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Raleigh Studios is expanding 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.

November 04, 2009|Richard Verrier

Raleigh Studios is building a new studio complex, but you won't be able to get there on the 101.

The Hollywood-based company, the largest independent studio operator in the U.S., 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, owned by commercial developers George and Mark Rosenthal, is developing the $70-million project with a consortium of Hungarian investors called the Origo Film Group. 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 exodus of movies and TV shows to other states and countries that offer generous incentives to lure production.

To keep up with the changes, Raleigh is also building a production studio in Pontiac, Mich., and operates four sound stages in Baton Rouge, La.

By contrast, Walt Disney Co. announced last week that it would build 12 sound stages in the Santa Clarita area. Disney said it wanted to centralize production of various ABC and cable shows that are 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 were mostly full.

Budapest offered several advantages, he said, citing not only the tax credits, but experienced crews, low labor costs 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 in the Czech Republic.

Now Hungary is enjoying a resurgence in interest from filmmakers, thanks to investment in new studios and a tax credit that covers up to 25% of production costs, making it one of the most generous in Europe.

Movies filmed in Hungary this year include Lionsgate's supernatural thriller "Season of the Witch," starring Nicolas Cage, and Miramax's thriller "The Debt," starring Helen Mirren.

Erzsebet Toth, chief executive 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 "super stage" that reaches 65 feet high, as well as lighting and other equipment rentals, a postproduction facility, a 15-acre backlot and a training school for film workers.

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richard.verrier@latimes.com

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