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Wednesday, Dec 7, 2022
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SPECIAL REPORT: Soundstage Scarcity

Filming is up in Hollywood, and the space needed to create films – soundstages – is getting harder to find, presenting opportunities for entrepreneurs to lure productions to new spaces in the San Fernando Valley and Ventura County. Thanks to California’s recently expanded film tax credit, and increasing demand for TV comedies, dramas and web-based content, filmmakers can’t find enough soundstages in the traditional centers of Hollywood and Burbank, industry experts say. One developer hoping to capture some Tinseltown gold is Hollywood veteran Steve Needleman, a former TV producer who owns the Orpheum Theatre in Los Angeles. He recently bought the Seventh-day Adventist Church’s former production facility in Simi Valley and plans to reopen its 120,000 square feet of soundstages, audio recording and editing studios and production offices to commercial productions. Its prior use had been limited mostly to the church’s programs. “In the Hollywood production studios downtown, it’s jammed,” Needleman said. “For film production a few years ago, no one wanted to think about driving out to the valleys (Simi and San Fernando). But it comes down to what is available economically and what the valleys are able to provide. I think the valleys are going to become much more important to the production industry in years to come.” Others seem to agree. Larry Levinson Productions Inc., based in Los Angles, has been approved for a rezoning that would allow its plan to go forward to build a 200,000-square-foot movie studio on a vacant lot near its Simi Valley facility, where it films movies for Crown Media’s Hallmark Channel. Also, a startup has launched in Simi Valley to market Ventura County to Hollywood, and Hollywood-based studio Line 204 has secured L.A. city approval to build a 110,000-square-foot studio and a 108,000-square-foot warehouse in Sun Valley in eastern San Fernando Valley. Ventura County calling Ventura County has long served the film industry with locations – “Gunsmoke,” “Bonanza,” “Mash,” “Poltergeist,” and “Erin Brockovich” are just some of the projects filmed there. The industry’s total economic impact in the county last year from film permits and hotel rooms totaled $39.3 million, a nearly 8 percent increase from the prior year. About $31 million, strictly from film permits, is up more than 3 percent from 2014. And the numbers are conservative, according to the Ventura County Film Commission. Simi Valley has had particular success in attracting productions. In 2015, its $5.2 million in total economic impact from filming was up 41 percent from the prior year and far outpaces other county cities. The unincorporated areas still account for most of the county’s film permit revenue, but that might be because shooting inside cities require permits and lengthy procedures. When Needleman’s studio in Simi, named Anjac Studios West, opens it will offer soundstages and production space to film crews already shooting in the county, so crews don’t have to return to Los Angeles, industry experts say. That may attract more location scouts and therefore more projects to Simi Valley and the county overall, they add. Bill Bartels, Ventura County Film Commission’s liaison between the county and the industry, agrees. His position was created to help boost filmmaking in the county, and he said the county’s strength has always been as a source of location shoots. But that may broaden with the new stages, he added. “To have an additional soundstage or studio allows productions to be based there – it allows that piece not done out in the open to be done close by,” Bartels said. “It creates synergy between location shots and stage shots. It’s all about feeding into the whole ecology of production.” Studios enable production companies to control their costs in a substantial way, Bartels added, because location filming is expensive. Shooting outdoors in Ventura County requires film companies to pay for temporary film permits, but shots in the studio don’t require them. Also, a large number of film industry support people live in the county, making production convenient for them, Bartels explained. Sven Shelgren, a producer, and Jeff Morris, a location manager, launched Scout Ventura about a year ago to bring more filming to Ventura County. They are working with Needleman and Anjac to book production at the facility. At Anjac, crews can do indoor shoots for feature films and TV dramas. It also has enough space for live TV shows with audiences. Shelgren believes the facility could serve both large and small projects, he added. “You could do larger-scale union and studio jobs there that want to be based in a cost-effective area, and also the leaner productions that need a lot of facility (space), and a good arrangement that will help them maximize their budgets,” Shelgren said. Needleman bought Anjac in May for $11.5 million and is marketing it to Hollywood as a less-expensive alternative. There’s plenty of parking, for example. While he hasn’t worked out the lease rates yet, the facility can fit 338 vehicles and that will be less expensive than the $2,500 to $5,000 it can cost a day downtown to pay for parking of crew and equipment trucks costs, Needleman said. “There’s no question there’s a push to bring more production out to the San Fernando Valley and that’s due to the costs it saves by going out there,” he said. Affordability is a huge component to keeping the industry – and the jobs it creates – in the L.A. area, rather than letting it to go elsewhere, Needleman added. Tax impact Sleek and modern like a Class A research and development site, the production facility houses two soundstages totaling 8,500 square feet, two audio recording studios, editing suites, set-building areas and production offices. Once the site hit the market in 2014 – even at the initial price of about $15 million – it attracted lots of entertainment professionals from the Tri-Cities and even those out of the state, said listing broker Stacy Vierheilig-Fraser, senior managing director with Charles Dunn Co. Inc., in Sherman Oaks. She showed it at least 40 times. Interest in the facility came from a broad set of potential buyers, Vierheilig-Fraser said, with ideas for its use ranging from audio recording schools to an animation house to production