Hollywood Central.

NEW DOWNTOWN SOUND STAGES GETTING PLENTY OF BUSINESS

HOLLYWOOD is embracing downtown - and not just for on-location filming of skyscrapers and old-fashioned streetscapes.

Since the Los Angeles Center Studios opened for business in early August at the former Unocal headquarters, all six sound stages have been fully booked, according to its owners.

In addition, a steady stream of television, movie and commercial productions have been shooting at the vintage 1950s headquarters building next to the stages.

"It feels just like Hollywood," said Mayor Richard Riordan, who took a tour of the studios at Fifth and Bixel streets last week.

Downtown may seem an unlikely locale for sound stages, but it makes economic sense given the fact that 14,000 shoot days were logged there last year alone. "We're trying to leverage off the production going on downtown," said Stephan Smith, a partner in the project. "This (can be) their base of operations."

In fact, business has been so good that officials with Smith, Hricik & Munselle, which owns the studios, plan to break ground in mid-2000 on six more sound stages on the south side of the existing studios. When completed, the project will be the largest single independent studio location in Los Angeles, with more than 800,000 square feet of space.

Despite the strong start, the downtown studios remain a work in progress. Unlike Raleigh Studios Manhattan Beach, which signed two David E. Kelley shows to five-year contracts, L.A. Center Studios has yet to land along-term anchor tenant.

So far, most of the movie, television and commercial productions have leased space only for several days or weeks. And producers generally have used the downtown facility for shooting individual scenes or for "blue screen" work.

The lack of lengthy contracts appears to be a matter of timing. By the time the downtown studios opened last summer, the new fall television shows had already secured their production space, Smith said.

Eventually, developers want to engage a combination of short-term and long-term tenants that include television as well as movie shoots. "When we get all 12 (stages) up, we will have more variety to accommodate different types of shows," Smith said.

Already, there are a few longer-term tenants. Production is underway on the film "Numbers," starring John Travolta, and "Charlie's Angels" is using the studios as its base of operations.

"There was no space on the Sony lot," said Tracey Kettler, production coordinator for "Charlie's Angels," a Columbia Pictures feature. "We looked all over. The deciding factors were accessibility, the office space available and sizes of the stages."

The movie, which stars and is co-produced by Drew Barrymore, has taken office space in the former Unocal headquarters building and will use as many as three sound stages for several months.

Other films shot at least in part at the studios include "Mission Impossible II," starring Tom Cruise, "The Last Producer," "The Nutty Professor II," "Bounce," starring Ben Affleck and Gwyneth Paltrow, "Bless the Child," starring Kim Basinger, and "13 Days," with Kevin Costuer.

"Some of the (productions) have been here because the (major studio) lots were full. Some producers look at it as an economic savings," said Brian Brosnan, a partner in the project. "They can shoot on the sets here and go across the freeway for potential locations."

While some of the productions have only used the sound stages, others are taking advantage of interiors and exteriors of the Unocal building for location shoots, even before the sound stages opened. (There have been 200 shoots at the property since Unocal left in 1996.)

The owners of L.A. Center Studios scrapped their original plan to demolish the building when they realized how popular it has become for location shooting. Several floors have standing sets, including one that can be used as a police station or insurance office.

"It has a retro look and feel, and they seem to like that. But also in certain areas, it has such a generic look, they can make it look like anything," Smith said.

Last week, the final touches were being put on wood paneling inside the lobby, while jacaranda trees outside were festooned with fake fall foliage to evoke an image of autumn for the "Nutty Professor" sequel. Meanwhile, the stages next door buzzed with the sounds of workers using power tools and hammers while redoing sets.

The financial district sits just across the Harbor (110) Freeway, functioning almost as a back lot of urban street scenes. "Bounce" shot footage both at the L.A. Center Studios and on location downtown.

"While you don't think of it as an entertainment mecca, an awful lot of stuff is filmed downtown," said Paul Stockwell, a broker at Julien J. Studley who often represents the entertainment industry. "It may never be a headquarters for a film company, but the location reps are comfortable downtown."

The studio owners not only hope to maintain a steady stream of productions, they are working to lease space in the 400,000-square-foot office building to a variety of entertainment-oriented tenants. So far, Zoom Cartoons, an animation company, has set up shop there.

