Movie Ranches Feeling Effects of Decline in Filming.

About a year ago, the new reality of the L.A. location shooting business slapped ranch owner Rene Veluzat in the wallet.

A student filmmaker from the American Film Institute offered him a measly $10,000 (compared to the market rate of $60,000) for the use of part of his 700-acre Santa Clarita ranch facility, Rene Veluzat Motion Pictures, for 17 days.

Like other movie ranches in the Santa Clarita and San Fernando valleys, Veluzat's spread suffered a dramatic business downturn in 1999. It had steadily declined since the property's 1996 benchmark when nine feature films and dozens of commercials, photo shoots and low-budget projects were filmed on the ranch.

He could either let the property sit empty and lay off staff or agree to allow the filmmakers use of the 1950s desert town at a drastically reduced price. Veluzat took the deal, on the condition that he was named executive producer and his ranch's name rolled in the credits.

"Prices have gone down with (ranch owners) who want to work," Veluzat said. "If you want to work now, you have to give people a break."

Veluzat has been forced over the last three years to lower his rates by an average of 25 percent to keep the ranch operating on a steady basis. And he's not alone.

The Entertainment Industry Development Corp., which issues film permits, reports that L.A. County production days for feature films dropped from 11,542 days in 1998 to 10,528 days in 1999. The EIDC does not segregate the figures by property type.

Many blame the decline on runaway production, as filmmakers move to lower-cost locales like Canada. Whatever the reason, owners of movie ranches all over the San Fernando and Santa Clarita valleys have been forced to slash rates and target new clients rather than let their properties sit idle.

Turning to the Indies 

Veluzat has slimmer profit margins with the lower rates, but has continued to bring money in with a greater volume of small films and other low-budget productions. Big features like "Dante's Peak" have been replaced with small independent films like "In the Light of the Moon" and "Very Mean Men." By getting his name on the credits of these small films, he's gotten his name out to other low-budget producers.

Jeff Morton, owner of Polsa Rosa Ranch in Santa Clarita, has similarly turned to lower-budget movie makers to keep the gates of his ranch open.

Morton estimates he lost 75 percent of his mainstream filming business in 1999, resulting in 50 percent drop in revenues, compared with 1998. That drop forced him to target other clients to stay afloat, many of which he'd turned away a few years earlier. He dropped his asking price, in some cases well below his normal rates, which start at around $1,500 a day.

Morton turned to start-up filmmakers using new technology -- such as camcorders, untested film equipment and the like -- and dropped his prices accordingly.

"We made a business decision, like opening a five-star hotel to the business class and allowing the middleman in," Morton said. "We work with anyone who's seeking out new technology, has a good idea and enough capital to prove their idea."

Morton's no longer making money, though he expects to start turning a profit again by this summer. But the small projects he has attracted have kept him from laying off staff and at least stabilized business.

He also gets to keep the sets built by film crews on his land, which he believes Will boost the value of his property if and when the features return. For "Courage," a low-budget film shot for the Fox Family Channel, producers built a replica Civil War town on the ranch.

Morton is hoping that if the young producers now shooting on his property are successful, they will return to the ranch with bigger projects in the future and spread his name around.

"If they're successful with their model, others will try this and we're comfortable that, as the number of films grow, they'll stay here," Morton said.

Strategy doesn't always work

Not all ranch owners are convinced that lowering their prices will help bring in more business.

Jon Petersen, co-owner of Paramount Ranch Locations, which owns a ranch in the San Fernando Valley, tried lowering prices but said it didn't make much of a difference to producers unless it was substantially below the going rate. For him, it didn't pencil out.

"It doesn't make a dime's worth of difference," Petersen said. Instead of cutting rates, Paramount has replaced feature film shoots with magazine shoots and other still-photo work.

"We've done some lower-budget stuff, more than we used to," he said. "It's helped some, but it doesn't make up for a major movie."

In 1998, four movies were at least partially filmed at Petersen's Chatsworth ranch, including "Armageddon." Last year, he had none. And so far, he has no commitments for this year.

Jim Annin, owner of Agua Dulce Airpark in Santa Clarita, has chosen to wait out the downturn until the big pictures return.

"There really isn't anything you can do," he said.

But, he says, things are looking up. John Travolta's next film, "Numbers," has begun filming on his property.

Indeed, the EIDC reports that the number of feature film permits issued was up 17 percent for the first two months of 2000, to 1,638, compared to the like period a year ago when 1,398 permits were issued.

Most ranch owners who lowered their rates expect the features to return and consider the lowered rates a temporary phenomenon.

"For years, I've said to myself, business is awfully good. (Producers) can go anywhere they want and spend their money, and they finally did," Veluzat said.