Albuquerque Studios is Off The Auction Block

From the Albuquerque Journal, by Dan Mayfield

The auction is off.

Albuquerque Studios' parent company, Pacifica Mesa Studios, and its creditors have worked out a deal and the studios will remain under the current management, a company spokeswoman said Thursday.

Nearly three weeks ago, Pacifica Mesa was served with a foreclosure notice on Albuquerque Studios by one of its creditors, Workers Trust Realty II. The company's loan is for an ownership interest in the studio. It is the smaller of two major loans Pacifica Mesa has taken out to finance the $90 million studios.

The bank, in a legal ad taken out in the Journal, said the company owed nearly $21.5 million to Workers Trust and was going to hold a foreclosure auction next Friday. Now, that's not going to happen.

"All of the parties are working together to resolve their differences. Albuquerque Studios continues to operate with current management," said Pacifica spokeswoman Sarah Robarts.
No details on the new arrangement were disclosed.

The bank had said the foreclosure sale was due to "default in the payment of debt and performance." The holder of the loan appoints the managers of Albuquerque Studios.
Pacifica chairman Hal Katersky said Wednesday the loan is one of two the company has on Albuquerque Studios and said he was unaware of any payments due to the bank before the announcement. Representatives of the bank have not returned calls by the Journal.

Katersky said that Pacifica was working with Amalgamated Bank, which holds the larger loan, on restructuring the entire debt. He wouldn't say how much that loan is for.

To read the full article, click here!

Albuquerque Studios

Albuquerque Studios is going to the "auction block." Having defaulted on a $21.4 million loan, their creditor, Chicago Investment Trust, is calling in the chips, and The Studios (including their debt) is scheduled to auction on May 14th, in Albuquerque.

So, if this does happen, what does it mean for the New Mexico film industry?

It depends, but I think it will work out just fine.

Firstly, there was film in New Mexico before Albuquerque Studios, and there would be film after Albuquerque Studios, whether it was shuttered totally (unlikely) or if it was taken over by another studio entity. The notion that this spells the "demise" of anything (other than the careers of some studio executives and, perhaps, the name "Albuquerque Studios") is unfounded.

Secondly, Albuquerque Studios was built during an intense spike in production business in New Mexico, when our state was well out in the forefront of the "film incentive" game. At that time it made a lot of sense to build the world's largest studio for $100 million dollars. But that was before the economic downturn. And before dozens of other states launched their own film incentive programs. That being said, its possible that the current state of Albuquerque Studios as as much a result of management as economy. It's hard to tell.

Either way, under any circumstances, it's never easy to recoup $100 million sheckles.

Much of filming in New Mexico is location based, and not every picture or TV show is going to be mega-budget. Garson Studios in Santa Fe has been around since 1989, and have hosted major productions including No Country for Old Men, Legion, Brothers, Appaloosa and more. While they don't garner much press, they've been here for a long time, and will likely continue to be so. That all being said, there's much clout and function added to a film industry when we have the scope and scale of a facility such as ABQ Studios. So, to lessen its impact would be an oversimplification. And it would, in fact, be more difficult to draw in major, studio-based productions without it.

Yet a lot of film in New Mexico is also sustained by low to mid-budget pictures. While we do see mega-budget shoots that could require a mega-studio, it's the exception more than the rule. So, again, there's no shortage of productions not in need of a major studio, and I don't forsee much of a difference in the number of productions that will be landing in the State. However, without big-spending films, you could see overall expenditures drop. But everything is just conjecture at this point.

Many also felt that the studios were priced high. One of the benefits of filming in New Mexico is the lower cost of doing business, and, of course, our 25% cash rebate for productions. Charging high rates, however, can offset much of that benefit. Twenty-five percent back means little if you're already overpaying. My hope would be that new management would handle the equation differently, and to work with the incentives to make New Mexico an even more affordable destination. So, again, depending on how the cards play out, this could turn out to be a positive development.

Also, the former chief of ABQ Studios, Nick Smerigan, is accused in a lawsuit filed by Pacifica Ventures to have funneled film business to new studios in Mississippi, in which he has an interest (ie, his company Nick Smerigan is the founder of RoadTown Enterprises, the Los Angeles-based firm that is managing the studio.) These are lean times, and every production counts. I have no idea, but let's just say that for conversation sake it is true (its a much more interesting story this way, anway). I'd have to assume any future management would be under much more stringent oversight, and we'd be unlikely to have that happen again. So, perhaps, another plus. I also think there's quite a few parties interested in picking up a film studio for cents on the dollar, and I'd expect they're not a bunch of hacks.

