Ciudad de la Luz Loses Out

Studio falls victim to Spain’s building spree, competition

MADRID — The bitter battle between Europe’s studios to lure big U.S. shoots has claimed a large scalp: Spain’s $380 million Ciudad de la Luz.

When the six-soundstage studio — nestling above the Mediterranean on Spain’s eastern seaboard — opened in 2005, it was hailed by its architect, Los Angeles Center Studios designer Gary Bastien, as the most modern studio complex in Europe.

Line producers visiting the stages purred at their wooden light grills, mute air conditioning and NC-25 soundproofing. An 86,000 sq.- ft. water tank in the backlot rivaled Malta’s pool as Europe’s top tank facility.

Eight years on, however, Ciudad is almost empty, and the government of the Valencia region — the Generalitat — is mired in legal battles with Aguamarga, Ciudad’s bankrupt management company, which claims it is owed €1.6 million ($2 million) in back payments.

This week, the European Commission gave Ciudad four months to pay back the $339 million it received in public subsidy from the Generalitat, after an investigation ruled last year that the state funding violated European Union competition rules.

Driving more nails into Ciudad’s coffin, the EC also instructed production companies to return incentives received for studio shoots and forbade further Generalitat funding.

Nobody questions the studio’s technology.

“The Ciudad de la Luz is a superb facility,” said Ghislain Barrois, CEO of Telecinco Cinema, co-producer of Juan Antonio Bayona’s “The Impossible.”

“Without the big water tank and a soundstage tank, it would have been very complicated to shoot the tsunami scenes, the waves and the ‘whirlpool’ sequence where Naomi Watts is dragged under the water.”

Bruce Willis starrer “The Cold Light of Day,” “Everybody Has a Plan,” with Viggo Mortensen, Gallic tentpole “Asterix at the Olympic Games” and Francis Ford Coppola’s “Tetro” also shot at the Valencia complex.

At least one rival, Berlin’s Studio Babelsberg, has kicked Ciudad’s tires. According to sources, execs from Babelsberg and Ciudad met over the summer to try to settle a Babelsberg purchase. But Ciudad’s asking price was beyond Babelsberg’s pocket.

It’s now difficult to see the studio’s future.

“The Ciudad de la Luz isn’t viable without state aid or a local talent base of technicians and service companies,” said Jose Antonio Suarez Lozano, a media lawyer at Madrid’s Suarez de la Dehesa Abogados.

Lacking a white knight, Ciudad de la Luz now threatens to become a white elephant, a monument to Spain’s boom-to-bust building binge, when regional politicos tapped local saving banks to finance building projects with little market demand.

The Ciudad’s demise runs deeper, however, reflecting ever-greater competition for U.S. shoots across Europe.

Since 2006, Germany, France and Italy have all created rebate schemes to attract big foreign shoots. Germany’s is capped at around $15 million.

“Ciudad de Luz could have a market,” said line producer Jose Luis Escobar. “But neither Spain’s government nor its local industry has understood the potential benefits of luring big international shoots to Spain. Nearly all Europe now operates rebates. Spain has missed the train.”

There’s one exception. In telling contrast, dangling a 38% tax credit, Spain’s Canary Islands lured Warner Bros.-Relativity Media’s “Wrath of the Titans” and Universal’s “Fast & Furious 6.” Sources believe U saved $20 million thanks to the tax credit.

Ciudad’s now-outlawed incentives, such as rebates capped at $4.6 million, remain small fry in comparison.

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