Idle Warehouses Land Movie Role

A Woodland Hills developer has found an unusual way to make money from idle warehouses in Valencia: He rents them to Hollywood producers who have used the buildings to film everything from “A-Team” episodes to “Remington Steele.”

The arrangement brings Saunders Development Co. $1,200 to $2,000 a day for a vacant building, far more than rentals to industrial or commercial customers. The company still hopes to find traditional warehouse tenants--film deals are too irregular to count on--but show business brings in needed income in the meantime, said Howard Smuckler, Saunders’ vice president for construction.

Saunders is benefiting because studio space in Los Angeles is increasingly scarce. Studio executives say most studios are booked solid now and will continue to be, thanks to a programming boom fueled by cable television, syndication and music videos.

That’s partly why MTM Productions decided to use Saunders facilities for “Remington Steele.”

“They wanted to come here, but we didn’t have 20,000 square feet,” said Gordon Forbes, vice president of the large Hollywood Center studios in Hollywood.

34,000 Square Feet Leased

Even if Saunders finds permanent tenants for all of its Valencia buildings, it will not be out of the entertainment business altogether. It recently leased 34,000 square feet to a fledgling company, Thompson Entertainment, that plans to start an independent production studio.

The company’s president, Robert Thompson, a former executive at a small independent studio, once had much bigger plans. He hoped to build a large studio on 11 acres owned by the Newhall Land & Farming Co., also in Valencia. But Thompson was unable to raise the $1.8 million needed to buy the property, so the deal fell through.

Saunders did not invent the idea of using warehouse space for film-making. The old Ford assembly plant in Long Beach, owned by the Port of Long Beach, is used frequently, and Stephen J. Cannell Productions, which did “The A-Team” series, has leased warehouses in Culver City.

Opened 5 Buildings

In Valencia, Saunders owns buildings with a total of 400,000 square feet, of which about 30% is vacant. All of the filming has been at two developments at Avenue Crocker and Rye Canyon Road, where the firm has five buildings that opened several months ago in developments known as Valencia Business Center and Valencia Technology Center.

Saunders might normally rent space in its mixed-use Valencia buildings for 50 to 55 cents per square foot per month, excluding taxes, maintenance and utilities. That comes to about $600 a day for 34,000 square feet, the amount Saunders often rents to producers.

The $2,000 that a production company might pay Saunders is still a savings over charges at a conventional independent studio, said Gary Degalla, who was location manager for “The A-Team,” which is no longer in production.

Labor, Equipment Savings

Degalla said costs at such studios, which start at perhaps $1,500, can quickly escalate to $10,000, because most studio owners insist that their own workers and equipment be used. Degalla said it is usually far cheaper to bring your own, adding that the studios even mark up electricity.

He said that by doing about 20 days of shooting at Saunders warehouses, he was able to save a minimum of $50,000 to $100,000.

Another key advantage of the Saunders buildings is their location within 30 miles of the corner of Beverly and La Cienega boulevards. Outside that zone, union sound, camera and other workers must be bused to the site and paid for travel time.

Although the Hollywood area might be more convenient for many productions, the Saunders site offers proximity to the Indian Dunes section of the Newhall Ranch, perhaps the busiest back lot for outdoor shooting in metropolitan Los Angeles.

No Electricity

The warehouses have drawbacks. They are not well insulated against outside noises, and there is no electricity, so producers must bring their own generators.

Smuckler said his firm got into the studio business by chance when he was approached on a Valencia construction site by a location manager for a movie crew who wanted to film a construction scene.

That was in mid-July for a movie called “Eye of the Tiger,” he said. Soon word got around that Saunders had space available and was glad to rent to production companies. Other movies and shows followed, so that by now Saunders has rented space for at least 130 days of filming, Smuckler said.

Thompson said he plans to divide his leased space in two--one 100 feet square and the other 100 by 140. He said the smaller area, at 10,000 square feet, is the standard size for television production, and that the larger area, at 14,000 square feet, is a size often used by movie makers. Thompson estimated that it will cost $250,000 to finish the interiors. That includes sound insulation, dressing rooms, wiring and phone lines.

Informed sources said Thompson rented his space from Saunders for three years for about $200,000 a year, minus some free rent during the first year. The deal includes an option for Thompson to extend the lease for five years.