Also, Santa Fe Studios is still firmly in the pipeline. While not nearly as large as ABQ, it would provide New Mexico with an incredible studio space that I feel is in alignment with more sustainable planning; smaller in scope with graduated improvements and expansions. The current situation in ABQ could also help foster a more streamlined process to getting SF Studios up and running - another plus.
It's always easy to hit the panic button, especially in such a tepid market and uneasy times. The real challenge comes in trying to find the good in any situation, because that's part of what helps open the way for new ideas and positive developments. Film professionals are by nature a resilient and inventive lot, and are able to weather a lot of ups and downs. After all, if you can't handle chaos, you shouldn't be involved in film.

Thus far, I'm not seeing anything that's making me reach for the life preserver, and I'd be one of the first to know if the ship is going down. Far from it. In fact, I'm interested to see how things unfold from here and believe that there are some great possibilities in store.

We're fine. Everything changes. There's usually some bumps and bruises along the way, often, in retrospect, just to keep us on the edges of our seats. And those of us in film should be used to that. After all, if we're the one's who create dramas, we should also be the best at navigating them.

Feel free to email us your thoughts and opinions on this issue. Email to info@crewnewmexico.com

Let incentives take state film industry to maturity

- Editorial submission by Lance Hool, CEO Santa Fe Studios and Hal Katersky, chairman and CEO of Albuquerque Studios.

The near-term success of our film industry in New Mexico depends on film incentives; in the long term it will depend on developing the local infrastructure, talent and crews.

We are on a solid ground, but we must keep growing. New Mexico is the most desired place to make movies, outside of Hollywood and New York. The crew base is growing and infrastructure is being established, but there is still a long road ahead. According to the Motion Picture Association of America, only 2 percent of the films shot in North America in 2009 were shot in New Mexico. We need to grow that number.

We've seen the growth of the film industries in Australia and Canada, and the demise of the Mexican and South African film industries. Each of these industries was launched with the help of incentives from governments.

The Australian and Canadian film industries are both thriving. They began to flourish in the 1970s with the help of tax incentives. Today they have reached a mature stage, and their indigenous industries are self-sustaining. This is proven by the fact that, although their currencies have surged against the U.S. dollar, both industries continue to thrive. Films can now be produced with 100 percent local talent. If Hollywood wants an Australian- or Canadian-made film, they need not import Hollywood crews and talent. Each of these two industries has excellent local talent and crews to, not only shoot the movie, but handle all post-production as well.

The South African film industry grew quickly with favorable tax incentives in the 1980s. Unfortunately, the South African government pulled the incentives too early and abruptly. Unlike Canada and Australia, the industry had not matured. There was no infrastructure, and the industry literally evaporated. The country is grappling with how to grow back their industry and has enlisted the help of New Mexicans, among others, to emulate our successful program of incentives.

To read the full article, click here!

A Tale of Two Studios

by Dan Mayfield, ABQ Journal

Mom always said life's not fair. The state is chipping in $10
million toward the construction of Santa Fe Studios, while Santa Fe
County stepped in with a $6 million loan for the studios and a $3
million loan for the eight-acre site.

In total, more than $19 million in public money is going toward the
$28 million project just south of Santa Fe.

In contrast, Albuquerque Studios spent $74 million (and $20 million
later) in private money to build stateof-the-art studios at Mesa del Sol
in Albuquerque four years ago.

"Everything is private. No state, federal or city investments," said
Nick Smerigan, chief operating officer of Albuquerque Studios.

Albuquerque Studios is part of the Pacifica Ventures family of
studios, which also has studios in Pennsylvania and Connecticut.

Santa Fe Studios is being built by the Hool family of movie
producers who have made films like "Flipper" and "Crocodile Dundee in
Los Angeles."

Questions about the fairness of the Santa Fe deal have popped up, in
part, because the Hools are longtime friends of the governor. The
Governor's Office and the Hools have said their relationship had nothing
to do with the deal.

Eric Witt, Gov. Bill Richardson's deputy chief of staff, insists
comparing the two studio projects isn't fair.

