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Film Production industry comes into focus
By John W. Ellis IV
East Bay Business Times, (December 17, 2004)

Entertainment production is growing steadily and attracting business. Experts expect more than $125 million in production revenue in the next 12 months. Up until a decade ago, San Francisco let the Bay Area in production business, but the tech boom created rents that priced out longtime film industry tenants. Film Studios, TV commercial producers, music video stars and video game producers now regularly chose to do business in the East Bay. Oakland is becoming a production nexus.

“Production as a whole in the Bay Area has decreased over the last five years, particularly in San Francisco. The whole industry has been in a drought during that time, but in the East Bay Area, the industry is booming now,” says Sean House, owner of Outhouse Productions.

The Oakland Film Office opened an incubator space on the former U.S. Army base near the Bay Bridge for film production-related businesses. The center has attracted businesses from around the Bay Area, including Outhouse Productions, which had been based in Petaluma.

“This office was dormant for a while before I was hired, so there wasn’t a lot of business before 1998,” says Ami Zins, director of the Oakland Film Office. “We became so customer service oriented, we got really busy. We worked hard on answering every request that came to our office. We take the view that we want to try to accommodate every shoot – whether it is a film for a major studio or a student production.”

Zins says her office and the city of Oakland have made it easier for entertainment producers to work in the city. The film office uses a sliding scale for permit fees, issues permits to shoot in public parks and works closely with schools, businesses and other city offices.

The Film Office tracks business by the number of days filming takes place in public. The figure does not include days spent for preparation or cleanup, but it gives an indication of increasing businesses.

The office issued permits for 89 days in 1998, 96 in 1999, 156 in 200, 173 in 2001, 158 in 2002, 180 in 2003 and an estimated 190 in 2004. Zins attributes the 2002 decrease to the impact of the Sept. 11, 2001 terrorist attacks.

Oakland productions include commercials for Macy’, Cheverolet, Mercedes-Benz and Microsoft Corporation, music videos for E-40, Santana and Metallica, photography for Nissan, Sports Illustrated and “Six Feet Under” and filming for “The Candidate”, “True Crime” and “Matrix II, III”.

Successful Partnerships

Partnerships are key to getting and keeping businesses in the East Bay. When shopping for a city to produce the upcoming 20th Century Fox/Fox Searchlight movie “Bee Season”, the International Brotherhood of Teamsters Local 70 and the International Association of Theatrical and State Employees worked with Zins to stay within the film’s budget.

“Bee Season” executive producer Peggy Rajski was so pleased with the Teamsters, she wrote to thank them for their customer service, knowledge and hard work.

Rajski’s letter noted that the production’s direct expenditures in the Bay Area, not including fees for stars, directors and producers, totaled more than $6 million and that she looked forward to working here again. Fox Searchlight also agreed to have the movie premier at Oakland’s Paramount Theater and to donate proceeds to an Oakland youth organization.

“Our community – the city government, businesses, even residents – have been supportive, even enthusiastic, about working with productions,” Zins says. “People are just finding out about the diversity of neighborhoods, terrains, parks and buildings. The city is affordable, centrally located but not congested and diverse.”

Businesses not directly related to entertainment production benefit.

The Chabot Space and Science Center makes extra money by renting to entertainment and corporate productions, according to director of sales and marketing Mary Miller and has several clients that use the facility to shoot corporate videos. Sutter Health and Dell Inc. shot television ads there, and PBS documentary miniseries “Origins” used the observatory for several interview sequences.

“Because we are a nonprofit, we need to find new ways to generate revenue”, Miller says. “Facilities rental for production shooting was 10 percent of our business for the first 11 months of 2004.”

Mike Hampen, property manager for PM Realty Group, works with the Alameda Reuse and Redevelopment Authority to manage several hangars at Alameda Point, a formal U.S. Naval air station.

Hampen points to the cyclical and unpredictable nature of production business for a company that doesn’t directly serve the industry. Three of the eight hangars were used as sound stages in the past, but business has dipped enough that only one is reserved for that purpose. The others are rented to business tenants.

“In our heyday, we used to average two feature films a year and commercials in between,” Hampen says. The hangars were used as sound stages for two “Matrix” movies, “What Dreams May Come,” “The Assassination if Richard Nixon”, “Bee Season”” others. The independent film “The Darwin Awards” is currently using the facility.

“Now we get a small film and few commercials,” he says. “Productions used to be up to 10 percent of our business, but it’s now around 1 percent of annual revenue. But this is not our primary business. We see it as gravy.”

Multiplier effect

Entertainment industry dollars are important to the economy because they can benefit virtually any type of business and the money circulates well, says House, who is a leader of the Oakland Film Center community.

“A movie company is a floating factory. They set up shop and dump money into an economy,” House says. “When an actor or director spends money at a restaurant, the waiter spends it on something and that dollar keeps going.”

Of the more than 1800 production-related businesses in Northern California, more than 90 percent are in the Bay Area, House says. He expects the production industry to earn $125 million between September 2004 and September 2005, based on schedule projects. The economic multiplier for the industry is at least 4.2 and as high as 11, according to House.

“I just worked on a Jaguar commercial last week that dropped a million dollars in one week’” says House, who has worked on the two “Matrix” film , Cheaper by the Dozen” and “Bee Season”.

Bob Cantor, president and CEO Chamber of Commerce, says hotels, retail stores and restaurants benefit from Pixar Animation Studios.

“The 700 people who work at Pixar every day are a huge contributor to the local economy,” he says.

Tim Ranahan, owner of Ranahan Production Services Inc., who provides trucks that double as camera darkrooms, art departments and production facilities, also handles communications rentals for production crews. He subcontracts to car rental and communication companies.

“The East Bay is experiencing a big boost in business,” Ranahan says. “What we lack, though, is a TV show. When there is a TV show shooting in the Bay Area, it is a huge shot in the arm for everyone.”

Friendly competition

The eight film offices in the Bay Area work together to attract productions, says Jim Reikowsky, liaison with the Vallejo-Solano County Film Office.

“We have lunch meetings and sometimes will do a joint advertising project to get a film,” Reikowsky says. “Each year we rent a joint booth space at the annual (Association of Film Commissions International) Locations Trade Show in April. We know that whatever business comes to one city in the Bay Area spills over to the others.”

Industry experts say that even stars are requiring East Bay locations as a condition for working on a film. Marin County native Sean Penn made an East Bay shoot a condition for his participation in “The Assassination of Richard Nixon.”

“We’re seeing a lot of support from the community at large, so we can now compete with Los Angeles and even other countries,” House says. “The East Bay is the future of Bay Area production."

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