On Location: Hollywood's Raleigh Studios plants flag in Budapest
The Hollywood-based company, the largest independent studio operator in the United States, runs studios in Hollywood, Manhattan Beach and Louisiana, and now is expanding in a big way into Eastern Europe.
The company is set to open nine sound stages totaling 180,907 square feet on the outskirts of Budapest, Hungary, this spring to take advantage of the country's low-cost labor and film tax credits.
Raleigh, which is owned by commercial developers George and Mark Rosenthal (whose assets include the Sunset Marquis Hotel in Hollywood), is developing the $70-million project with a consortium of Hungarian investors and businessmen called the Origo Film Group. Scheduled to open in April, the complex would be the most ambitious project to date for Raleigh, which already owns or manages nearly 40 stages.
"This is going to be the finest studio on the continent," said Michael Moore, president of Raleigh Studios. "It will be truly run like a Hollywood studio."
Raleigh still maintains significant operations in Los Angeles. The company owns 12 sound stages in Hollywood and manages 14 sound stages in Manhattan Beach, where Marvel Studios has signed a long-term lease to shoot its "Iron Man" films. Nonetheless, the Hungary project underscores how Southern California remains vulnerable to the continued outflow of movies and TV shows to other states and countries that offer more generous incentives to filmmakers than are available in California.
That has forced companies such as Raleigh to go where their customers are going: outside of California. Raleigh also is building a production studio in Pontiac, Mich., and operates four sound stages in Baton Rouge, La., to capitalize on the rapid film production growth in those states.
By contrast, the Walt Disney Co. announced last week that it would build 12 sound stages at its Golden Oak ranch in the Santa Clarita area. Although many local sound stages have struggled from the falloff in local film and TV production, Disney said it wanted to centralize production of various ABC and cable shows that are currently scattered throughout the region.
"From a supply-and-demand standpoint, it wouldn't make sense for us to add sound stages in Los Angeles,'' said Moore, although he said Raleigh's facilities here are mostly full.
Budapest offered several advantages, he said, citing not only the tax credits, but experienced crews, low costs of filming compared to elsewhere in Europe and the city's diverse architecture, which can double for London, Berlin or Paris.
Although Hungary has a long filmmaking tradition, for many years Hollywood gravitated to other Eastern European locations, primarily Prague, Czech Republic. Now Hungary is enjoying a resurgence in interest from filmmakers, thanks to investment in new studios and a a tax credit that covers up to 25% of production costs, making it one of the most generous in Europe. The credit was introduced in 2004 and expanded last year.
Movies filmed in Hungary this year include Lionsgate's supernatural thriller "Season of the Witch," starring Nicolas Cage; Miramax's thriller "The Debt," starring Helen Mirren; and Focus Features' Roman drama "The Eagle of the Ninth."
Film tax incentive programs in Europe, Canada and the U.S. have become more attractive to studios as they look to reduce filming costs in the face of declining DVD sales and other economic challenges.
Erzsebet Toth, CEO of the Hungarian Film Commission, said the Raleigh complex would be a "great and welcome addition to the slate of sound stages already in business'' within 20 miles of Budapest,
including the Korda Film Studio, which hosted Universal Pictures' 2008 film "Hellboy II: The Golden Army."
Raleigh Studios Budapest will include a 45,000-square-foot "superstage" that reaches 65 feet high, as well as lighting and other equipment rentals, a post-production facility, 15-acre backlot for outdoor sets and training school for film workers. The studio will be fully integrated with Raleigh's operations in Hollywood.
Moore said he expects the facility will have a high occupancy rate and has several projects lined up, but he declined to identify them.
"We're very confident judging by the level of interest and activity we've seen so far,'' he said.
Photo: Architectural drawing of Raleigh Studios Budapest. Credit: Raleigh Studios.