Buffalo, N.Y. (WBEN) – Buffalo Studios LLC says “cut” on its $80 million project to build a Hollywood style film/TV studio in South Buffalo. The group says Tuesday increased costs have made efforts difficult.
In a statement, Buffalo Studios says it has worked with numerous groups to make the project a reality. However, in the three years since the project was announced, they say the COVID-19 pandemic wreaked havoc on materials and building costs, and interest rates hovered at their highest level in years.
“It was kind of the unfortunate reality of just the market conditions right now,” said Buffalo Studios CEO and Buffalo native, Matthew Fleckenstein in an interview with WBEN. “About 18-20 months ago, as interest rates started to rise, investors became much more conservative with their capital, and progressively just pulled it off the table. We’ve remained with a small gap we’ve been trying to close, but it just became undeniable that we need to take a pause, take a step back, let interest rates start to drop, see how markets react, and then continue to push forward from there.”
Both factors combined have led to the project’s cost to balloon to roughly $120 million. The market conditions have severely impacted the fundraising environment, and have led to the decision to pause the endeavor to bring the studios to Buffalo.
Buffalo Studios adds the team has been left with a deficit of roughly $5 million in cash resources. That despite attempts to resolve the issue and having already raised more than $100 million.
Tim Clark, executive director of the Buffalo Niagara Film Commission, first heard about Fleckenstein’s intentions a couple of weeks ago when he called to informed him what he was up to. While Clark acknowledges it’s disappointing to see the project having to pause for now, he knows the industry will be just fine in Western New York, because of two other big soundstages in the region that are regularly booking business right now.
“We have Great Point media, which is now open. It’s up on Niagara Street and West Ferry, and they’re taking bookings for their soundstages, there’s three giant one there. And Buffalo FilmWorks in South Buffalo, who’s been doing this now for several years, they’ve got four giant stages available. As far as our inventory of soundstages go, we’re set for a while,” said Clark in an interview with WBEN. “Eventually, I think Matt would like to get this thing going again, and we’ll be here for him if that, in fact, is his path.”
Once the studio was set to be built out over 27 acres across the street from the Tesla plant, Fleckenstein says they would have likely equaled a couple-thousand production jobs, which would have also had a ripple effect outside of the entertainment industry in Western New York.
“If you have a feature film or series, you have a crew you need to feed three times a day, so there’s a huge benefit to catering companies. Obviously, hotels, gas, in order for productions to access the state tax credits, they have to put money into local banks. So there was gonna be a great ripple effect of jobs around the studio, as there has been because of Buffalo FilmWorks and what we’ll now see what’s Great Point as well,” Fleckenstein said.
It was Fleckenstein’s goal, along with his partner and co-founder Adam Parker, to make sure this project benefited the Western New York community as much as it benefited them and their investors. He also wanted to find a way for anyone aspiring to get into the film industry to not have to make the trek to major cities to jump start their careers.
“That’s why we partnered with UB to create a satellite campus on our property to create a place where anyone from any area of Buffalo, Western New York and beyond to come and learn any aspect of the industry,” Fleckenstein said. “People don’t have to do it how I did, you don’t have to pack up your life and move over 3,000 miles away from family to an expensive city. You can stay where your family is, where your support is, in a place where you can afford to live in, compared to places like [Los Angeles], New York, and learn what you want to learn and follow your passion, and work and build a life. That’s the ultimate promise of the entertainment industry in Buffalo.
“We see it becoming this multi-generational industry, and that was our ultimate goal. To really entrench the industry there, let it grow and turn it into that multi-generational industry. I’ve worked on sets out here with parents and their children on sets, and that’s something that’s very possible to happen in Buffalo and be great.”
Clark saw this Buffalo Studios venture as another arrow in the quiver, saying it could be another piece of the puzzle for the local film industry.
“When big movies, little movies, any size movies come to town, they need assets like this. Soundstages are something that is well in demand,” Clark said. “With the New York State Film Tax Credit Program being as good as it is, we know we’re going to see more-and-more-and-more production. And as I said earlier, the lucky thing for us is we have already two giant soundstages in Western New York that are ready and eager to go with production. Is it gonna affect us right away? No, and as I say, I think this is a good gradual building of assets for the region.”
So is there an ideal timeline for Fleckenstein and Buffalo Studios to set the wheels in motion once again for this massive project in South Buffalo? He says the ideal situation may come in the third or fourth financial quarter this year, but again, it will largely depend on where interest rates go and how the markets respond.
“What it will take to get our shovels in the ground and back going is an investor or investment group that’s willing to put cash into the project. We need a certain amount of cash to service our debt, but also to do things like remediation. It’s that little bit of patch that’s been elusive with investors recently,” Fleckenstein noted. “Whatever needs to change in the environment for that to happen, that’s really going to dictate our timing.”
Despite the pause in plans for Buffalo Studios at this time, Fleckenstein says his group remains committed to support the industry growing in Western New York as much as they can.
“We’re still here to help with job training, we’re helping drive productions. I proselytize about the incredible reasons to shoot in Buffalo every single day, so we want to see this project come to life. We want to continue to support the industry in Buffalo, and I remain confident there’s an incredible opportunity for Buffalo and Western New York right in the environment right now with studios and streamers to really benefit and continue to grow,” Fleckenstein said. “If anything, even though we’re pausing, I remain incredibly excited and hopeful for the entertainment industry in Buffalo.”