Studios unlikely to build any more large-scale facilities

While New York is busily grasping Hollywood production dollars, California is doing everything it can to let them go.

In recent weeks, Universal has been puzzling over what to do with its undeveloped 400-acre back lot. Options include residential or retail buildings.

But many in Hollywood are crying out for soundstages. Universal is the last of its breed, a studio with the sort of huge back lot that was standard before studios started selling off land for real-estate development.

Now that the studios have sold off most of their back lots, Hollywood is facing a production real estate crunch, particularly of mega-stages capable of housing tentpole pics with enormous sets.

Many studio stages need significant upgrades, and in recent years, as tax incentives have lured feature production to other states and countries, TV production has dominated the facilities. California won’t see incentives any time soon, what with Arnold Schwarzenegger’s influence over the state Legislature in question and a brutal re-election campaign looming.

Cinematographer Allen Daviau, who’s received five Oscar noms for films such as “E.T.” and “Avalon,” says local productions “are always battling over the big stages because there are only so many available, particularly now that there’s so much TV on the lot.”

Only a handful of studio soundstages, such as Universal’s Stage 12, are in the 30,000 square-foot range often needed for big-budget projects.

U’s 30 soundstages operate at more than 90% capacity, including a half-dozen that are used for “Desperate Housewives.”

And many big-budgeted tentpole pics, searching for bigger and taller soundstages, are going to distant areas of Southern California — or, with the lure of tax incentives, to facilities overseas, such as Fox Studios in Australia or Pinewood Shepperton in the U.K.

The overseas facilities carry the additional attractions of far cheaper labor costs plus the growing expertise in craft jobs like building massive sets and turning out custom-made swords.

Thomas Walsh, a “Housewives” set designer and prez of the Art Directors Guild, says of U, “The studio’s at full capacity and everything is booked solid, so what saddens me is that this might get dismembered. It’s too bad because this lot’s really the last remnant of what studios were like with the sections for New York and old Europe and the lakes.”

Producers needing a mega-sized soundstage with high ceilings are often forced to choose between foreign facilities or former aerospace plants such as Palmdale’s Rockwell plant, home to “The Terminal”; the Spruce Goose hangar in Playa del Rey, where “Transformers” is in pre-production; or Downey Studios, which has attracted such productions as “Christmas With the Kranks,” “Lemony Snicket,” “The Island,” “Zodiac” and “Santa Clause 3.”

Downey’s Building One — on a site where the Apollo spacecraft and the space shuttle were built — occupies 250,000 square feet, about eight times the size of Universal’s largest sound stage. Business is largely limited to features, admits VP of operations Kevin Murphy. “This is not the kind of place you need for a three-camera sitcom.”

On the Downey grounds, Revolution left behind a suburban street with 16 houses from “Kranks,” while Paramount built a 6 million-gallon lake for “Snicket” that’s still in use.

Still, Downey Studios is hardly ideal. “It’s a tough drive, plus you’re adapting space that wasn’t originally designed to be used as a soundstage. You don’t have power and you don’t have support like props, painters and the commissary, so you’re bringing everything in,” notes d.p. Daryn Okada.

Okada, whose credits include “Mean Girls,” would welcome new soundstages in Hollywood, noting that many of the current facilities are outmoded and require significant preparation to be usable. He’s a fan of the Los Angeles Center Studios, which operates at the former Unocal headquarters and features half a dozen new soundstages.

“We wound up three days ahead of schedule on ‘Just Like Heaven,'” he notes. “It was very efficient because everything you needed was there and everyone got into a rhythm.”

Daviau shot half of “Van Helsing” at the Spruce Goose hangar, half in Prague and one scene in the Downey Studios parking lot.

“The Spruce Goose building was incredible to use because it’s so high. On any really big film, ‘where’s the grid’ is always the question for people like me.”

Michael Moore, who presides over Raleigh Studios operations in Hollywood and Manhattan Beach, doubts Universal will build any more soundstages.

“The soundstage business is a very cyclical business that changes every three or four years,” Moore says. “And with the very competitive state of the industry, particularly with tax incentives, California is less and less competitive, particularly on the feature side. There are now tax incentives in 20 states, so it’s hard to compete with that.”

During the 1960s and ’70s, U was one of the few studios to keep its back lot largely intact, as other majors like 20th Century Fox and MGM sold vast tracts of land to developers. It is unclear whether U will look to carve up some of its existing back lot, where its faux suburban streets, Mexican villages and western towns are part of its studio tour.

With escalating housing prices, residential real estate could prove much more lucrative for U than holding onto the land for production.

U announced March 22 that it was hiring developer Thomas Properties Group and architect Rios Clementi Hale Studios to create a master plan over the next four to six months that will outline what the studio plans to do with its property.

The vacant land on the lot makes up some of Los Angeles’ choicest undeveloped real estate, and it may be hard for GE to resist the siren call of profits from putting up pricey homes.

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