Witt said the state did a lot for the Albuquerque project located at
Mesa del Sol, including providing a road to Albuquerque Studios.

"That road was a big dang deal," he said, at a cost of $6.25million.
He also mentioned tax breaks and other improvements to Mesa del Sol that
benefited Albuquerque Studios. "I know it's not quite the same thing."

Smerigan has a different view.

"We paid for our own power, water lines. I didn't receive any
benefit with the possible exception of the road," he said. "I have not
gotten one break on anything. I thought that was going to be a benefit
that everyone would appreciate. Every piece of infrastructure on this
lot we paid for ourselves."

Jason Hool, president of Santa Fe Studios, points out that the
public money for his project comes with plenty of strings attached,
which guarantee the project benefits the state. So far, he said, the
Hool family has invested $1million and has raised more capital to finish
the construction.

So how did a California company end up with a project in which
taxpayer money covers more than two-thirds the cost?

Funds allocated

Long before Albuquerque Studios was planned and when the state was
flush with money in 2002, the state started looking at a need for
studios.

The film incentive program was picking up steam, Witt said, and the
Legislature appropriated $10 million for a studio in Santa Fe County,
which was the hub of the film business then.

"The allocation ... was the first one. At that time nobody was in a
position to actually build a soundstage facility," Witt said.

After the Legislature approved the $10 million grant for Santa Fe
County, the Governor's Office removed "Santa Fe" from the bill so the
money could be used statewide in case a project elsewhere was proposed,
Witt said. It never was.

The money was added to Richardson's Media Fund, which has money set
aside for film and media projects like training programs.

At the same time, Santa Fe was working on a media park in an unused
65-acre parcel of land just south of Santa Fe and about a half-mile from
the Bonanza Creek Movie Ranch, where "3:10 to Yuma" and "Young Guns"
were filmed, said Robert Griego, the Santa Fe County planning director.

"It began as an economic development project," he said. "We did an
economic development plan and in our plan we had targeted industries and
one of them was film and media."

Santa Fe County zoned the park a media district and set out to look
for an owner-operator for a studio, Griego said.

About three years ago, the Hools showed up.

"The county says, 'We're ready to move on this thing. Where's our
$10 million?'" Witt said.

By then, two proposals had already come and gone for soundstages.
The Hools had an ambitious project, a green studio designed by a
superstar architect, and came with a heavy-hitting board of directors
who represent Warner Bros., 20th Century Fox, Sony Pictures
Entertainment and Universal Pictures. It just happened, Witt said, that
Conrad Hool and Gov. Richardson were old friends.

The state at the time had the money in two piles, Witt said. The
state used $3.5million in Local Economic Development Act funds, which
are earmarked for projects that create jobs. The rest, $6.5million, came
from the media fund.

The money was given to the county, which is passing it on to Santa
Fe Studios.

Tied to jobs

In addition, the county has agreed to make a lowinterest, 10-year
loan for $6million to the Hools. And it is allowing the studios to buy the land, valued at about
$3million, with five payments. But rather than a monthly payment on the land, the Santa Fe Studios will pay back the loan after it reaches certain milestones in job
creation.

For every 100,000 hours of work, the studio pays the county
$520,000. The land sale is expected to close soon, said Santa Fe County
Attorney Steve Ross, and the Hools will have six years to pay off the
loan.

"We were struggling to structure something that would work for them
but not expose the county," said Ross.

The $10 million state grant - which was approved last week - will be
used for construction. Then, Ross said, the county will offer the Hools
the $6million loan.

If the Hools don't build the studio, they owe the state $10 million.
If the studio can't pay the $6 million loan, the county can foreclose on
the project, said Santa Fe County Attorney Steve Ross.

"We have to build a studio. It's not money in our pockets. We have
to deliver jobs. It we fail, we have to pay the money back," Hool said,
including the state grant. If business booms, Hool said, the studios
will own the land quickly. If business is slow, it could

take the full six years.

Santa Fe County Commissioner Virginia Vigil said construction job
hours will count toward the total.

"The intent was to link those dollars (the loan) to the ability to
create jobs," Vigil said.

Most film crew and actors work more than 40-hour weeks, usually
about 60, which will accelerate the pace of the studios reaching each
100,000-hour milestone.

