Cool Millions

Feature about entrepreneurs who capitalized on the hip reputation of Los Angeles’ Eastside. As the headline said: “Getting rich in an area that prides itself on being the anti-Westside can get complicated. How do you hang on to your street cred when the natives blame you for selling their little piece of boho rhapsody down the river?”

Now that the Eastside is the font of all things hip, a new breed of entrepreneur is cashing in on the buzz. But success is a funny thing in a community that disdains the sorts of vulgar displays common on the other side of town.

Chaim Magnum is having a fantastic year. As a partner in Dragon Talent, a Los Feliz modeling agency specializing in what he calls “hip alternative talent,” Magnum has placed more than 250 punks, drag queens and other denizens of L.A.‘s Eastside into television and prim ads. Suddenly, corporate giants like IBM, Pepsi and the Gap can’t seem to sell anything without the help of a scruffy Eastsider. Not long ago, Magnum spotted a willowy young guy pumping cappuccino on La Brea; two months later, Sam Stefanski had cleared more than $30,000 appearing in ads for Arco, Lexus and Max Factor. These days, when Magnum turns on the television, it seems like his clients are in every other ad.

Magnum has earned enough from the agency to afford his dream car, a tricked-out green and gold Mercedes. The car means a lot to him, but he isn’t enjoying it, really. Driving to and from work, Magnum says he can’t help imagining all the kids in their geezer-chic getups and vintage clunkers glaring at the sleek-young-agent-type rolling in a Benz, muttering to themselves the worst insult imaginable: How Westside.

Success is a funny thing on the Eastside of Los Angeles. And suddenly, a lot of people are laughing.

All around the hood, from the heights of Silver Lake to the flats of East Hollywood, the spoils of the go-go ‘90s are financing the construction of Alternative Nation’s de facto capital. The Los Angeles city clerk’s office reports that the number of new business licenses issued in the area has doubled in the past four years, from 405 to 814. On Sunset Boulevard in Silver Lake, long-shuttered shops now sell Heywood-Wakefield school chairs, vintage clothing and other essential signifiers of L.A.‘s cooler-than-thou crowd, while on Hillhurst Avenue, no fewer than nine new restaurants have opened in the past year, offering everything from organic pappardelle at Purans to—gasp—corporate lattes at the Coffee Bean & Tea Leaf. Meanwhile, houses in the Franklin Hills and Los Feliz are selling as fast as the signs are posted.

Behind this latter-day gold rush is a new class of hipster with a head for business. Playing up their independence and street cred (and playing down their paydays when their ships come in), these alterna-entrepreneurs ;are establishing fiefdoms that put them in league with any pell-mell Westside capitalist. All the while, their casual-chic restaurants, po-mo fashions and indie-rock nightclubs and record labels are profoundly bending the pop-cultural bandwidth, extending the neighborhood’s cachet far beyond the city limits. Ladies and gentlemen of greater Los Angeles—and the world—meet the Eastside moguls.

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IT’S LATE THURSDAY NIGHT AND THE BOOTHS ARE PACKED at Vida, the unmarked Los Feliz restaurant that, more than any other establishment, has set the tone for the Eastside’s self-conscious commercialism. Cruising club sharks sip $9.50 margaritas while a Hollywood Hills crowd in the dining room, their faces dim in the spare spot lighting, picks over domes of puffed bread and architectural towers of charred tuna. The menu features cute little dishes like “Mo Larry Cheese” (smoked pork loin) and “Suzanne’s Goin’ on a Picnic” (salad with Roquefort and French pears). From the drinks to the decor, everything is drenched in ‘tude.

That attitude flows directly from Fred Eric, a 36-year-old former pastry chef who started Vida five years ago. No one has done more to package and profit from the Eastside than Eric, an antsy guy whose baggy Adidas tracksuits and moppish haircut make him look more like an art school dropout than a ragingly successful lifestyle entrepreneur. After partnering with Sean MacPherson and Jon Sidel on the seminal ‘80s eatery Olive, Eric opened Vida in an area whose biggest claim to culinary fame was a taco stand frequented by former New York Times food critic Ruth Reichl. But with unusual cuisine and canny promotion—his “Punk Rock Karaoke Nights” spawned a nightclub act currently touring the United States—Eric created something every restaurateur strives for: a destination. On any night, maybe a third of the patrons are local. The rest journey from far outside the normal nightlife orbit to immerse themselves in Eric’s fastidiously conjured Eastside cool.

