With soundstage space in New York at a premium, and with the local film industry holding steady after years of growth, last year’s announcements of several proposed soundstages in both New York and New Jersey were met with a good deal of enthusiasm-as well as some sober skepticism.
As reported in SHOOT’s New York Production issue last summer (SHOOT, 6/5/98, p. 55), these soundstage projects, including New York Studios in the Brooklyn Navy Yard, the Hudson River Studios on Manhattan’s west side and Silk City Studios in Paterson, N.J., have been hyped as the second coming in the local film, TV and spot production world.
The most ambitious project has been The Shooting Gallery’s plan for the 30-acre Supor Industrial Park, in Harrison, N.J., which was announced with great fanfare in The New York Times last January. The proposed site has included, at different times, a compound of 15 soundstages, a gym, day-care facilities and a hotel-like concierge service, among other attractions.
So where do the grand plans stand today?
"Forget it," says Joe Friedman, executive director of the New Jersey Motion Picture and Television Commission, who once had high hopes for the center. "It’s been going on for a year now, and unfortunately their grandiose plans have not materialized." Nor, he says, have soundstage plans been realized by Edison Properties, which had been eyeing another location in Harrison, also owned by Supor.
The problem with the New York-based production house’s project, Friedman adds, is simple: "It’s a matter of money. It’s so expensive to even get up and running. … There were good ideas, some money was spent [by The Shooting Gallery], architects and designers, that kind of thing, and the state agreed that it would help any way it could-up to a point-such as providing help in terms of transportation, labor and other things the Department of Commerce offers when any company is considering moving or relocating into New Jersey. … But the problem is, it’s one of those things that you can’t guarantee a steady stream of business. It’s touch and go in the film business." This, he adds, despite the fact that everybody knows "there is a huge, critical shortage of space in the metropolitan area."
The Shooting Gallery is still looking for soundstage space, with a scaled-back version of the Harrison facility not yet ruled out, according to Craig Bankey, VP of publicity for The Shooting Gallery and its Gun For Hire Films division. "We’ve opened the search for stages in both New York and New Jersey," he explains, and are hoping to settle on 250,000 square feet for 10-12 stages.
If the soundstages do indeed get built in New York, The Shooting Gallery will once again be assisted by the New York City Investment Fund, established in 1996 by financier Henry Kravis to help spur business growth. The Fund has already invested $2.5 million into the company, financing half of a $5 million renovation of Gun For Hire Films’ production services facility on Leroy Street and its soon-to-open facility on Greenwich Street, both in downtown Manhattan. (The Leroy Street location also houses East Coast Post and Clear Music, and is primarily used by feature film productions.)
According to Kathryn Wylde, president/CEO of the New York City Investment Fund, Gun For Hire Films’ facility "was needed in the city." She adds that the busy Leroy Street operation has shown that Gun For Hire has "a track record as a line production service. They’ve shown that the business model worked in terms of there clearly being folks who will come in and pay for office space and line production services under one roof."
As for the soundstage search, Wylde adds, "We’re involved in it and are trying to ensure that they’re on this side of the Hudson River. It’s not easy to find space, but we’re exploring with them as many possibilities as we can."
Last Exit To Brooklyn
The other high-profile project, also announced with bold headlines in The Times, is New York Studios, which is planned for the Brooklyn Navy Yard and geared toward feature films, episodic TV and spotwork. With its cavernous buildings, vast parking space and East River locale, directly across from downtown Manhattan, the Navy Yard is a prize chunk of real estate. Cary Dean Hart, president/co-founding partner, and Louis Madigan, CEO/co-founding partner, envision a 15-acre "production factory" featuring a 48,000-square-foot soundstage, 10 additional stages and support services. Hart and Madigan signed a 70-year lease with the Navy Yard contingent on their raising $190 million (since scaled back to $140 million) in development costs by the end of 1998 (SHOOT, 7/3/98, p. 1), a deadline they said was recently extended six months. Hart, who owns stage set-design firm Delphi Studios, and Madigan, owner of Progressive Internet Alternatives, both of which are housed at the Navy Yard, put together a development team that includes J.P. Morgan & Co., Harbison-Company-Financial Advisors, LaSalle Partners Development, HLW International and J.A. Jones-GMO. The team has yet to announce raising of any capital.
Hart and Madigan are organized, tenacious, passionate-but they are reluctant to supply information substantiating claims that they plan to break ground in 1999. Perhaps the most ominous sign that they are treading water is the extension of the December deadline, as well as the fact that numerous calls from SHOOT to both Mayor Rudolph Giuliani’s office and the Brooklyn Navy Yard Development Corporation-which is working with the city to spur the site’s growth-were not returned. A series of announcements have been promised for the beginning of ’99, including one from a company that will manage the facility, rumored to be Sony Pictures Entertainment. Hart says the as-yet-unnamed managing company has, in fact, been signed.
Mike Harbison, CFO of the New York Studios and president of Sarasota, N.Y.-based Harbison Company-corporate advisors on strategy and finance for the studio project-claims that the deal is "99.9 percent done. The city, the Brooklyn Navy Yard in particular, has been unbelievably helpful." The plans, he adds, "are conservative, and investors believe in our numbers."