Two large films, with about 120 film-crew workers, truck drivers,
caterers and more would provide 100,000 hours of work, said Jon Hendry,
the head of the state's film crew union, the International Association
of Theatrical Stage Employees.

The vast majority of state film work is union work, whether that's
with IATSE, the Screen Actors Guild, the Directors Guild of America or
others. Unlike a regular 40-hour workweek, Hendry said film jobs are
based on a 70-hour workweek.

The county estimates that the studios will pay back the entire loan
within the first five years of operation, Vigil said.

"We like this business model," Hendry said. "We told the county we
want to keep their feet to the fire." More About the Jobs

Pay Scale

The jobs created by Santa Fe Studios are expected to pay more than the
average wage for Santa Fe County, which was $42,000 in 2008, according
to the Bureau of Labor Statistics. The average film crew member makes
$48,000 a year, working on three films. DGA and SAG members and others
on set can make considerably more, said Jon Hendry, the head of the
state's film crew union, the International Association of Theatrical
Stage Employees.

An entry-level IATSE member can make $23 an hour, Hendry said.

Unemployment Benefits

Like any company, film productions must pay into the state unemployment
insurance benefits package, said Jason Lewis, chief of staff for the
Workforce Solutions Department.

Since the average film worker works 45 weeks a year, he or she is
eligible for state unemployment benefits when not working that can last
26 weeks and up to 86 weeks with new federal programs, Lewis said. Film
workers, who work on and off, are treated much the same way seasonal
workers are, Lewis said, and are not an additional strain on the
unemployment insurance program.

Health Care

A union member must be covered by a health plan to be eligible to work
and the health-care plans vary from a simple, highdeductible
$100-permonth plan to an $800-per-month plan that covers an entire
family. So film workers are not a drain on the state Medicaid system,
says Hendry.

New Mexico Lighting and Grip

Industrial Strength Support for the New Mexico Film Industry

There are many factors that help productions decide where they're going to film, and industry supporting infrastructure is one of them. In addition to our attractive incentive program, New Mexico has industrial strength vendors who know the ins and outs of working in Hollywood.

New Mexico Lighting and Grip is one such company.

Opening its doors at Albuquerque Studios in 2007, New Mexico Lighting & Grip Company offers a keystone inventory of lighting and grip equipment and serves major motion pictures, independent features, television and commercial productions in New Mexico, and nationwide. Their credits include In Plain Sight (season 1 and, soon, Season 3) Breaking Bad (season 1-3), The Spirit, The Game, Cirque du Freak, The Betterman, The Resident, Paul, Book of Eli, Terminator 4, and The Spy Next Door.

Their 25,000 sq ft warehouse is stocked with HMI, Incandescent, Kino Flo ®, Dimming, Moving Lights, generators and LED Lighting. For grips, the company carries a full range of digital blue and green screens, steel deck and green bed scaffold systems. NMLGC is also the local representative of Airstar Balloon Lighting.

"It is great to be partnered with Albuquerque Studios and part of the growing New Mexico filmmaking community," said Sean Buckler, rental manager for New Mexico Lighting & Grip Company. "We offer the full range of equipment from complete packages to supplemental packages for independent gaffers and key grips."

In 2008, NMLGC opened New Mexico's first Expendables Store which carries gels, globes, electrical, tape, tools, camera supplies, hardware, lumber, paint/paint supplies, textiles, office/kitchen supplies, apparel.

Meet The NMLGC Management

Sean Buckler, Manager
Sean Buckler is the Mangager of New Mexico
Lighting and Grip Company. Prior to his current role, Sean served as Rental Agent for NBC Universal Set Lighting in Los Angeles were he gained a broad spectrum of industry experience and knowledge. In 2007, Sean was selected to set up NMLGC in Albuquerque, New Mexico, and was subsequently promoted to his current position in January 2009.

Under his management, NMLGC supports the independent, eight stage Albuquerque Studios as well as numerous off lot productions. Since opening, New Mexico Lighting and Grip has serviced 10 features, 3 television shows and numerous independent productions in various locations throughout North America.

Sean's credits include American Pie, Friday Night Lights, American Dreamz, Fast and the Furious: Tokyo Drift, Accepted, Cirque Du Freak, and Paul.

For more information, a tour, or equipment or expendables request - in New Mexico or nationwide - contact Sean at (505) 227-2500, or email sean.buckler@nmlgc.com.

