Panavision plans move to Burbank

BURBANK — Panavision, a leading supplier of film and digital cameras to the motion picture and television industries, has announced plans to relocate to Burbank, merging its Woodland Hills and Hollywood locations into what executives are calling the largest rental facility serving the entertainment industry.

The announcement comes as Burbank, which historically boasts one of the county’s lowest office vacancy rates, shot from 4% in the first quarter to 17.2% in the second, according to real estate market firm Grubb & Ellis.

The jump in unoccupied real estate can be traced to the opening of multistory developments — the Pointe and 2300 Empire Center — ballooning available square footage by 800,000 to more than 1 million, city officials said.

Panavision executives last month announced the citywide search for property to house camera and crane rental operations, manufacturing, research development and corporate headquarters that together occupy 28,000 square feet in Hollywood and 160,000 square feet in Woodland Hills.

The company has not yet opened negotiations with the city, but identified Burbank as the strongest contender of all neighboring cities, mostly for its proximity to world-class studio, television and commercial customers, said Margit Elo, president of U.S. operations for Panavision.

The company, which designs, manufactures, repairs and stores high-precision camera systems, is in search of a building that would accommodate most of its non-office activity on a single floor.

Scott McGookin, Burbank’s economic development manager, would not comment on Panavision’s move, but did acknowledge the city’s business-friendly approach.

The move away from onerous business-license fees makes a great deal of sense, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

And the state-of-the-art Pointe and seven-story Empire Center gives Burbank the ability to recruit large corporations in need of space, he added.

“The city has been very accommodating to the entertainment industry in general,” Elo said.

Panavision employs 1,200 internationally and is looking to move between 250 and 300 employees into its new headquarters.

The company provided camera equipment to several leading feature and television production companies, including the movies “Transformers: Revenge of the Fallen” and “G.I. Joe.” It also supplies television shows “Desperate Housewives” and “Brothers and Sisters” at the going rate of between $10,000 to $60,000, Elo said.

But Panavision, like other moving pieces of the Hollywood puzzle, was struck by the downturn that began last year during the writers’ strike and the later standoff between major studios and the Screen Actors Guild, Kyser said.

Fewer movies have been made, regardless of their location, and advertisers have cut deeply into their budgets in response to the sluggish economy.

Panavision is a unit of MacAndrews & Forbes Holdings Inc., which does not release the company’s financial results.

“With the major studios having cut the number of feature films produced drastically, I am sure those factors weight pretty heavily in the volume of business they do,” said Don Nakamoto, labor market specialist for the Verdugo Workforce Investment Board.

The dramatic shift from film to digital as well as so-called “runaway productions” — in which studios relocate projects out of the state to take advantage of munificent tax incentives – have also dealt blows to the industry, Kyser said.

While the runaway production phenomenon has done little to slow down business, mostly because it constantly shifts equipment among locations in North America, Europe and Asia, Elo said, the dramatic shift from film to digital caught nearly every party involved off guard.

“It was a major thing in our business because it happened virtually overnight,” she said.