Developer seeks Bee Cave studio complex

Will city roll out red carpet for $150M build?

In a few years, Bee Cave residents may recognize their local streets in prime-time television shows, movies and more.

On Oct. 8, developer Christopher Milam, president of International Development Management, pitched the construction of Supernature Studios, a film and television production campus, to Bee Cave City Council. He cited the tax incentives offered to filmmakers and producers in Texas, quality of life in the Austin area and availability of local crews as reasons for the prospective build.

"Austin is the place where creative people want to be," Milam said to council members. "This studio is intended for major

Hollywood productions."

He said Bee Cave streets could provide the small-town feeling desired by some shows and films. The Bee Cave Parkway property targeted for the build borders Balcones Canyonland Preserve, a backdrop that may pull more projects to the area, he said.

Proposed fall 2015 opening

The production complex could be housed on a 25-acre tract comprising four smaller properties, the largest of which is owned by Rod-Ave Inc., a real estate company owned by producers Robert Rodriguez and Elizabeth Avellan. The property was originally planned for Rodriguez's production company, Troublemaker Studios, which he opted to build at the Mueller development instead.

Milam said the four properties slated for the project are under contract with his company and must be closed by March 31, 2014.

He said he hopes to finish the permitting process for the fully financed project by the end of the year, start construction in spring 2014 and begin operating in 2015.

Tax incentives

Milam said both California's elimination and Texas' adoption of tax incentives entice producers to move to the Lone Star State, and Supernature Studios would be one of the largest studio complexes outside of Los Angeles.

"We've always got something coming in, but there's a lot of gap, too," said Spiderwood Studios' owner Tommy Warren, who admits that profits have remained stagnant for the past four years. "It's never a steady flow."

He said production incentives are the bottom line, with some business going to other states offering better incentives.

The Texas Film Commission's website lists tax incentives ranging from 5 percent to 22.5 percent of eligible budgets for film and television projects; however, 70 percent of paid employees on the project must be Texas residents.

Local studio, office space

Milam said he is in the final stages of contract negotiations with Los Angeles' Manhattan Beach Studios to manage and book studio space, and CBRE is scheduled to lease office space.

"The change in the business today is toward independent studios like this, not the big, old-school MGM, Paramount," Milam said. "When a producer goes to do a movie, he just contracts with the studio for the period of time he needs it and doesn't have to carry [expenses] when not producing a movie."

Milam said he is confident about building the complex without having the units pre-leased.

"The office market in Austin is growing very rapidly," he said. "For the studios, it's more of a niche business. There are network television and Hollywood film productions in Austin warehouses because there's no space."

Josh Havens, deputy press secretary for Gov. Rick Perry, said that during the past three years, more than 17,000 production jobs have been created, and at least 67 productions were shot in Central Texas, up from 43 three years prior.

"Production stages [of Supernature Studios' size] would be a welcome addition to Austin," said Rebecca Campbell, Austin Studios executive director. "They would support a virtuous cycle of increased business and infrastructure."

Smaller, boutique-type studios like Austin's Hack Studios are also sprouting up to accommodate an expanding local film and television business, owner Dianna Colton said.

"As quickly as the [production] industry is growing, I don't think the need is surpassing what's available," Colton said.

Peli Studio in northwest Austin has amassed a number of clients in Los Angeles and New York due in part to lower rental prices in Austin, said Jon Merrifield, owner of the 2-year-old company.

"[Post-production] work can be done remotely, and office space, although high for Texas, is a fraction of what it would be in L.A. or New York," Merrifield said. "The film market here is budding."

Benefits and concerns

Milam said he estimates the complex would provide 2,000 jobs and employ 200 people per soundstage project, but the soundstages may not be full year-round like office buildings.

"We don't have any retail in the project, so we don't directly produce sales tax," Milam said. "But all of those people will eat lunch and buy things [to] significantly impact sales tax."

Milam also said he plans to donate the complex's outdoor street sets for public use, help with traffic concerns and add a landscaped median to Bee Cave Parkway.

"The issue is it's a lot of people and a lot of square footage and will have a traffic impact," Councilman Steve Braasch said. "We need to think through the traffic side of it, but it will bring jobs [and] prosperity out here."

Milam said traffic to and from the studios may be at off-hours because of the industry's production schedules.

Residents echoed Braasch's traffic concerns and questioned the aesthetics of soundstages' boxy shapes, light pollution, high impervious cover and transient nature of movie staffers.

Councilman Bill Goodwin said he was concerned about production moving out of the state to another area with better tax incentives and the complex being abandoned.

Zoning changes

The land is zoned for retail and although the city has a movie studio zoning category, the proposal requires a conditional use permit, Councilwoman Zelda Auslander said.

"If we can agree to terms and mitigate the impact on our community where the positives exceed the negatives, I envision a planned development agreement outlining the contractual details," Auslander said.

Moving forward after Vegas project

International Development Management President Christopher Milam, said he is awaiting judgment on a lawsuit filed May 15 by his venture, Silver State LLC, regarding a real estate project in the Las Vegas suburb of Henderson.

"[We] invested in land in Nevada at the bottom of the market," Milam said. "We figured eventually it would recover, and it did. It put us at a real competitive advantage and made other people, locals in Las Vegas, unhappy."

Silver State's complaint alleges that on June 12, 2012, it was awarded a $10.5 million contract to buy a 480-acre tract located in Henderson to be developed into a mixed-use project including professional sports venues.

Milam said Silver State paid for the land in full Nov. 28 but terminated the agreement to develop the property.

According to Silver State's complaint, the city sued Silver State alleging fraud, but the suit was dismissed March 5.

However, Bud Cranor, Henderson's director of communications, said he recalls a different set of facts.

"The Henderson City Council was presented with a proposal [by Milam] for the development of arenas," Cranor said. "[Milam] pitched a sports venue."

He said Milam told city officials after making a final payment for the land that the arenas were no longer viable. Henderson sued to stop the transfer of the property to Silver State, alleging the buyers acted fraudulently regarding the development proposal.

"There was a settlement, and the case was not dismissed," Cranor said. "The city was paid $4.5 million as settlement. A significant component [of the settlement] was that Mr. Milam was not allowed to do business in the city."

Milam said he will hire another developer for the property.

In its lawsuit, Silver State has requested the court order the sale of the original land tract to Silver State.



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