"Our goal is to have a fully functioning campus environment like any studio in town," said Vincent Vanni, director of marketing for the studios.

The former Unocal auditorium has been refurbished as a 400-seat screening room with digital sound. And the employee cafeteria is also being transformed into a commissary for use by film crews and, eventually, the public. "We try to keep people here, rather than going back to the studio," Smith said.

The owners still need to obtain construction permits before breaking ground on the next six sound stages. But the site is ready and financing is not a problem, because it's an all-equity project, Smith said.

There are also plans for a third phase, which could consist of two more stages and more office space. "We'll deal with that when we know our needs," Smith said.

While declining to reveal the cost of the studios, officials pointed out that sound stages are about three times as expensive to build as typical industrial buildings, which cost about $25 to $40 per square foot.

At 18,000 square feet, the individual stages at L.A. Center Studios are larger than most of the ones found in Hollywood. Besides location work, all the downtown stages will be equipped to handle shows with live audiences.

Plenty of Demand for Sound Stages Despite New Facilities

ELIZABETH HAYES 

Demand remains strong for sound stages throughout Los Angeles, even though nearly two dozen stages have opened in the past 18 months and some television movie production has fled to Canada.

"Television has been a long-term trend up. That's driving the utilization (of sound stages)," said Bennett McClellan, a director with the PriceWaterhouseCoopers media group.

A survey of 289 sound stages by PriceWaterhouse last summer found occupancy running at 95 percent. McClellan doesn't believe those percentages have changed significantly in recent months, especially with the TV season in full swing. Feature film production has also been fairly consistent, he said.

The more far-flung facilities outside the entertainment hubs of Burbank, Hollywood and Culver City are good indicators. The new downtown L.A. Center Studios, along with Raleigh Studios Manhattan Beach and facilities in Valencia, are pretty much booked.

"If they're busy, I would almost bet that everyone else is too," McClellan said. "You've got the Warner Bros., Sony and Paramount lots filled, which is why they go someplace else."

Michael M. Moore, president of Raleigh Film and Television Studios Inc., said the company's operations in Manhattan Beach and Hollywood have stayed busy despite competition from new stages coming online and more out-of-state production.

"There's been an increase in supply and a decrease in demand," he said. "Fortunately, the TV segment has picked up this year... It's a cyclical business. It's busier now than six months ago."

But the growing number of local stages is taking a toll. "People are giving better deals. Everyone's been more aggressive (on rates)," Moore said.

Even with higher demand, relatively few new stages are under construction or breaking ground soon. Several are on the drawing boards, including up to eight in Playa Vista and 10 in North Hollywood. But Playa Vista suffered a blow when Dream Works SKG yanked its plan to build a studio campus there. And in North Hollywood, developer J. Allen Radford is rethinking his plan for sound stages because of problems negotiating a financial partnership and growing concerns about saturation of the market.

Developers of L.A. Center Studios hope to start construction on six more downtown stages by mid-year after keeping their first six facilities booked since opening in early August.

And the boutique Ray-Art Studios in Canoga Park is adding three more production facilities, bringing its total to eight. All but one are committed to tenants. (The Spelling Entertainment TV series "Charmed" is using the five existing stages.)

"We're doing pretty good. We're not that big an operation," said Shawn Papazian, vice president at Ray-Art. "I'm not going to be overconfident, but we've been really lucky."

Studios are more expensive to build than they might seem. While they appear to be stark shells, there are lots of hidden costs -- silent air conditioning systems, strong roofs to support hanging equipment, and massive amounts of electrical capacity.

In addition, it's not a business that's well understood by many developers and lenders, who are more comfortable with standard office buildings, apartment complexes and shopping centers.

"If you look at it from a banker's point of view, you start scratching your head when you have the alternative of building condos or offices, which you build and sell, or build and lease, and you're out," McClellan said.

Sound stages require long-term financing for short-term tenants. And more money is made from providing services, such as lighting and equipment, than by renting the space.

"It's less a real estate play than an operating business," added Jeff Worthe, vice president at M. David Paul Development. "The average developer can't say, `Let's go build a sound stage.' There's isn't a deep list of people who know how to do it."

Last year, M. David Paul announced plans to develop a mid-rise office building and five sound stages at the Tribune Co.'s studio lot on Sunset Boulevard. The developer is still finalizing the purchase of the site and plans to proceed cautiously on the stages.