“The people here are mostly 310s and 818s,” Eric says. “They have to drive to get here, but once they do, there’s a completely different vibe.”

The same dynamic is in full force at Eric’s latest venture, Fred 62, a tractor-green diner that’s been packing them in for two years with self-consciously eclectic fare like baked meatloaf and soba noodles. With its faux ‘50s leather booths and piercings-intensive waitstaff, Fred 62 is shunned by most locals. “It’s so goddamned contrived,” seethes Jo Michelle, a thrift-shop wholesaler who supplies vintage-clothing shops in Los Feliz. “It’s for all the kids who saw Swingers and want to don some hair grease and a clipon nose ring for the afternoon.”

But while locals grouse, Eric says he is averaging about 3,000 customers a week. He won’t talk money—just about no one in the Eastside entrepreneurial class deigns to—but even at a modest $15 per head, his weekly gross at Fred 62 comes to $45,000, or roughly $2 million annually. With that kind of cash flow, Eric can afford to indulge fantasies like his two-tone ‘57 Chevy and goldflake ‘69 Buick Electra, each customized to reflect the themes of his restaurants.

And make no mistake: Not everyone is put off by the Westside interlopers—or the money—that his restaurants have drawn into the neighborhood. One morning, Eric was approached by Lily Tomlin, who lived in nearby Laughlin Park. “I want to thank you personally,” she told him, “for raising the value of my property.” (Indeed, in July, Tomlin sold her house for nearly $3 million.)

As most Eastside entrepreneurs discovered early on, coolness is a commodity. And no one understands that dictum better than Robin Harrington, who runs Dragon Talent with partner Magnum. “Corporations need coolness to sell products,” declares Harrington. “And we’ve got more of it here than anyone else.”

Harrington, a severely stylish 31-year-old who favors chunky oval eyeglasses and leather pants, did this cultural calculation five years ago while promoting underground Eastside clubs like Shaft, Glue and Minitruck. Figuring that the fashion extravagance of certain clubgoing friends was wasted on fellow clubgoers, the former Long Beach High cheerleader cleared out a room in her Los Feliz home and started working the phones.

What began as a talent agency strictly for drag queens quickly grew to include a stable of punks with piercings, photogenic fetishists and the scruffy Gen X kids too short or big-nosed to get signed by the agencies in Beverly Hills. Most of Dragon Talent’s clients come right off the street—Harrington and Magnum keep a close eye out their office window in Los Feliz, where the foot traffic on Vermont Avenue around the Dresden cocktail lounge and a vintage shop called Squaresville is intense. One morning, Harrington spotted a woman sporting “a cute pink tank top, wild hair, hip huggers—really exotic, definitely mixed ethnicity.”

“`Oh my God, that girl is so fierce,’” Magnum recalls yelling. “`Whoever’s got the lowest platforms has got to go down and grab her!’”

Harrington says she has no qualms about lending corporate giants the legitimizing cloak of Eastside cool. “Advertisers want hipness, and they’re going to get it one way or another,” she says. “The kids from around here are the ones who came up with these great styles. They deserve the money and recognition.”

And Harrington, who is rapidly ditching the thrift-store rags in her closet in favor of designer duds, sees no contradiction in living large while selling street cool to clueless corporations. “If I want to carry a Gucci bag and drive a new Volvo station wagon,” she says, “people better just get used to it.”

It can be argued that the real reason Eastsiders like Fred Eric and Dragon Talent have done so well has nothing to do with the Eastside itself. In a good economy, all boats rise—even a few steered by captains with white-boy dreadlocks. Just look at Brett Gurewitz. The former guitarist for Bad Religion established the wildly successful Silver Lake label Epitaph Records and signed such indie stalwarts as Rancid, NOFX and Agnostic Front. After another of his label’s bands, the Offspring, sold 8 million copies of their record Smash, Gurewitz inked a deal with Sony for the worldwide rights for the next album for a cool $6 million.

