Lights go out on Alicante movie studios

Luis García Berlanga’s dream has turned into a nightmare right out of one of his own movies.

For years, the director of the classic 1953 Spanish comedy Welcome Mr Marshall! was the driving force behind the creation of a movie studio complex in Alicante – conceived of as a kind of Hollywood on the Mediterranean.

The regional government of Valencia got behind the project and put up the funds to build the Ciudad de la Luz (City of Light). It also granted subsidies to productions filmed on any of the complex’s six stages, which include one of the largest water tanks in the world – where Juan Antonio Bayona filmed his tsunami movie The Impossible.

In 2005, then-regional premier Eduardo Zaplana, of the Popular Party, opened what was destined to become “the largest audiovisual center in Europe.”

The economic crisis has left the Valencia government without the ability to fund productions any longer

But on Thursday, the European General Court confirmed that the €274 million in regional money invested in the project was illegal and needs to be returned. The court holds that building the complex and subsidizing the shoots constitutes state aid and thus represents unfair competition.

The obligation to “disinvest” means that the studios will have to be sold off to raise the funds again.

“The public financing represented an advantage that distorted the competition among the main European movie studios,” said Joaquín Almunia, the EU commissioner for competition and himself a Spaniard who served as a minister with the Spanish Socialist Party.

The court ruling ratifies a European Commission decision that ordered Spain to return the subsidies in May 2012. The appeals lodged by Spain on behalf of the Valencia regional government were dismissed.

The litigation began seven years ago when the UK’s Pinewood Studios, famous as the home of the James Bond movies, complained to Brussels about the subsidy system at Ciudad de la Luz. Other studios later added their names to the complaint.

Around 60 films, television series and programs have been shot here, including Francis Ford Coppola’s Tetro and actor Antonio Banderas’ film Summer Rain. Archive photos show Zaplana’s successor, Francisco Camps, posing for the press with French actor Gérard Depardieu, there to shoot Asterix at the Olympic Games.

The Valencia regional government earmarked around €17 million for aid to film productions at Ciudad de la Luz.

The litigation began seven years ago when the UK’s Pinewood Studios complained to Brussels

The spokesman for EU competition issues, Antoine Colombani, said that “when the state or a public authority decides to act like a private investor with an expectation of returns, there is no problem: that is not aid, it is simply an investment. But that is not the case in this situation.”

The Alicante facilities, which were designed by the US specialist Gary Bestien, have been widely praised by filmmakers. But criticism has rained down from other sources because of the sheer size of the complex, questions over its profitability, and management issues. The studios incurred losses of €84 million between 2004 and 2010.

But the Valencia government always claimed that the economic impact for Alicante and for the region was highly positive. However, the complex has remained closed since the European Commission first issued its negative report.

In any case, the economic crisis has left the Valencia government without the ability to fund productions any longer.

Valencia’s culture chief María José Català admits that the only way to raise the €274 million is to put Ciudad de la Luz up for sale. Under the transaction, the regional government essentially returns the money to itself. The opposition wonders whether selling it will raise enough to cover that amount, however.