While the proposed stage complex at the Brooklyn Navy Yard is far from a done deal, a number of major players-including Miramax Films, New York, and actor Robert DeNiro’s Tribeca Productions, New York-have jumped on board the project in recent months.
Last week (5/3), a group of companies involved in the development held a press conference at the Navy Yard in conjunction with city officials. The contingent included representatives of Miramax, Tribeca, real estate investment company Vornado Realty Trust, Saddle Brook, N.J. and New York Studios which has commissioned architectural plans for the stage facility and continues to use the Navy Yard as a site for commercial and music video production. Vornado, Miramax and Tribeca Productions are seeking to develop the project that was initially conceived by New York Studios. At the Navy Yard event, Mayor Rudolph Giuliani joined Miramax’s co-chairman Harvey Weinstein, Tribeca Productions’ partners DeNiro and Jane Rosenthal, Vornado chairman Steven Roth, and New York Studios’ president Cary Hart and CEO Louis Madigan.
"This facility will allow producers to shoot an entire movie, from start to finish, right here in New York," said Mayor Giuliani. "It will not only encourage new film production in the city, but will also help revitalize an area that has been long under-used."
While the specifics of the deal will not be definite until a final agreement is cemented, the proposed studio as outlined would consist of 12 soundstages on a 15-acre lot. The project would cost in the range of $140 million to $150 million according to Randy Levine, the city’s Deputy Mayor for economic development. New York-based Plaza Construction has guaranteed the project construction at $150 million, meaning that the company will cover any cost over that price. The group led by Vornado, Miramax, and Tribeca Productions is ready to commit $35 million in cash to the project, and the city has agreed in addition to provide a $25 million low-interest loan to the project developers. The Brooklyn Navy Yard Development Corporation would provide $8 million. And Keyspan Energy, an electricity provider, would invest $12 million to $15 million in the development and build the grid necessary for the project. Additionally the city will grant the studio facility a 40-year lease at minimal cost during its early years. Over the 40-year term, the eventual lease payments will amount to $5 million.
Deputy Mayor Levine stated that with Miramax and Tribeca Productions committed to making films at the location, the Navy Yard facility becomes a viable economic project. "What really makes this work is that you have very credible people, you have a sound construction company," he said. "You have people that are in the movie business that are committed to making movies there."
As expenditures on film, television, and commercial production in New York have continually increased, soundstage advocates have contended that New York could easily support an extensive soundstage facility. Combined expenditures in ’98 were $2.57 billion after the prior year’s high of $2.37 billion. Proponents of the Navy Yard proposal also cite the jobs that would be created by the project, both in the construction phase and once the studio is built.
With initial financing falling into place, the hold-up in proceeding seems to be in resolving the relationships between the various entities currently involved with the negotiations. A letter of intent outlining the terms of the studio development was supposed to be presented at the Navy Yard press conference but that didn’t come to pass. Negotiations were continuing at press time. Reportedly, the delay centered around New York Studios, which holds development rights to the space at the Navy Yard. Mark Coelho, who began New York Studios with partner Hart, would not confirm that the company has a pivotal role in resolving the legal obstacles to the studios. He said that the company wanted to recoup the investment it had made in the project thus far. Among other expenditures, New York Studios has commissioned architectural firms to draw up plans for the studio and hired accounting firms to analyze the economics of a soundstage complex at the Navy Yard location.
The concept of the Navy Yard studio began with Coelho, who initially used the space for a car commercial directed by Bob Giraldi of bicoastal Giraldi Suarez Productions in the summer of ’96. It was after that shoot that Coelho realized the viability of a studio because of the immense space available at the Navy Yard and its proximity to New York. Coelho has continued to use the space for lensing of spots and music clips. Coelho said that if the negotiations are successfully concluded, the studio would take 18 months to build from the moment of groundbreaking.
Once the letter of intent is signed, the companies involved with the deal will be presenting the specifics to Union Labor Life Insurance Company, a business that has underwritten other construction projects in New York. Union Labor, which was earlier linked to Hudson River Studios, a smaller studio development project, is currently evaluating the Navy Yard proposal. While The New York Observer reported that Union Labor’s investment would be an unequivocal $80 million, sources say that the company’s involvement would actually be more in the range of $50 to $80 million. Union Labor’s Michael Steed, the company’s senior VP for investments, said that the company was examining the Navy Yard deal and would make a determination once the letter of intent is signed by the development entities.
"Soundstages properly run can be a profitable business, and there appears to be an increasing demand for soundstages in New York." said Steed. "We’ve looked in general at the economics of soundstages, and the economics look promising." Steed explained that the financing for the project would come from a fund that is designed to invest in projects built with all-union labor forces.
Andrew Stengel, Miramax’s director of corporate communications, wasn’t at liberty to discuss specifics of Miramax’s involvement with the Navy Yard project. He said that part of the reason behind the Navy Yard initiative, as Miramax’s Harvey Weinstein iterated at the press conference, was to establish a beachhead in the Brooklyn borough, a community that many of the players behind the planned stage complex came from.
