Company Town : Hollywood Filmmakers Zoom In on Czech Republic, Slovakia : Movies: Despite some problems, superb locations and bargain prices attract attention.

Czech President Vaclav Havel once complained to a reporter that the problems in the former Soviet Bloc countries seemed insoluble. “We are finding out that what looked like a neglected house a year ago is in fact a ruin.”

Call it luck, but the playwright-philosopher’s dismal economic metaphor has become a cinematic asset. Ruins, medieval and baroque buildings, even crumbling castles, are attracting a slew of U.S., Canadian and other foreign filmmakers to the former workers’ paradises of the Czech Republic and its neighbor, Slovakia.

Producer Raffaella de Laurentiis recently ventured into Slovakia for the making of “Dragonheart,” a Universal Pictures 10th-Century drama starring Sean Connery, Dennis Quaid and a computer-generated dragon. The cast and crew spent their nights filming among the ruins of a sprawling 13th-Century hilltop castle, Spisske Hrad, 350 miles east of Prague.

De Laurentiis said the production will pump $5 million to $7 million into the local economy. She also estimates she’s saving a third on her production costs. “The props, the costumes and the sets--we’re having them all made at the studio. We (even) found people who can still embroider,” she said.

The superb locations and experienced crews with lower salary demands also lured the maker of Home Box Office’s “Fatherland,” a Cold War thriller based on the premise that Adolf Hitler won World War II. With its blend of old and new, Prague became 1964 Berlin under the rule of the 75-year-old Hitler. “Our crew costs were about one-third of those in Los Angeles,” said Gideon Amir, a producer.

For the “Fatherland” production staff, prices at a Western-style hotel in central Prague were the only drawback to an otherwise happy filming experience.

“We could only negotiate $80 a night,” said producer Ilene Kahn, who is accustomed to a $40 to $50 outlay. But then she ran into a difficulty no one could have foreseen. For a crowd scene, the crew hung a three-story-high banner from the hotel, proclaiming that “the Fuhrer has promised peace and prosperity.” The hotel management received so many complaints that the crew was forced to find other accommodations in its last week.

The other drawbacks to working in the Czech Republic include poor telephone service, the need to hire interpreters and--worst of all in some people’s view--a deficiency of California cuisine.

But pioneers who ventured forth four years ago say those problems are minor compared to the early days when an inoperative telephone system, a lack of fresh fruit and vegetables and technicians’ penchant for long lunches and short working days played havoc with shooting schedules and team comfort.

Producer Rick McCallum started filming “The Indiana Jones Chronicles” in 1990. The show was canceled by ABC but was picked up by the Family Channel for four new episodes this fall. “In the first year, we fired 30 out of 60 crew members by Christmas,” he said. “Crews weren’t used to the long hours. They took long lunches and they drank too much.”

But past clumsiness has proved a modern advantage. Foreign filmmakers have to work through a Czech holding company, so McCallum early on helped finance a quintet of young producers, who supply him with the crews and book the same people again and again. The Czechs and Slovaks learned quickly. “We only bring in department heads,” he says.

Prague stood in for Paris, Vienna, Rome, St. Petersburg, Stockholm and Munich for McCallum and his crew over 42 days this spring. “It’s the cheapest place for us to film, with the best locations,” he said.

Skylines and streets without commercial signs, billboards or TV antennas made shoots easier and less costly. Permits to film in palaces “equivalent to the sumptuousness of Buckingham Palace” can be had in days. “It would take six months elsewhere in Europe,” said McCallum, who estimates he saved $600,000 on a $1.2-million episode.

For scenes requiring thousands of extras, he paid $8 a day, compared to $100 in the United States. He put everyone up in apartments rather than hotels and arranged morning meetings at subway stops. Those gatherings made it easier to inform people about daily changes in the schedule.

Earlier difficulties with communications have eased, but at a cost. Producers buy dedicated telephone lines but increasingly use the state system for fax and phone.

Food issues persist, particularly outside Prague. “We flew in a chef from England after three weeks of a 10-week shoot,” said Bruce Davey, producer of “Immortal Beloved,” a Beethoven love story starring Gary Oldman and Isabella Rossellini.

Still, Davey estimates he saved $3 million to $4 million on the film backed by Mel Gibson’s Icon Productions, with U.S. distribution by Columbia Pictures. “It allowed us to put more money on the screen,” he said.