Saturday, July 26, 2008

Producer Outlines Financing Plans

By Rosalie Rayburn
Journal Staff Writer
      Hollywood producer Steve Perry's financing plans for a proposed Rio Rancho movie studio reflect the ambitious schedule he pitched to city councilors recently.
    A financial projection Perry submitted to the city last week says his company, Masque Entertainment Group, will sell $150 million worth of industrial revenue bonds to build and operate a movie studio business capable of producing six to eight films annually. Perry has said he hopes to break ground on the studio complex by late September.
    Perry presented his concept to city councilors at a July 9 meeting where they approved a resolution allowing the city to issue the industrial revenue bonds.
    Masque's financial projection says the company will use $58 million of the bond amount for land purchase, construction, equipment and start-up costs. The rest initially will be invested with Extensor Capital, a hedge fund management group, to generate revenue for its movie production activities, the document says.
    Industrial revenue bonds are a way for local governments to encourage companies to locate in their area. The city issues the bonds and they are repaid by the company, which also gets a break on its property taxes for the duration of bond payment period.
    City financial director Dick Kristof said the bonds will not obligate the city in any way. He said Masque will still have to pay its share of school taxes.
    Perry is the principal of Los Angeles-based Masque. His movie career stretches back more than 30 years, covering stints as an assistant director, unit production manager and executive producer.
    His proposal for Rio Rancho will include a movie studio with sound stages, production and post production services that will be available to filmmakers on a rental basis.
    Masque also plans to produce at least one film per year itself. It will sell its films to distribution companies for theater and home video viewing.
    The studio will be built on a 35-acre industrial-zoned site north of the New Mexico National Guard Armory, near U.S. 550. Perry has said he is negotiating to purchase the land from AMREP Southwest. Perry has said the complex would consist of several buildings ranging from 130,000 to 200,000 square feet plus a 600-slot parking garage.
    Masque expects the complex to be partially operational and generating revenue within about two years and at nearly full capacity within three years.
    Owning the production studio will enable Masque to shorten the time it takes to make a film and save millions on production costs.
    "Management (Masque) believes it can deliver films at a cost approximately 40 percent lower than traditional producers," the document says.
    An onsite restaurant where film crews can purchase meals will provide another source of revenue for Masque.
    Masque expects initially to earn income from its investment with Extensor Capital, which "specializes in certain fixed income securities and bond arbitrage" that generate high returns. Masque anticipates the investment will earn an annual return of 25 percent.
    Extensor Capital's Web site says the company specializes in debt and equity corporate finance for projects worldwide.
    It works with a range of industries, including, energy, transportation, communication, health care and film/entertainment.
    The Web site says Extensor finances firms at all stages of corporate development.
   

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