‘Too Many Dollars Make No Sense’
In as much painful detail as a power-point speech would allow, Mr. Katersky demonstrated why it is grossly expensive to shoot in Culver City, where production companies routinely are saddled with uniquely Culver City-style expenses that other places don’t charge. This is hardly a bulletin. Productions have been fleeing the Heart of Screenland, and the state, for years. The change is that the patient is getting sicker. No one senses that City Hall is in a mood to scoot closer to the table, narrow its eyes and engage in an old-fashioned cigar-chomping bidding war. For boosters of Culver City, the crusher is that the span of communities competing for filming is expanding exponentially with the advent of globalization. Locales formerly regarded as wildly unlikely, ranging from Albuquerque to Khazakistan, are waggling their little incentives-loaded fingers at Mr. Katersky, until last month the chairman of the board of The Culver Studios. No matter how much times have changed in the film industry, the most dependable constant throughout industry history has been that financially oriented men, and women, still run the studios. Cold-heartedly, quite apart from the creative personalities, the businesspeople make the crucial decisions, as they did long ago. With the financial lures growing sweeter by the hour in a fast-food world, the question is, said Mr. Katersky, “How long can Culver City, Los Angeles, Southern California, remain the Heart of Screenland?”
It Only Looks Like the Southland
“Over 50 percent of the movies that originate in Southern California,” he said, “actually are shot elsewhere. The number will continue to increase for one main reason, economics. Other states and other countries want this business, and they are aggressively going after it with incentives. The form (their recruiting) takes is anything from making the approval process very easy to substantial rebates to available tax credits to film financing available at cheap or low interest rates. Why do producers who live here, and for the most part, work here, go out of state to film?” Mr. Katersky asked.
Not a Hard Riddle to Solve
“Because the savings are substantial — 25 percent or more, plus low-cost financing.” The financier relentlessly returned to this most central of his assertions, as if he were offering a clue to the city fathers of this community. Like the childhood fairytale where a long, unsubtle trail of clues is strewn along a pathway, Mr. Katersky kept igniting neon hints. Throughout his talk, he was figuratively nudging the influential persons of City Hall who were liberally scattered around his audience at the Radisson Hotel. “We all know how expensive it is to live and work in California,” he said. “It is no cheaper to work in New York. But New York has a definitive finance program.” Then it was time for a concrete example to illustrate his main point. He talked about the plans at The Culver Studios for what is called Building J. This is a 50,000-square foot office building on the property of the studio. Mr. Katersky suggested City Hall has tortured the studio on this project with its unique, oppressive, and as far as he is concerned, absolutely non-essential financial requirements. Turning rhetorical again, he asked, “What did it cost us to operate in Culver City vs. elsewhere? They said we had to have a historical study. What’s a historical study?” he asked, and the crowd giggled. “What did we get out of it? I don’t know, but it cost $50,000. We had to put together a Comprehensive Plan. That cost us an additional $432,000. In addition, the city of Culver City has imposed 62 conditions upon us. Now who’s going to keep track of those conditions, I am not sure. That is costing us an additional $500,000. A simple 50,000-square foot office building, that has taken over a year to plan, is costing us over $1 million (in extra assessments).” In a further example of corporate exasperation, he cited the vaunted Downtown Parcel B project, which long has been in a delay mode. In the (needlessly long, he implied) two and a half years since he and his partners were selected as the developers for Parcel B, “construction costs have doubled. Lost time equals money. Plus all the time we have lost negotiating things.” For contrast to Culver City, Mr. Katersky drew a parallel description with Albuquerque where he and his financial partners are building a smart new studio. No fuss at all, he kept saying. No historical review. No Comprehensive Plan. No 62 conditions. Everything seems fast-tracked. “We first looked at the land in Albuquerque last January,” he said. “We had approval by June. We closed on our land by July. We will be open by February. Delays caused by government, none,” he added with a touch of sarcasm. “In fact, they are helping us expedite everything.”
Postscript
Mr. Katersky’s points were made so thumpingly strong, he did not feel the need to leave his audience with a punch line or any other type of memory-whopper.