space. “It’s a unique product because of the soundstages – you don’t have a lot of soundstages with a lot of height – and the systems in there are really nice and at a reasonable price,” said Vierheilig-Fraser, who specializes in properties for the entertainment industry. “You pick that up and sell it over here (in Sherman Oaks) and the price would have been double to triple (what it was.)” Ron Feder, a broker with Keller Williams Calabasas Real Estate, who suggested the facility to Needleman as a potential acquisition, also showed the facility to Walt Disney Co., he said, and a startup media company that had contracts to create live audience and scripted shows and pre-production work for Dish Network. But the deal fell through when investors got cold feet, Feder said. The key feature attracting producers to the center is that it’s ready to go, he said, because the alternative – converting other spaces into what Anjac offers – would be too costly. “We’ve looked at facilities for one entertainer in the Warner Center (in Woodland Hills) – the cost to soundproof and climate control runs into several millions,” Feder said. “Having no need to raise capital and just lease and then go produce is a big attraction.” While there is a cluster of entertainment producers in the west Valley, Westlake Village and eastern Ventura County, Simi Valley hasn’t been in their target market, he added, so the center will likely appeal more to Hollywood productions. That’s because facilities in both Van Nuys and Valencia are booked solid, Feder added. He’s already talked to Needleman about adding a roughly 25,000-square-foot soundstage if there is demand. California’s expanded film tax credit incentive program, which went into effect last year, helped boost interest in Anjac, Vierheilig-Fraser said. Under the program’s newest version, which runs through 2021, the state has allotted annual tax credits for $330 million for in-state productions. The state also has expanded the categories of content now eligible for the credits – independent projects, big-budget feature films, TV pilots and one-hour TV series – some of which are created for new web-based TV providers such as Netflix and Amazon.com Inc. Web-based TV, comedies and dramas for TV account for much of the recent boost in filming activity in Los Angeles County. For Ventura County, the key change in the state film tax credit program is an extra 5 percent credit producers can receive for projects shot outside of the 30-mile zone centered in Los Angeles. While Simi Valley is within the 30-mile zone – meaning it doesn’t qualify for the 5 percent bonus – other parts of Ventura County are not, so location shooting in those areas of the county suddenly becomes more financially attractive. And that has increased the perceived value of Anjac, which is inside the zone but can be a base for scenes shot outside the zone but still nearby. “That 30-mile element – that was definitely something necessary for me to point out to people, and I did on a regular basis,” Vierheilig-Fraser said. “It helped to interest people.” Shelgren and Morris say the timing is right for Ventura County – and Anjac – to become a key site for the film industry because of the expanded tax credits and demand for new content. They are addressing that by building a library of photos and video of prime Ventura County spots for their website to help location scouts, and Shelgren is getting more familiar with permitting and which city staffers to work with on film shoots to avoid unexpected shutdowns or confusion. Morris thinks Scout Ventura could work well for Anjac because of the recent success he’s seen managing Big Sky Movie Ranch in Simi Valley. The 10,000-acre site has hosted the filming of scenes from TV series “Westworld,” movies “The Revenant” and “Hail, Caesar!” Last year it had revenue of about $600,000, he said. Reshoots for the movie “Django Unchained” were also done in the county, Morris said. “There have been people filming at Big Sky who were looking for a studio,” he said, pointing to a demand for a facility such as Anjac. “It’s going to fill a void we haven’t had here that’s been looked at before, and now that we have one I think it’s going to change a lot.” Shifting perceptions As Ventura County’s cities got denser in the 1990s, they started requiring film crews to secure temporary permits and for several departments to get involved. Costs increased accordingly. A 1999 Los Angeles Times story described far steeper costs to shoot in areas of the county than in L.A. County and a more complicated process. Bruce Stenslie, chief executive of the county’s economic development collaborative and the film commission, said cities came to be viewed by the entertainment industry as not film friendly. “It’s a perception within Ventura County historically, but it’s recent enough to be relevant,” Stenslie said. The Great Recession, however, changed the county’s view of filmmaking’s economic impact, he said, and it values the industry more now. The commission has focused on reversing perceptions – although it’s a slow process, Stenslie added. The commission is asking cities to consider a model permit that the state and film industry trade groups have drafted, he said, but it’s not a priority for them to adopt it anytime soon. “(These efforts) just make sense especially given the California Film and Tax Credit acceleration,” he added. “Increasing tax credits outside the 30-mile zone is an advantage for Ventura County.” Ventura County still has adjustments to make to be on par with L.A. County. Ventura charges a business license fee and a per location fee that make it a little more expensive to film there than in most places in L.A. County, said Paul Audley, president of FilmL.A. Inc. in Hollywood, which helps process permits in the city of Los Angeles and unincorporated L.A. County. Audley confirmed local soundstages are continually booked because of the renewed interest in local filming due to the expanded tax credit program. “This proves that the speculation by these developers was correct, in that we’re seeing a return of this type of high-value production,” Audley said. Although he hasn’t heard anyone talk about Simi Valley yet, with the market for soundstages as tight as it is, Simi Valley seems closer than it used to for filmmakers. “I don’t think they would blink twice to go to Simi Valley to do their work,” Audley said.

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