When Eastern Mall Ltd., the company which owned the studios, facilities and properties at Cinespace, was declared bankrupt Sept. 11, Toronto’s largest studio – with a facility of 12 stages – went under with it.

It’s ancient history that the six-year-old complex on Eastern Avenue was in trouble, and this conclusion, in its slow and deliberate pace, reminds Toronto Film and Television Office head David Plant of ‘watching the crash of the Hindenburg.’

According to one source, the Canadian Imperial Bank of Commerce, as the first mortgager, had taken out a mortgage on Cinespace in the late ’80s for $10 million. cibc officials are not in a position to comment.

In 1992, the Toronto Economic Development Corporation became a second mortgager on the property to the tune of $4 million. The investment company – an arm’s-length operation of the City of Toronto which requires the approval of City Council to make investments – in conjunction with Eastern Mall, had been attempting to refinance the project since September 1993.

Nick Mirkopoulos, president of Cinespace and former president of Eastern Mall, came very close to arranging a refinancing package as late as August.

Mirkopoulos claims it was a matter of $250,000 which brought the space into bankruptcy when the cibc asked him for a non-refundable deposit in that amount to secure his offer and he refused. ‘I don’t trust them and they don’t trust me,’ he says.

Bob Howald, executive vp of tedco, says now he and his colleagues are working with the trustee, Allen Farber and Associates, the tftvo and the Ontario Film Development Corporation to identify potential purchasers in either the film or broadcast industry.

Even if a purchaser is found, Howald says although tedco is a secured creditor, it’s ‘going to be difficult to see a sufficient return on a sale of the property. I don’t think we’re going to see any of our money.’

Problems plague all the studios in Toronto, starting with a commercial realty concentration tax enacted by the Peterson government which penalized land holdings in the Toronto area and created a tax burden for studio owners.

The high taxes, combined with heavy monthly billings from Toronto Hydro (something studios across the country contend with) and a lack of government incentives and abatements, make for a fragile business, says Peter Lukas, head of Showline studios.

‘We have been raped and pillaged,’ he says in reference to the realty tax. ‘We have spent a great deal of money building our facilities and when we received our assessment it was outlandish.’ Showline has been battling the assessment for two years and has an appeal scheduled for mid-October.

The Cinespace complex, which accounts for nearly half the shootable stages in the Toronto area, is reportedly booked. Allen Nackan, who is handling the case at Farber, says he is approaching prospective buyers and will soon be calling for offers. The property is presently being appraised.

Plans are to keep the space in operation while a buyer is being sought, and Nackan says they are ‘entertaining requests for future bookings.’

It’s a major production asset, says Plant, ‘one we can’t afford to be without.’

Mirkopoulos is working out of his studios at Queen’s Quay and in Kleinberg. He claims the Queen’s Quay location will have three large and four small stages in working order by mid-month.

In the meantime, the three studios in the Eastern Avenue area – Cinespace, Cinevillage and Showline – have been battling the construction of a 50,000-square-foot garbage transfer station which is already well underway. ‘We don’t need more noxious industry here,’ says Lukas. The area has undergone numerous environmental assessments in the past and has been cleared as a safe zone. Cinespace is located on grounds where the Toronto Iron Works once stood. PC