Santa Fe Studios betting big on new complex

The producers of the nuclear holocaust film Terminator Salvation, released earlier this year, originally planned to crash a helicopter into a lake in Budapest. But they decided instead to take advantage of New Mexico's film incentives program and make the science-fiction movie right here in the state, much of it at the 28-acre, two-year-old campus of Albuquerque Studios.

A shallow tank on a few acres of flat desert outside the facility became the crash site, monster machines soared over the Rio Grande Gorge, and John Connor (Christian Bale), a future Resistance soldier, rode a motorcycle across the vast mesa west of the Duke City.

Tax rebates, interest-free loans and free use of some state property are luring filmmakers to New Mexico, creating jobs and new sources of revenue. The fourth feature film in the Terminator series was the biggest picture shot in the state last year and one of 44 major TV and film productions made in New Mexico since January 2008.

Albuquerque Studios also are home to the Emmy Award-winning television series Breaking Bad, now in its third season.

But six of its top-of-the-line sound stages built in 2007 and two smaller studios added later are not all fully booked, according to chief operating officer Nick Smerigan. And now he might be getting some competition from a new film studio complex that is expected to break ground this winter on county-owned land off N.M. 14 south of Santa Fe.

That raises the question about whether there is enough demand for another major studio facility in New Mexico.

County officials are gambling there is. State and local officials think so. Lisa Strout, director of the state Film Office, said there's no doubt that Albuquerque Studios has changed the landscape of the film business in New Mexico.

To read the full article, click here.

Albuquerque Studios Gets Into the Incentive Groove For Music & Sound

Albuquerque Studios and Los Angeles-based house Groove Addicts have entered into a strategic partnership whereby the latter's music catalog for film and TV productions can be accessed for projects being made in New Mexico, thus tapping into that state's 25 percent rebate incentive.

Uses for the catalog include temp tracks, background cues, songs, music supervision, trailer music or sound design for commercial TV or film projects. More than 40,000 music tracks will be available for immediate download and license from Groove Addicts' servers at Albuquerque Studios.

Groove Addicts produces a dozen catalogs in-house, in addition to handling many leading music catalogs from around the world. The company continues to expand its libraries' inventories for film, TV, radio, video, audio, video game and multimedia producers.

The deal between Albuquerque Studios and Groove Addicts brings music and sound into the incentives arena at an opportune time given the state of the economy, resulting in tighter budgets and increased cost consciousness.

"This is a perfect complement to our existing production services. It is an extreme value that is unique to New Mexico, and fits right in with our plan to extend the broad range of services that are available to Albuquerque Studios' clientele. We look forward to working with Groove Addicts' principal Dain Blair, and the creative energy his entire team brings to the table of the New Mexico film industry," said Albuquerque Studios' COO Smerigan.

Blair, who has been an integral part of the acquisitions and licensing of rights for projects involving artists such as, Madonna, U2, and The Police, and feature films such as Iron Man, No Country for Old Men, and I Am Legend, stated "I see this as a win/win/win situation for Albuquerque Studios, their clients, and Groove Addicts....adding a first-class music solution for their [Albuquerque Studios'] clients."

Check it Out! New Studio in Albuquerque - Elixir Studios

It's our pleasure to introduce you to a brand new, state-of-the art, 3,000 square foot production space in Albuquerque - Elixir Studios.

The product of renowned photographer Robert Reck, Elixir offers two bays with unobstructed shooting space, 14' ceilings, and a two-wall cyclorama. They have a separate daylight studio, hair and makeup stations, equipment rentals, wardrobe area replete with racks, steamer, mirrors, and stereo system and kitchenette.

They're conveniently located near prop houses and support services, provide ample free parking, and can assist you with catering and other production needs.

For photo, video, and fashion shoots, as well as casting calls and event space rentals, the Elixir staff is dedicated to providing you with New Mexico's most professional and savvy production environment.

Call to set up a viewing at (505) 243-5907, or visit elixirstudiosabq.com.

Excellent Article from the Hollywood Reporter

Here's a great new article on the state of the New Mexico Film Industry - Made in New Mexico - from the Hollywood Reporter.

Talks about Albuquerque Studios, the film incentives, and quotes from Lisa Strout of the film office and others about why movies love coming to shoot in New Mexico.