BusinessWeek.com | July 5, 2007

A Movie Studio Grows in Brooklyn

Filmmakers are flocking to Brooklyn's Steiner Studios for NYC authenticity,
competetive pricing, and state-of-the-art facilities

By STACY PERMAN

If it weren't for the painted backdrops of Midtown and downtown Manhattan, a visitor could almost mistake the sleek, modern apartment and the richly appointed law offices for the real thing. The authentic-looking sets, tucked inside Stages Two and Four at Steiner Studios, are being used to film the new F/X legal drama Damages, staring Glenn Close and Ted Danson.

Next door, on Stage Three, the largest soundstage east of Hollywood, set dressers and construction workers are hard at work preparing to film a series of Macy's (FD) commercials. In a corner of the cavernous, 27,000-square-foot stage is a replica of a brass doorman station from Manhattan's famous Dakota building. It is a leftover prop from the upcoming Chapter 27, a movie about the murder of John Lennon. Over on Stage Five, craftsmen are putting together a raised set for the new Tina Fey and Amy Poehler comedy, Baby Mama. And on the edge of the studio, workers are dismantling the hangar where the new HBO series Flight of the Chondors just wrapped.

MOVIES AS MANUFACTURING
Built from the ground up, at a cost of $128 million, at the old Brooklyn Navy Yard, the five-stage, 15-acre Steiner Studios opened for business in November, 2004. The first film to go into production there was the Mel Brooks musical comedy The Producers. Since then dozens of feature films, television programs, TV commercials, music videos, and photo shoots have been shot on the site, a former U.S. Navy shipyard that serviced war efforts starting in 1800 — it was here the USS Arizona (sunk in Pearl Harbor in 1941) was built.

By creating a movie studio with expansive soundstages and state-of-the art technology, and offering competitive prices, Steiner has lured numerous productions to Brooklyn, boosting the $5 billion-a-year New York film industry. Standing on the studios' rooftop terrace, with views of industrial cranes at the perimeter of the old Navy Yard, and behind them the Manhattan skyline and the Williamsburg Bridge, Doug Steiner, the studios' chairman, says "We see this as American manufacturing for the 21st Century."

CELLULOID SKYLINE
Together with New York City's movie incentive program Made in NY, which offers productions 15% tax credits as well as discounted rates and help on a slew of services from police protection to marketing, Steiner is credited with significantly boosting the area's film business. Since Steiner Studios launched it has brought $680 million worth of film production to New York City, projects that before Steiner appeared on the scene might very well have gone to facilities in Los Angeles, or, increasingly, Canada, Europe, and Australia. "That's a lot of business for New York," says Dan Doctoroff, the deputy mayor of economic development for New York City.

Indeed, according to the Mayor's Office of Film, Theater, and Broadcasting, the number of filming days in New York City has increased measurably since Steiner opened, from 23,321 days in 2004 to 34,718 days in 2006. And Steiner's success has also extended to existing New York-based production studios. Silver Cup Studios in nearby Long Island City, New York (where Sex and the City was filmed), recently announced an expansion of its production facilities to keep up with the increased demand for filming.

"Steiner is truly a phenomenal studio, one of the best stages I've worked with in L.A. or New York," says Todd A. Kessler, a former writer and producer on The Sopranos, who is now the co-creator and executive producer on the upcoming Manhattan-based series Damages. He says one of the biggest advantages of filming his New York-based show at Steiner is authenticity. "Firstly, making any film that is set in New York City in New York City is appropriate," he says. "And we don't have to fake New York, and dodge palm trees."

THE MAN IN THE DIRECTOR'S CHAIR
Doug Steiner — the president of Steiner Equities Group, a family-owned, New Jersey-based, commercial real estate firm that was started in 1907 — became interested in the movie production business when another developer approached him with the idea of creating a brand-new, back-lot, movie studio at the old Navy Yard. It was 1999, and then-mayor Rudy Giuliani had considered the idea, reportedly talking to Miramax (DIS) founder Harvey Weinstein, and Robert De Niro; but the project stalled, a victim of red tape and numerous delays.

Steiner says he wasn't daunted by the prospect of building a movie studio, despite the fact that a number of top-level naysayers stated it couldn't be done. For starters, the Navy had pulled out of the yard in 1966 and the area had been left largely derelict since then. And for a long time producers felt that New York was just too expensive and difficult a place to film. But where others saw problems, Steiner saw potential. "It seemed like an attractive idea," he says. And besides, "I'm an entrepreneur. Risk is part of the game." The city put up about $28 million in capital, and Steiner the remaining $100 million, to move forward.

Steiner faced numerous obstacles, starting with the need to create a new electric grid to withstand the consumption demands of a modern studio, and an upgrade of the 100-year-old sewer system. He also faced opposition from the Satmar community, a group of Hasidic Jews who have lived in neighboring Williamsburg for more than 50 years. "The grand rabbi was afraid that we were going to bring Hollywood to the neighborhood and steal their women," says Steiner. Then the terror attacks of September 11, 2001 set the project back again.

RAISING CEILINGS, AND THE ECONOMY
Before opening the studio, the novice movie mogul had his team go to Los Angeles and talk to a variety of veteran production people, asking them what elements they wanted in a studio, and had his architects integrate their suggestions. The result was five interlocked soundstages ranging in size from 16,000 to 27,000 square feet, each containing three floors that allowed dressing rooms and post-production suites to be located above the actual sets. The studio even raised the ceilings of the stages from 35 feet to 45 feet high during the filming of The Producers, based on feedback from the movie crew.

Ezra Swerdlow, the executive producer of the Disney (DIS) film Enchanted, which was budgeted for $85 million and starred Patrick Dempsey and Susan Sarandon, says that without Steiner it would have been nearly impossible to film the movie — a modern-day fairy tale set in Manhattan — in New York. "The studio provided the scale and proportion of sets that this kind of film needed," he says. "We needed three large stages at the same facility. And there was no way to really do it before Steiner. It's definitely the biggest film that Disney has shot in New York, and they would have been skeptical to film it here without a facility like Steiner."

The busy studio has also helped to lift the local economy in neighboring communities, creating work for small businesses that range from dry cleaners to locksmiths and caterers; not to mention jobs for carpenters, grips, and other crew. "We estimate that Steiner is responsible for the equivalent of 1,000 full-time jobs," says Doctoroff, of the mayor's office.

BROOKLYN DREAMS
Andrew Kimball, president of the Brooklyn Navy Yard, says that the movie studio has done more than just boost business. "There was already growth around the Navy Yard, but Steiner certainly brought a new cachet inside the industrial site, and in the surrounding communities. [He] elevated the sense that Brooklyn is hip and happening." Indeed, in the near future, the Coen brothers are slated to shoot their film Burn After Reading, starring George Clooney and Brad Pitt.

Steiner has more big plans for his studio. He has purchased the adjacent 22-acre campus, overgrown with shrubbery, that includes a Civil War-era naval hospital — the oldest such hospital in the country. Steiner hopes to renovate the landmark building, with its period staircases, into a suite of offices for filmmakers. "For instance, an East Coast satellite office for Steven Spielberg," he offers.

Also on the property are what were once the villa of the hospital's chief surgeon, nurse's cottages and a morgue. Steiner wants to transform them into writer's cottages and production offices. "This is still an evolving process," says the newly-minted movie mogul. He expects the entire facility to expand into a 60-acre moviemaking complex within 10 years. Hollywood has always been about big dreams — Steiner is turning them into reality in Brooklyn.

Perman is a staff writer for BusinessWeek.com in New York