Space to Shoot

By MARK R. MADLER Staff Reporter With 5.2 million square feet of soundstage space for film and television production, Los Angeles County has more than anywhere in the world. But it’s not enough. Entertainment industry professionals ranging from the San Fernando Valley up north to the Antelope Valley agree that soundstage space is at a premium in the Los Angeles region and the reason is twofold. One is the California tax credit program, which has kept television shows and feature films in the state. The second is that the streaming services such as Netflix Inc., Amazon.com Inc., Walt Disney Co.-owned Hulu, Apple Inc. and others are filming their original content here and renting space. “We are currently in the middle of a streaming content war and Los Angeles is ground zero,” said Hunter Davis with Real to Reel Locations in Van Nuys. “I don’t believe most property owners fully realize just how much opportunity there is right now in the short-term filming and production office markets.” Alton Butler, founder and chief executive of Line 204, a Hollywood production supply and space company, which has plans for a soundstage project in the east Valley, said it used to be that the stages at Universal Studios or Warner Bros. Entertainment would be filled on a show-by-show basis. But the streaming companies will rent space for five years because they know that if one show gets cancelled, they will have another ready to move in, Butler said. “They are afraid to lose the stage because they know someone else will come in there and take it,” he added. A 2017 study by FilmL.A., the Hollywood nonprofit that coordinates on-location filming permits for Los Angeles, unincorporated L.A. County and other jurisdictions, found that in 2016 there was a 96 percent average occupancy rate for soundstages. FilmL.A. President Paul Audley said the organization was preparing an updated report and the occupancy rate would likely be similar to what it was three years ago. “The result is we are using alternative spaces a lot outside of those dedicated stage spaces,” Audley said. “It’s temporary use of buildings like warehouses and big-box stores that are not currently open.” The region is able to accommodate film and television production although it is a tight market, he added. “The good news is with the influx of production from the tax credit and the increased production in general, we are seeing actual construction now of stage space some of which have opened, and some will open this year,” Audley said. New stage space set to open this year includes Quixote Studios new facility taking up about 85,000 square feet at a former warehouse in Sylmar. Repurposed warehouses Real to Reel serves the industry by marketing properties for filming. Chief Executive Gary Onyshko said the warehouse space the company represents has been in high demand, but there is a bit of constriction on that space because of the hot market for Valley real estate. “A lot of those warehouses are getting either repurposed or remodeled or being redeveloped into something else,” Onyshko said. Onysko started working at the company in 2001 and became owner eight years later. One of his points of pride is how the staff has been able to generate revenue for properties as a film location while it goes through the re-entitlement process to be converted into another use. The former Sunkist Growers Inc. headquarters building in Sherman Oaks is a good example. The building was used for both filming and production offices while its owner IMT Capital went through the process of securing approval to turn the property into a mixed-use project. “Sunkist is just about ready to be shut down to filming and production offices because their entitlements are finalizing and they will start remodeling and building,” Onyshko said. But losing that building is not bad for Real to Reel as its portfolio is always changing. Sunkist might go away but the company is representing the now-closed campus of St. Vincent Medical Center in central Los Angeles. The 10-acre site has looks that mimic a college campus, a business park, an office setting as well as medical space with its variety of labs, Onyshko said. “The diversity of that entire campus is just mind-boggling,” he added. Richard Reilly is co-owner of two studios – Crimson Studios Group in Chatsworth with five stages and Valencia Studios in Santa Clarita, which has six stages. The former has hosted both network and Netflix shows, while CBS has been a longtime tenant at the latter. Reilly said it is a good time to be in the entertainment business and he and his business partners hope it continues that way. “As long as those two things stay in place (streaming content and tax incentives), I think business continues to expand and grow in this area,” he added. “If one of those two things has a weakness or runs into trouble, then you’ll have a whole different deal.” Farther north Outside the San Fernando Valley, the city of Santa Clarita issued a record number of on-location film permits last year – 576 – for both film and television projects. Evan Thomason, an