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By March of 1914, Carl Laemmle's Universal Film Manufacturing Company needed more land. Laemmle and his partners founded the company in the spring of 1912 in New York, merging the new venture with several already-established film production companies. The merger gave Universal the use of the Champion Film Company studio in Fort Lee, New Jersey, the film production capital of the world at the time. Already a seasoned nickelodeon owner, Laemmle recognized that producing his own films would enable him to avoid both hefty licensing fees and production regulations imposed by Thomas Edison's Motion Picture Patents Company (MPPC). Still, Fort Lee's inclement weather and Universal's ongoing legal challenges from the MPPC made New Jersey inhospitable. Laemmle, along with a handful of other film producers, fled west.
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After arriving in Los Angeles, Laemmle took control of the Nestor Film Company production facility, which delivered Hollywood’s first films. Nestor's staff churned out three pictures a week from their studio, a former tavern rented from widow Marie Blondeau. The building conveniently offered multiple rooms and spacious grounds at the corner of Hollywood and Gower, enabling several films to be shot simultaneously. When a script called for a more expansive location, Nestor’s crews shot in the San Fernando Valley on land leased from the Providencia Land and Water Development Company. However, lugging equipment and personnel on location required precious time and money. In order to increase efficiency and profits, Laemmle determined to consolidate Universal’s holdings. Laemmle decided to build the world’s first city dedicated entirely to making movies.
Laemmle purchased 230 acres of land in the valley for $165,000 and started construction. Ignoring his colleagues’ jeers, who often referred to the decision as “Laemmle’s Folly,” the burgeoning movie mogul hired hundreds of workers to realize his vision. While filming continued on the grounds, Laemmle installed sets and stages as well as a bank, post office, school and zoo. Laemmle even hired a group of Native Americans to perform in his films and live on the property in tepees. Following a year of construction, the city, with a population of almost 500 actors and stagehands, neared completion and Laemmle planned his grand opening.