And for every punk tycoon like Gurewitz, there are a hundred young hopefuls drawn east to start a career and family while staying true to. fuzzy Gen X ideals of authenticity. “Houses in the Franklin Hills and north of Los Feliz are selling very, very quickly,” says Arnon Raphael, a broker for Fred Sands who has watched the value of most Eastside properties rise by 20 to 30 percent in less than five years. “You’re seeing a lot of younger couples and Industry people moving in, buying houses that belonged to people who waited years for the market to get better.” At the beginning of July, there were 14 homes in escrow in Los Feliz alone, ranging from $450,000 to $950,000, most of them with turnarounds of less than a week. One rundown Mediterranean in a leafy Los Feliz culde-sac was put on the market by a widower in his eighties—the 3,300-square-foot home was quickly snapped up for $785,000. In the Franklin Hills, a 1,500-square-foot Spanish two-bedroom sold for $479,000 within a week of being listed. Itty-bitty fixer-uppers north of Hollywood Boulevard are going for more than $500,000, while prices in the foothills easily surpass $1 million.

Helping fuel the Eastside real estate boom is the spiking celebrity quotient. Leonardo DiCaprio, Geena Davis, Beck and the Red Hot Chili Peppers all own homes in the area, and the Beastie Boys headquarter their Grand Royal Records in Atwater Village. Then there’s the residency of a certain Kabbalah-following pop star. “Madonna moving here validated everything,” says Andrew Dibben, a clothing designer who relocated to Silver Lake from London six years ago. “Before, nobody in London or Paris knew that there even was an Eastside of L.A. Now we’re on the map.”

The buzz can make an enormous difference in a fickle business like fashion. Dibben considered setting up shop on the Westside but decided to open his boutique, where he manufactures and sells his high-end “postgender” clothing, in Silver Lake. “There’s a lot of money in these hills,” Dibben says. “People just aren’t so conspicuous. The people earning over here might look like punks, but most of them are computer designers and music executives and those who can afford to buy nice things. And they don’t like going west to shop.”

Scott Mangan proved that principle five years ago with Rubbish. Starting with $2,000 and a hunch that midcentury furnishings were about to get hot, the former wardrobe assistant has since opened a second store in Pasadena and a decorating service; he did celebrity photographer Herb Ritts’s Santa Monica studio. But Mangan points out that doing business in Silver Lake also means doing without basic city services taken for granted on the Westside, forcing local moguls to literally get down and dirty. “I clean the street and trim the trees,” he says. “Running a business over here, you’re really on your own.”

Nevertheless, for successful Eastside entrepreneurs, even the appearance of self-sufficiency is coveted. That’s because when they hit pay dirt, they tend to cover their tracks. No self-respecting Eastsider would be caught dead bragging about his stock options or even his bar receipts. While this modesty may be rooted in basic decency, it also makes a twisted kind of business sense. “If something grows to the point that business is big enough, people think it belongs on the Westside,” says Reno Goodale, co-owner of the Back Door bakery, a neighborhood hangout that is prospering less than a mile away from a struggling new Starbucks. “You keep your success to yourself.”

That could explain why truly grand houses tucked away from view, like the former Chaplin estate in Laughlin Park or Madonna’s Vermont Canyon hacienda, are popular with Eastside moguls who want to stay in the neighborhood but not flaunt their fortunes. And why the busiest restaurants, like Cafe Stella, have remained wedged behind pet groomers. And why some of the richest entrepreneurs often look like Cafe Tropical owner Jeff Bey, a compact and balding Afghan-Sicilian who wouldn’t look out of place cheering his kids at a neighborhood soccer match. Bey lives in Los Feliz’s exclusive Oaks district and says he doesn’t feel tremendous allegiance with other Eastside entrepreneurs. “Remember, this is only the Eastside to white people,” he points out. “To Latinos, everything west of downtown is the Westside.”

The Eastside boom owes much to Bey, who three years ago sank $3 million into a fading East Hollywood establishment. The business was Hollywood Billiards, and the 30,000-square-foot pool hall and restaurant went on to revitalize a particularly dodgy patch of Hollywood Boulevard. The warehouse-size room is a favorite Industry party spot, hosting an Ally McBeal wrap party and events for Sony, Disney and EMI. Such glitzy goings-on would have been unthinkable when Bey decided 10 years ago to ditch his job as a corporate attorney and seek his fortune instead in a dank basement that smelled of cigar smoke and cat pee.