economic development associate with the city, said there was a total of about 750,000 square feet of soundstage space in the city. The bulk of that is at Santa Clarita Studios in the Valencia Business Park at 25135 Anza Drive. The complex has 16 soundstages ranging in size from 11,000 square feet to 40,000 square feet. Shows filmed there include “Santa Clarita Diet,” “SWAT,” “Deadwood,” “Justified” and “CSI: Crime Scene Investigation.” LA North Studios has four soundstages nearby to Santa Clarita Studios at 25045 Avenue Tibbitts. Like elsewhere in the region, stage space is at a premium and there never seems to be enough, Thomason said. “I have talked to location folks that are being hired just to find soundstage space because it is so in demand,” he added. Further north, in the Antelope Valley, Pauline East, director of the Antelope Valley Film Office, said they are open for business in Palmdale and Lancaster. “Both cities are encouraging filming,” East said. “Knock on our door and we try to deliver.” While there are notable locations around the cities, including The Four Aces movie ranch and Club Ed film set, the amount of available interior soundstage space is not known. East said she is currently compiling an inventory of the valley’s assets as far as free-standing buildings that could be used for filming. “We have space to accommodate green screen work but when you really want to have an ongoing show you need your open space, you need to be able to build whatever stages you want, and have the high ceilings for your rigging,” East said. In Palmdale, the city purchased a building in its downtown area at 34848 Sierra Highway that it is making available for filming. Luis Garibay, the city’s economic development manager, said that two projects have so far filmed there, one being the HGTV show “Extreme Makeover: Home Edition” that will air on March 15 about the building of a duplex for veterans. “The second one was a few months ago. Universal Studios filmed some scenes for the show ‘The Purge’ at that facility,” Garibay said. “They were here for a couple of days.” Attracting more film and television is a way for Palmdale to help diversify its economy, which has long relied on the aerospace and defense industries to create jobs. Making the building available to production companies is also part of the city’s effort to be more business and film friendly, giving it an additional tool to help keep filming within its borders, Garibay said. “We have met with other parties that are interested in doing large-scale production facilities,” he added. “This is probably a good way to gauge interest and then we can build off of that.” Stage construction A number of new soundstages are coming online in the greater Valley region. Last summer, for instance, Quixote Studios opened its North Valley location in Pacoima, a $25 million facility with five soundstages and 20,000 square feet of production offices for a 75,000-square-foot total footprint on 10 acres at 12137 Montague St. And in nearby Sun Valley, Butler, of Line 204., expects to break ground in the coming months on his firm’s newest $120 million soundstage project of 10 stages ranging from 7,000 square feet to 20,000 square feet on a 10-acre site. There will also be 90,000 square feet for production office space. Butler said he expects the construction to take 20 to 24 months. Despite the shortage, there are not a lot of people building soundstages because it is such a specialized industry, Butler said. Only in the last few years have other businesspeople come into the market having seen how the streaming services are starting to take hold, he added. “Netflix just changed the market even when the streaming services were not big,” Butler continued. An hour episodic TV show takes on average about two soundstages, each between 15,000 and 18,000 square feet, Butler said. And if there are 100 shows looking for homes, an area would need to provide 200 open stages to house those shows, he added. “We have a high occupancy rate right now, so how do you find a home for those guys?” he asked. One solution floated among city and county officials is an incentive program to build soundstages. Some of the areas that California competes with for film projects, such as Canada and Great Britain, now offer incentives to develop studio space, said Audley of FilmL.A. “Just like runaway production in general, when they began to offer money to take your production elsewhere, L.A. is a bit behind in that competition to produce that space,” Audley said. Kevin James, director of L.A. Mayor Eric Garcetti’s Office of Film & Television Production, said there are owners the city has heard from that are interested in repurposing their property for filming but for any number of reasons – the cost, the entitlement process – do not take the steps necessary to do the work. “When you have a consistent drumbeat of complaint regarding what it takes to upgrade your property, then maybe it is worth looking at an incentive program,” James told the Business Journal. “It doesn’t mean we will get there but it is something worth looking at.”