While it’s been reported that New York Studios believes its ancillary production support services can help the facility turn a profit, Hal G. Rosenbluth, president of Kaufman Astoria Studios, Astoria, Queens, cautions that, while he believes in ancillaries, "There’s a cost to them. … For example, you have to pay for the technology, the personnel. They all have their own cost base. So you need to look at these things from a worst-case scenario, which is: No one’s using the stage, and I have to pay these services, plus overhead for the stage itself."
Silk City Studios was announced last spring by co-developers Tanya Ryno, a TV producer, and Bice Grobstein, CFO of MB&L Real Estate, Paterson, N.J. Ryno says the original plan, for a 30,000-square-foot stage to be built in a Paterson warehouse, is on hold.
The project, she says "is kind of waiting on me. I’m in the middle of a few things, but MB&L wants to work on it as soon as possible."
According to Ryno, "We had gone ahead and had prints drawn up and had an architect and studio designer come into the building in Paterson, but people approached us [with other ideas], so we’re still looking into things." The sites they’re researching, she adds, are all within 30 minutes of Manhattan, and are also owned by MB&L.
Ryno says Silk City will focus on spots and music videos and that the stage will be designed so it can be divided up to accommodate smaller productions. The Silk City business proposal calls for an initial cash investment of $3 million. The project, says Ryno, "is looking for some backing."
The project that appears most likely to happen is the Hudson River Studios, a reported $120 million, 315,000-square-foot, five-soundstage space to be constructed atop the St. John’s Terminal in downtown Manhattan. Phone calls to Hudson River’s public relations firm were not returned, but it has been reported that the facility will be primarily an episodic television studio and has a crucial commitment from Procter & Gamble, which apparently will utilize three of the five studios for several of its long-running soap operas.
Gotham Backlots?
The question remains whether or not production in the city can support a full-blown soundstage facility akin to a Hollywood backlot. While a final 1998 tally of production dollars generated in New York is not yet available, Julianne Cho, director of publicity for the Mayor’s Office of Film, Theatre and Broadcasting, projects that the numbers are on par with last year’s total of $2.37 billion.
Meanwhile, armories in the city, Westchester County and New Jersey have been utilized but are only an "interim solution," according to Pat Swinney Kaufman, deputy commissioner and director of the New York State Governor’s Office for Motion Picture and Television Development. "We’re scrambling all over the place to find suitable space for productions," she adds. "There’s a constant stream of phone calls asking for raw studio space, and I don’t see that slowing down."
Both Silvercup Studios, Long Island City, N.Y., and Kaufman Astoria Studios are usually filled to capacity. Kaufman is booked mostly with episodic TV and Silvercup with commercials; both host an additional mix of feature films and music videos. The heads of both facilities, however, have mixed feelings about the projected plans for new stages.
Alan Suna, CEO of Silvercup Studios, which has 13 stages, believes there is a need for more, noting that while commercials are not, by and large, being turned away, feature films are. But he cautions that some of the facilities being planned are overkill. The by-now-familiar adage "if you build it, they will come," he notes, "is just not true." The area could use only "another half dozen or so 15,000, 16,000-foot, 30-feet plus or minus high stages for film production."
Rosenbluth, whose Kaufman Astoria Studios has six soundstages, agrees that more space is needed. And, he adds, he’s "thrilled how people feel the marketplace is so strong that they feel they can justify the development they’re talking about. My question is: Is that decision on how much additional space [is needed] being done on a business-justifiable basis? The financial models for these stages to function on is extremely tight and difficult."
Commercial production has a variety of smaller facilities to choose from in addition to Silvercup, including the iconoclastic Cinema World Studios in the Greenpoint neighborhood of Brooklyn. The facility opened in 1990, and 80% of its bookings are commercials. It features, among other amenities, a rain forest dining area, a prehistoric conference room and an underwater shooting tank.
Maurice Keshner, president/CEO of Cinema World, says, "There is not enough studio space [in New York], and unless we develop the studio space, we are going to lose productions, either to California or Toronto or Vancouver." He adds that Cinema World is actively looking to expand, possibly outside of Manhattan, and that it was at one point involved with the Edison Properties, which was considering a site in Harrison. "The problem is to find the right height and no columns," he says.
"There’s a need for facilities," says David Merritt, national industry director of media for KPMG, an accounting and consulting firm based in Century City, Calif. "But in and of itself you have to create a compelling business plan." The TV and film industry, he adds, may be experiencing double-digit growth worldwide, but its success is an anomaly: "It’s one of the most attractive growth lines in just about any industry you can think of," he says, "which means the demand for facilities will continue to grow. [But the economics of the industry] are not nearly as good because costs have grown with, and often exceeded, the revenue growth."
The soundstage business, he adds, "is a grind business … not the type of business where you can hit a home run. … You have to get a facility, build it on a cost-efficient basis, keep it booked and do all these things well. And then what you want is an adequate return-not the kind of thing that attracts significant risk capital. … I’m not suggesting it can’t be done or isn’t worthy of trying to do, but it’s not the same thing as building a 1,000-room luxury hotel in Maui, where you have strong demand and good prospects of making good money."
But if New York maintains its current "safe" image, its production-friendly atmosphere and avoids the union problems that occurred early in the decade, companies should remain bullish on filming in the Big Apple-and perhaps spurring on the dream of L.A.-style soundstages.
"We’re very much an industry dependent upon the image of New York," adds Rosenbluth. "As long as New York remains a great place to live and capture on film, we’re going to get our fair share of business. As long as unions remain as flexible and businesslike, as long as services remain financially stable, we will continue to grow."7
