Tough Times Hit Prop Houses
For many Hollywood production companies, the stuff that dreams are made of can be found in large, unassuming warehouses--about 28 of them--concentrated in “the Loop” in the eastern San Fernando Valley.
The vast spaces are filled with nearly every imaginable accessory for movie makers: space suits, World War I army boots, vintage ball gowns, Art Deco lamps, disco balls and copies of the Saturday Evening Post.
But staying in business is becoming increasingly difficult for the Loop’s low-margin prop and costume houses as they are squeezed by an unforgiving economy; a recent commercial actors strike; rising rents, energy bills and workers’ compensation insurance; and the exodus of productions to Australia and Canada.
Half a dozen such companies have closed in the last six months.
Last month, after 15 years of providing costumes for such films and TV shows as “The Grinch,” “Boogie Nights,” “JFK” and “Party of Five,” Costume Collection in North Hollywood began selling off its inventory of 100,000 garments.
That followed the demise a month earlier of Wilcox Props, which liquidated a 32-year-old collection of antiques and other period pieces from a warehouse across the street.
Pamela and Jim Elyea, owners of the History for Hire prop house, have been watching the developments at those neighboring businesses with trepidation and sadness.
“It’s taking a big toll,” Pam Elyea said. “This isn’t a wealth-building business to begin with. And this time around, the tough times are causing people to reconsider their future in this business.”
In the last eight months, Remarketing Associates Inc., a Woodland Hills company that sells off the assets of financially troubled businesses, has liquidated the merchandise of a half-dozen Hollywood rental services . Previously, it dealt primarily with technology firms.
“When these rental companies calculate their profitability, they factor in the space that an item occupies and how often it will be rented,” said Remarketing owner Jeffrey J. Tannenbaum. “With increased facilities costs, they have to get their items rented more often or they will feel the impact on their business.”
The same rental businesses that benefited from a boom in entertainment production in the mid-1990s are feeling the effects of a slowing economy, said Cody Cluff, who heads the Entertainment Industry Development Corp.
The number of days that film and TV production companies shot in Los Angeles County doubled from about 25,000 to just under 50,000 from 1994 to 1997, according to the EIDC, which issues permits to shoot in Los Angeles.
Similarly, the number of smaller support businesses that typically employ one to 15 people rose significantly during that period, although exact figures are unavailable, Cluff said.
Many of the prop houses were drawn to the Loop--an industrial area bounded by the Hollywood, Ventura and Golden State freeways--by its proximity to the studios and relatively low rents, which over the last six years have grown from 30 to 40 cents a square foot to about 55 cents, according to the vendors.
“The Loop has been a low-cost area to locate and the businesses there operate on narrow margins,” Cluff said. “The people who are going to survive are the ones with lower overheads and the capital.”
Jean Rosone, who is trying to stay out of bankruptcy by selling off her inventory at Costume Collection, started the company in 1985 by renting clothes from a few costume designers to entertainment productions. It quickly grew into a thriving consignment costume rental business, supplying the TV networks and major studios.
Like many others, Rosone rode Hollywood’s expansion wave through much of the 1990s.
Later in the decade, runaway production and a move by studios to spend more money on their own costume departments chipped away at small, independent companies, Rosone said. Despite those problems, she was able to move to a larger building several years ago. Then came the sharp economic downturn that began last year.
“There’s a lot more people in this position than are willing to admit it,” Rosone said. “I’m one of the first to go through this process, but I won’t be the last.”
Next door, the Elyeas are also feeling the pinch.
They started History for Hire out of their Hollywood apartment in 1985, providing hand grenades, flak vests and machetes for the Academy Award-winning movie “Platoon.”
Their business has grown in spurts, and in 1994 moved to a 33,000 square-foot warehouse in North Hollywood that is a living monument to history.
In the last year, the California teachers pension fund, which owns the building, raised the Elyeas’ annual rent by 25% to $250,000. That does not include rising electricity bills, salaries, insurance, maintenance and the cost of buying and maintaining stock items, from fake corpses to guitars that have been used in music videos and graced the cover of “Rolling Stone.”
The Loop’s prop house owners have always had a sense of camaraderie, trading items and referring clients to otherone another, Elyea said. In the last year, they have banded even closer together, forming support groups, targeting new markets and doing something rare in the business world--divulging closely held financial information to help one another find savings.
“It might sound strange,” Elyea said. “But we are hoping to give each other that edge up so we can all stay in business. People going under never translates into more money in our pockets.”
