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Sony sells Culver Studios for $125 mil

April 8, 2004

LOS ANGELES — The historic Culver Studios, where such films as Citizen Kane and television classics such as Lassie were filmed, has been sold to a private investment group for $125 million.

Sony Pictures Entertainment, a unit of Japan's Sony Corp., has owned the 17 acres (6.8 hectares) of backlot sets and soundstages since 1991. Sony will continue to own its nearby lot, which is used by its Columbia Pictures and Sony Pictures Television divisions.

The buyers, known as Studio City Los Angeles, includes Lehman Brothers, Pacific Coast Capital partners and Pacifica Ventures, which will manage the property.

Many of the group's partners, operating under the name "Studio City New York," are trying to build a $375 million studio complex in midtown Manhattan. That project is on hold while the partners search for tenants and await approvals.

The Culver Studios were built in 1919 by Thomas Ince and have been host to such legendary filmmakers as Cecil B. DeMille and David O. Selznick. The lot was once home to RKO Pathe Studios when it was run by Joseph Kennedy and later served as home to Desilu Studios, owned by Lucille Ball and Desi Arnaz.

The lot includes a replica of George Washington's Mount Vernon mansion. A 28-acre backlot, part of which was set ablaze to recreate the burning of Atlanta in Gone With the Wind, was sold in 1968 and subdivided into homes and industrial uses.

As part of the deal announced Tuesday, Studio City Los Angeles has agreed to build a 30,000 square-foot (2,700 square-meter) expansion of an existing office building to provide space for Sony's animation and visual effects divisions.

Sony will continue to be a major tenant of the studio, which is being used for commercial production, rehearsal space for major musical acts, including Britney Spears, as well as film and television production.

"We really believe in this industry," said Lee Tomlinson, a managing director at Pacifica Ventures. "We think it's a great business."

The partners say they are not concerned about the problem of runaway production - films and TV shows being filmed in Canada and other countries where labor is cheaper.

"About 90 percent of all the stage space in the world is in Southern California," said Dana Arnold, Pacifica Ventures chief executive. "At any given time, the industry runs about 85 percent utilization. With real estate costs, it's hard to see any new production facilities being built any time soon."

Most of the major studios operate their own backlots and soundstages and often rent them to competing production companies.

Several studios, including Metro-Goldwyn-Mayer and DreamWorks, as well as most independent filmmakers, do not own their own production facilities.

The problem of runaway production for TV series has slowed in recent years, statistics show. Most of the shows filmed for the 2003 fall TV season on broadcast television were shot in the United States, according to the Center for Entertainment Industry Data and Research.

Shows taping at the Culver Studios include ABC's Life with Bonnie and Fox Television's Arrested Development. –Sapa-AP

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