‘It’s a rough ride,’ cautions Toronto’s Showline Studio president Peter Lukas after 24 years of weathering the highs and lows of the stage rental industry. ‘There’s a lot of turbulence in this business and many studios go down. It’s survival of the fittest.’

But despite gloomy forecasts, western producers are willing to take their chances and move full-speed ahead on soundstage projects.

With a new tax credit to its advantage, Manitoba is seeking to attract coproducers and foreign players to the province. But a recent American producers tour of the province sparked concern over the lack of a soundstage.

‘This is the first time we heard the Americans say that not having a soundstage in the province is a missing link,’ says Cheryl Ashton, executive director of the Manitoba Motion Picture Industries Association. With production volume projected at $40 million for ’97, up from $32 million last year, she adds that the issue may come to the forefront quickly if it becomes evident that further expansion is being hampered by lack of a facility.

Credo contemplates soundstage

Credo Entertainment president Derek Mazur is contemplating entering the soundstage business. Currently renting two warehouses in Winnipeg and finding additional shooting space difficult to find, he says, ‘It’s beginning to make sense to consolidate.’ Mazur is looking at the possibility of converting an existing building into a 70,000-square-foot facility with two studios totaling 35,000 square feet, which would also serve as the basis for Credo’s corporate offices.

Lighting and equipment suppliers and post-production companies have also approached him about becoming tenants. He’s budgeting the studio at over $4 million but won’t make any final decisions on the project until mid-October.

Two additions to Calgary studio landscape

At Calgary-based Tomali Pictures, Tom Jackson is breaking ground next month on Tomali Pictures Studios, a ‘state-of-the-art’ facility offering three soundstages with collapsible walls for a total of 80,000 square feet and a swing stage for effects. Jackson won’t reveal the price tag but says it is ‘hefty.’ Open for business in spring 1998, Tomali will move its production offices into the facility and also plans to lease space to a film transferring company.

The closure of Alberta’s film investment agency is taking its toll on production volume in the province, with grim predictions that the $150 million worth of production activity Alberta saw in 1996 won’t nearly be reached this year.

Still, Jackson is willing to take the gamble by targeting primarily American productions. He is currently in talks with u.s. studios to bring their projects to the facility and predicts that if he is able to reel in the projects he is currently aiming for, the soundstage will generate $30 million to $50 million of production activity in the province over its first year. Jackson adds that the offshore work should bolster business for the local film services industry and serve as a catalyst to the tax credit movement.

Another studio is going up this fall on a 160-acre lot in Airdrie, four miles north of Calgary. Peter Brochu, president of Heartland Development Corporation, has been collaborating with local businesses and the film industry for two years on a $5-million facility to house four 50,000-square-foot stages and featuring full fiber optic realtime connections to editing studios.

Scheduled to open by spring ’98, Brochu envisions the facility as a one-stop shop and is in discussions with local unions and equipment and rental service companies to have offices on site.

Located eight minutes from the airport, with a hotel close by and a panoramic view of the mountains in the distance, Brochu is confident the project is viable. ‘If we build a premium, first-class facility they will come,’ he says.

Regina stage in the red

The Saskatchewan Motion Picture Sound Stage opened over a year ago with much the same enthusiasm, but Saskfilm’s Mark Prasuhn says the Regina facility has remained ‘underutilized’ and is vacant this summer with no bookings anticipated for the fall.

To date, the soundstage has seen total production budgets of $12 million to $13 million and revenue of roughly $100,000. With an operating budget of $180,000 per year, this puts the soundstage in the red. The upcoming year d’esn’t look promising. Production budgets in the province rang in at $26.4 million in ’96; this year’s total is expected to sit around the $21 million mark. With location rentals and warehouse space going dirt cheap, producers are opting to forego the soundstage route.

The lack of a labor incentive is the crux of the problem, making it difficult to attract projects to Saskatchewan. ‘We got this studio a bit too soon,’ admits Prasuhn, adding that rather than one large soundstage, smaller studio space would have been more practical at this point in the development of the industry.

With this in mind, Saskatoon producers are considering a collaborative effort to build a soundstage to support small and midsized projects.

According to David D’erkson at The Edge Productions, a proposal submitted to the Saskatchewan Regional Economic Development Authority in January calls for a $4 million privately financed (with City of Saskatoon incentives) soundstage of 25,000 square feet. Four local companies will base their production offices out of the site, he says, and talks are underway with a recording studio, business services, editing and production services companies (including William F. White) as possible tenants.

But the producers are waiting for the Saskatchewan government’s decision on a labor tax credit for the film industry before taking the plunge into soundstage development. ‘We need the tax credit to support production or the studio won’t carry itself,’ says D’erkson.

Showline Studios, currently operating five soundstages in Toronto, is finalizing a deal for two more downtown studios. With its increasingly hefty slate of American features, president Peter Lukas has been forced to turn away commercial clients, which make up 50% of Showline’s volume.

The competition for American work is stiff and the market volatile, he explains, and not wanting to lose the commercial market the new studios will be primarily geared towards spot work and smaller features while the other studios will handle bigger budgeted features, 80% of which are generally American.

Stats from the Ontario Film Development Corporation’s Location Promotion and Services division concur that ofdc-serviced foreign shoots are on the rise: 1996 production levels jumped to $252.8 million, an increase of $100 million or 60% over 1995, with $530 million spent in the province as a result. Domestic production, however, has been dropping, leaving $277.4 million in Ontario in 1996 compared to $338.9 million in ’95.

Although foreign work is increasing, Lukas says the costs of production and studio operation are also on the rise and revenue margins are slim. Showline spent in the realm of $250,000 on upgrades over the last five years and roughly $300,000 a year is earmarked for general maintenance. Lukas has tried to hold the line on rates but last September was forced to make a 4.5% increase to offset rising operation costs and maintain a profit margin.

Overall, Lukas says Toronto’s ratio of studios to production volume is in line. ‘I don’t think we are losing productions because of a lack of ample studio facilities,’ he says.

Niche marketing

Smaller Toronto studios are looking to particular niche markets to find work.

Business is steady at Wallace Studios, thanks to the many small-budget series cropping up for the specialty channels, says manager Jody Gale. Stone Soup Productions’ Harrowsmith Country Life is booked for August and a couple of production companies with shows for The History Channel are currently in talks for space.

Up and running for eight months, Toronto’s News Theatre has found opportunities servicing film and tv shoots requiring audience and theater settings (Maclean’s tv and episode inserts of Straight Up and Twitch City) as well as commercials, news conferences and corporate work.

Room for more in Que.

Quebec is also seeing an increase in American features, says Studio Lasalle technical producer Jean-Francois Besner, and although studios capable of handling tv projects abound, he asserts that more studios equipped to handle larger productions are required. LaSalle’s volume is up 15% from last year, mainly due to feature work, and revenues have also increased by about 25%, he says.