Raleigh Studios - Pontiac movie studio launches with high-profile party

So I had lots of skepticism about this actually being built, but here it is, and the new construction is substantial. 90,000 sq ft of new sound stage plus reuse of a huge existing office building.

Now I'm skeptical of its impact, its easy to find examples of failed attempts [[Unity, or the mess out in Grand Rapids). Will this be different? With Al Taubman, John Ricolta, and CAA involved it seems like the real deal. What are the feelings out there?

[[see a video at the link below)

Pontiac movie studio launches with high-profile party

http://www.theoaklandpress.com/artic...9472504386.txt

"After months of keeping its head down, Pontiac’s Raleigh Studios elevated its profile by throwing a huge party, which managed to attract political figures, financiers, union representatives, local business people and a cross section from the area’s fledgling movie industry...."

http://www.freep.com/article/2010121...cted-in-spring

I do hope it is not another Unity mess, I saw that big carnival party they had. One of the things I had heard mentioned during a interview with the state head of this program was that because there were no local organized unions for these skills not many local people are hired for the jobs. Your choice after recieving training in this field was to head west,get your union card and hope to maybe get picked up for some projects here. Do not know how accurate that is but I just see taxpayers being stuck with more bills and not too many real jobs.

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Originally Posted by muskie1

I do hope it is not another Unity mess .....but I just see taxpayers being stuck with more bills and not too many real jobs.

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Agreed. I too hope the taxpayers will not get stuck with more bills.

The financing of the project concerns me – the developers have very little “skin-in-the-game.” They are using a lot of OPM [[other people’s money) mostly taxpayer funded to pull this off.

See this article from the January 10 edition of Crain’s:
http://www.crainsdetroit.com/article/20100131/SUB01/100129812

Uses:
Developer’s Cost to build: $60.0 million

Sources:
Bond: Oakland County EDC: $28.0 million
City of Pontiac Recovery/Reinvestment: $ 3.8 million
MI Film Infrastructure Tax Credits: $11.1 million
Federal New Market Tax Credits: $15.1 million
Subtotal: $58.0 million

That leaves only $2.0 million or 3.3% “equity” in the project and nearly 97% of OPM supporting the deal.

If this deal goes south, then the State of Michigan Employees Retirement System is guaranteeing $18.0 million of the OCEDC Bond and would have to pay that out.

Remember, there is a 368,000 square foot office building attached to this project and that is a lot of space to fill. Not only do the developers have to lease out a lot of studio time they also have to lease out a lot of office space too in order for this to succeed. I am taking a wait and see approach.

Wow. If Packman 41 is correct in the numbers, then Raliegh has little to lose in this deal. Raliegh need only make one profitable movie to recoup their 2 million. Then they'll be free to skate on the development when the new governor kills the movie incentive. Good thing Oakland County can afford to blow 28 million on this nonsense.

Hmmm... This is not good - missing a large bond payment this early in the game.

http://www.detroitnews.com/article/2...xt%7CFRONTPAGE

Appears that Raleigh Studios could not make their debt service payment on time to the bond holders on the $28 million Oakland County EDC Bond.

Thankfully, the State of Michigan Employees Retirement System guaranteed $18 million of that bond. Otherwise, the bondholders would have received nothing. Now at least the bondholders will get 66.7 cents of every dollar invested.

Besides the movie studios to lease out, there is also a 368,000 square foot office building as part of the project. Can't they rent that out and get some more revenue?

What I'd like to know if billionaires like Rakolta and Taubman are involved with this, how can they miss bond payments on a private enterprise?

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Originally Posted by DetroitPlanner

What I'd like to know if billionaires like Rakolta and Taubman are involved with this, how can they miss bond payments on a private enterprise?

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because Rakolta, at least, is a bit of a con man

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Originally Posted by rb336

because Rakolta, at least, is a bit of a con man

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What? Billionaires not paying the gov't back? :D

And Taubman built malls. A type of con, if you will.

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Originally Posted by j to the jeremy

What? Billionaires not paying the gov't back? :D

And Taubman built malls. A type of con, if you will.

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A "type of con".... he's a convicted felon. No need to be delicate about it.

How many of these Michigan "movie" people and investors are kicking themselves in the dick every night over the 75% reduction is movie credits? Raleigh will be out of business before you can click your heels together! [[I'll be here all week for more movie references!)

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Originally Posted by mikeg19

How many of these Michigan "movie" people and investors are kicking themselves in the dick every night over the 75% reduction is movie credits? Raleigh will be out of business before you can click your heels together! [[I'll be here all week for more movie references!)

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Raleigh just finished filming the pre-quill of the Wizard of Oz, and star James Franco was seen around Ponti-crack[[Pontiac) this past fall.

I had the good [[mis)fortune of driving past this studio on my way to work each morning from October through December and saw colorful horses and buggy's outside many days of the week. My wife and I had a running joke that we could tell which Nag was from California, as she was quite the Deva, complete with sunglasses and a hat on her head!

Dear People of Pontiac:

" Don't be like Allen Parkers. Have your safety net ready just in case they fall."

Signed THE STREET PROPHET

Yes, you have to wonder what plan "B" was for the People of Pontiac and the $3.8 million they added to the project.

We know that plan "B" for the $28 million added by the Oakland County EDC was for the State of Michigan Employees Retirement System to make 66.7%the bond debt payments if the owner/developers could not make the payment.

And that has already happened.

On February 1 SMERS made a $420,000 payment to the bondholders and they have guaranteed to make that semi-annual payment whenever the owner does not have the money. So at least Oakland's plan "B" was to have the pension fund pay for it.

You have to wonder who at the State Pension Fund had the skill or knowledge to perform the financial analysis and due diligence to review this "investment"??

Maybe it was Mayor Burtka.

Tell me again why any governor of Michigan would squash "thinking outside the box" and put the breaks on a start-up industry that created thousands of Michigan jobs?

I thought the Republican Party was the job creation party.

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Originally Posted by Detroitej72

Tell me again why any governor of Michigan would squash "thinking outside the box" and put the breaks on a start-up industry that created thousands of Michigan jobs?

I thought the Republican Party was the job creation party.

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The reality was that these people were not being paid by the Movie Studios to work for the Studios, they were being paid by the State to work for the Studios.

Should the State provide workers for every enterprise?

How about only for friends of Mitch?