."

Hollywood continues to be a popular destination for tourists who come to Los Angeles. But despite repeated efforts to spruce up the area, many spots of storied Hollywood Boulevard are run-down or filled with peddlers of cheesy mugs, T-shirts and posters.

Enter Cirque du Soleil. The privately held company based in Montreal has gone from reinventing the tired circus to playing a role in turning cities into a draw. The company also has nine shows that travel for temporary appearances.

Full speed ahead, despite recession

The Hollywood project is just the latest expansion avenue for the company that keeps growing despite the recession, says CEO Daniel Lamarre. "People are so driven by numbers, and we're not," he says. "We can fight this recession by continuing to invest with what we're good at: good concepts and good shows."

Hollywood isn't the first place to look to Cirque du Soleil for a breath of life. Las Vegas hosts seven different Cirque du Soleil shows. And in November, Chicago will be home of the newest permanent show, when a Vaudeville-inspired performance opens.

City by city, Cirque du Soleil has turned into a business phenomenon by its own right. The company began in 1984 with 20 street performers, including founder and primary owner Guy Laliberté, a former fire-eater and stilt-walker.

Today, Cirque du Soleil is still privately held and doesn't typically discuss financial details. The company, though, is currently generating $800 million a year in revenue and growing, Lamarre says.

Shows are elaborate, dramatic

Cirque du Soleil comes from humble beginnings. After several brushes with financial troubles, the group found a strong reception in 1987 at an arts festival in Los Angeles. That kicked off interest in the U.S.

Describing a Cirque du Soleil show to those who haven't been to one isn't easy. The shows are known for their elaborate costumes, dramatic music and physical stunts that appear to defy human anatomy.

Fans see Cirque du Soleil's entrance in Hollywood as a winner for several reasons. For one thing, the show would be set up in the largely vacant Kodak Theatre.

While the Kodak Theatre gets attention early in the year as the host of the Academy Awards, it's often empty nearly the rest of the year, says Jack Kyser, founding economist of the Kyser Center of the Los Angeles County Economic Development Corp.

Millions to get show going

But getting Cirque du Soleil to go Hollywood comes at an enormous cost. The owner of the theater, developer CIM Group, is putting up $20 million of its own cash to retrofit the theater. Meanwhile, Cirque du Soleil is investing $44 million to develop and produce the show.

Due to the difficult environment for lending, the city of Los Angeles has also agreed to apply for a $30 million loan through the U.S. Department of Housing and Urban Development. The loan is part of a $350 million credit line the federal government provides to Los Angeles for projects that create jobs for primarily lower-income residents.

CIM will be responsible for making the interest payments and has pledged $30 million of its ownership stake in its Hollywood property as collateral. The city is hopeful the project will result in 858 full-time-equivalent jobs and rev up the renaissance in Hollywood, says Julie Wong, spokeswoman for Los Angeles City Council President Eric Garcetti. "Cirque's shows all over the world are an attraction. We hope this will bring people to Hollywood," she says.

Certainly, there are big-top-size risks. The HUD loan Los Angeles is applying for has many stipulations and could still fall through, although that's not anticipated, Wong says.

There's also the risk the show bombs. Kyser says the show needs to be unique to lure visitors who may have already seen Cirque du Soleil shows in other cities.

But Lamarre is confident Cirque du Soleil's uniqueness will show through. The show is expected to be tied to the history of Hollywood and the movie business and will have surprises. "This business is driven by creation," he says. "If you have a good show, you have a business."