The Walt Disney Co. said Wednesday that it would build a 56-acre production facility in northern Los Angeles County, casting a ray of light on an otherwise gloomy film economy that has hemorrhaged thousands of jobs in the last decade.
The Burbank company said the proposed Disney/ABC Studios at the Ranch would occupy a corner of the Golden Oak Ranch, a sprawling 890-acre parcel off California 14 that has been the setting of such classic films as "Old Yeller." Plans call for 12 soundstages, production offices, a commissary and other facilities that could be used for film, television, commercial and new media projects.
Disney's new complex would add a much-needed boost to Los Angeles' entertainment economy, which has been reeling from a production slowdown caused by the recession and a continuing exodus of film and TV jobs to Canada and states such as New Mexico, Louisiana and New York that offer generous film tax breaks and credits. Disney-owned ABC moved its own sitcom "Ugly Betty" from Los Angeles to New York last year, which helped spur the state Legislature to implement its own film tax credit program earlier this year to curb so-called runaway production.
Still, as Disney's announcement attests, the bulk of television production remains in Los Angeles. The project, if approved, would not only create an estimated 2,854 production and entertainment jobs, but bolster the struggling local economy by adding more than 3,000 construction jobs and injecting $522 million in construction-related spending and $533 million in annual economic activity thereafter, according to the company.
The project is one of the largest expansions of production space by a major studio in recent years. NBC Universal announced an ambitious plan in 2006 that would add 308,000 square feet of production facilities -- including new and relocated outdoor sets -- as part of a $3-billion makeover of its Universal City property.
Disney filed applications Wednesday with Los Angeles County planning officials in the first step of a lengthy approval process. The new complex is not expected to open before 2013. County officials anticipate little opposition from the community, which has already become a television production hub in recent years. A half-dozen television shows, including HBO's "Big Love" and CBS' "NCIS," are based in nearby Santa Clarita.
Local officials and Gov. Arnold Schwarzenegger were quick to praise the plan Wednesday.
"The proposed expansion will be a significant economic boost for the Santa Clarita Valley and northern Los Angeles County," said Supervisor Mike Antonovich, who represents the area. "Although the county must review and analyze Disney's application, I am encouraged that one of the world's largest and most successful entertainment companies is making this commitment."
The ranch has been used as an outdoor filming location since the late 1950s, when Walt Disney selected it as the setting for "The Adventures of Spin and Marty" segments of "The Mickey Mouse Club." Its mountain ranges and meadows have provided the backdrop for movies such as "Pirates of the Caribbean: Dead Man's Chest," "The Princess Diaries 2: Royal Engagement" and television shows including "Beverly Hills, 90210" and "Boston Legal."
Disney's decision to invest in new production facilities comes as soundstages and other service providers around Los Angeles have struggled or expanded elsewhere. Earlier this year, Culver Studios lost its major tenant when the game show "Deal or No Deal" moved to Connecticut to take advantage of that state's tax credit. Sony Pictures Imageworks, one of Hollywood's leading visual effects companies, moved a part of its operations from Culver City to New Mexico to take advantage of film industry inducements.
"There's a lot of available soundstages in L.A. at the moment," said Tim Mahoney, executive vice president of Hollywood Center Studios. "We're fighting runaway production. This is probably the lowest occupancy that all the stage complexes have faced in a long time."
Indeed, much of Hollywood is retrenching in the face of declining DVD sales, reduced revenue from television advertising and uneven results at the box office. The uncertainty has prompted executive shake-ups, including at the Walt Disney Studios, and the prospect that at least one major studio -- NBC Universal -- will be spun off from its corporate parent.
Despite the downturn, Disney is experiencing a shortage of space to produce shows for ABC and cable outlets Disney Channel and ABC Family, as well as programming it creates for other networks. Richard Ballering, executive director of production for ABC Studios, says the network can have as many as 16 to 23 television productions underway during the height of pilot season.
With only seven soundstages on the Walt Disney Studio lot, production ends up scattered throughout the region, he said.
For example, the studio currently films its hit ABC show "Desperate Housewives" at the Universal Studios, and the comedies "Cougar Town" and "Scrubs" at the Culver Studios. Meanwhile, Hollywood Center Studios houses five Disney Channel and Disney XD shows, including "The Suite Life on Deck" and "Wizards of Waverly Place," while "Hannah Montana" is staged at Tribune Studios on Sunset Boulevard.
In addition to the sheer number of television shows produced, Ballering said, audiences are demanding more varied settings for prime-time dramas such as "Brothers & Sisters," which now occupies four of Disney's seven soundstages.
Expanding its own facilities would enable Disney to avoid paying others for studio space while relying less on expensive location shoots.
The Disney/ABC Studios at the Ranch project would more than double soundstage space with the addition of 216,000 square feet. "As a content company, we need to look to the future and plan for continued growth," Ballering said. "The Ranch provides a phenomenal and unique opportunity to leverage the advantages of co-locating indoor and outdoor production and creating a new cost-efficient model for our productions."
Beyond providing additional space, Disney's decision would allow the studio to potentially take advantage of the state's new film tax credits. The program offers a tax credit of up to 25% for television series that relocate to California, new television series produced for basic cable, movies of the week and feature films that cost less than $75 million.
Paul Audley, president of FilmL.A., said the proposed facility signals Disney's commitment to keeping production local. He said California's new film and TV production incentive also must have factored into the decision. "It's a good signal to the state of California that they need not only to continue, but to expand, their incentives," Audley said. --