“It had everything wrong with it,” Bey says. “It was on the worst corner in Hollywood, in the worst condition imaginable. The cashier was in a cage, for Christ’s sake. My family thought I was nuts.” After closing due to earthquake damage and being rebuilt a few blocks east—this time complete with a trattoria and Mediterranean-style courtyard—Hollywood Billiards began attracting a finer breed of shark. Bey now owns a second pool hall in San Francisco, and he says that banks have estimated the total worth of the businesses to be as high as $7 million.

Of all the success stories on the Eastside, some of the biggest belong to the barkeeps. “People like to drink over here,” Eric points out. “And the people who count the receipts are making a killing.” Like Steve Edelson, a 37-year-old from Chicago who moved here 10 years ago after working in construction. Starting with a bar in central Hollywood, Edelson built a nightlife dynasty that now includes the Silver Lake rock dive the Garage, Home in Los Feliz, Dragonfly and Hells Gate in Hollywood, the Joint and Martini Lounge on Melrose and a just-opened Santa Monica club called Lush that “packages the Eastside environment for a mass audience,” as he puts it. Edelson won’t quote specific dollar figures but says his businesses grossed in the millions last year alone, allowing him to plop down $700,000 cash for a 12,000-square-foot English Tudor compound north of Los Feliz Boulevard that used to belong to Basil Rathbone. Edelson says he owes his success to understanding the financial peculiarities of the typical Eastside club rat. “A guy in Santa Monica with $20 in his pocket will stop at Blockbuster and Koo Koo Roo, and that’s his night,” he says. “A guy over here will stop and buy two 99-cent tacos, get heartburn and spend the rest of his money seeing a band at a bar. That’s my kind of guy.”

Edelson’s eminence notwithstanding, the nightclub that really put the Eastside on the map is Spaceland. Founder Mitchell Frank shrewdly booked early gigs by influential Eastside acts like Beck, the Geraldine Fibbers and the Negro Problem. Soon mainstream tastemakers descended, capped by a Los Angeles Times feature with a photograph of a Spaceland crowd and the much-chuckled-over headline SILVER LAKE IS ON FIRE! Frank did just fine during the ensuing feeding frenzy, establishing a record label, Nickelbag, with hot Eastside producers the Dust Brothers (Beck, David Bowie). With Disney-owned Mammoth Records in negotiations to buy the label, the 38-year-old club owner has purchased a midcentury modern in the Los Feliz hills, complete with a Jacuzzi, pool and perfect view of the Griffith Park Observatory.

Frank, somewhat disingenuously, frets that successes like his encourage bigger, blander businesses to move in. “When I started Spaceland, I was wildcatting out here,” he says. “Once you hit money, the corporations come in and co-opt everything. It’s already happening. It’s only a matter of time before the whole area gets gobbled up.” Indeed, the nightmare for self-respecting Eastsiders—at least when speaking for the record—is an invasion of TGI Fridays and California Pizza Kitchens. “Leave us alone!” cries Patti Peck, owner of the Sunset Boulevard diner Millie’s, which serves as a kind of job placement program for punk rock performers. “Right now, we’re walking a fine line between having a thriving community and getting taken over by the big boys.”

Eventually, the big boys will win. They always do, says Monah Li, a designer of punk couture who pulled in $600,000 last year at her shop on Vermont Avenue. “All of a sudden, it’s like the new Beverly Hills,” she says. The influx of capital will undoubtedly alter the neighborhood—proof is as far away as SoHo or as near as Melrose Avenue—but Li, candidly enough, says she doesn’t mind. “It’ll be a few years before it’s ruined,” she says. “That always happens. But in the meantime, there’s some good money floating around.”

And by then, most of those who made it on the Eastside will have moved on. But where? Fred Eric offers a preview. “I’ll tell you where the coolest place is,” he declares. “Eagle Rock. If you want to know the truth, that’s the coolest place in the city.”