Airfares are going up yet again.
Late Tuesday, Southwest Airlines raised all of its round-trip fares by $10. Delta (DAL, Fortune 500) initiated this latest round of price increases on Monday, and as of midday Wednesday American Airlines (AMR, Fortune 500), JetBlue (JBLU) and United Airlines (UAL) had matched it.
Industry experts say the $10 increase is likely to be adopted industrywide.
If so, this would mark the seventh time this year that domestic airlines have jacked up fares.
In the past five years, no industrywide attempt to raise fares failed when Southwest was on-board.
Southwest (LUV, Fortune 500) blames the price of fuel.
"This higher fare is to offset higher fuel costs that we continue to face in the industry," said company spokeswoman Laurel Moffat.
This year is similar to 2008, when oil prices were surging and oil hit a record high of $145 a barrel. In 2008, there were 17 successful hikes.
Oil was trading at about $111 a barrel on Wednesday.
Rick Seaney, CEO of FareCompare.com, said the industry is "on pace to break that record this year," though he believes prices won’t go too high.
"In 2007, it was not unusual to have one-third of a plane empty," Seaney said. "Today to keep revenues up, planes have to be full. And to fill up those planes, you have to be price conscious. So prices can’t get too out of whack."
When airlines announce these price increases, they are doing two things: gauging consumer appetite and the willingness of competitors to follow. Airlines are only able to charge higher prices if customers are willing to pay. And, these hikes aren’t successful unless most or all competitors match the hike.
If only one airline announces a hike, it will end up on the last few pages on airline ticket comparison sites — effectively out of view for many online shoppers.
Industry experts believe that fliers will see more airfare hikes throughout the year. Seaney said it wouldn’t surprise him if we saw one a week for the next month.
And with the summer travel season right around the corner, consumers can expect even higher airline prices.
Between June 9 and Aug. 21, airlines are charging additional summer premiums. Last year was the first year that airlines started charging summer premiums.
Demand is typically higher at this time or year, so airlines are able to charge more.
U.K. manufacturing growth unexpectedly stalled in February as declining production of goods from chemicals to plastics dented the industrial recovery.
Factory output was unchanged from January, when it rose 0.9 percent, the Office for National Statistics said today in London. The median forecast of 26 economists in a Bloomberg News survey was a 0.6 percent increase. Overall industrial production unexpectedly slumped by 1.2 percent as oil output fell.
The report casts doubt on the strength of the economy’s rebound from a contraction in the fourth quarter at a time when higher raw-material costs threaten to squeeze manufacturers’ margins. The Bank of England may maintain its emergency stimulus program tomorrow to support the recovery during the government’s budget squeeze.
“We’ve been skeptical that the recovery in manufacturing can continue at the pace it has been,” said Philip Shaw, chief economist at Investec Securities in London. “It will still have a good year. This outturn probably reflects monthly volatility.”
The pound dropped more than 0.3 percent against the dollar after the report. It was down 0.1 percent on the day at $1.6274 as of 9:56 a.m. in London. The yield on the benchmark two-year government bond was down 3 basis points at 1.41 percent.
Rubber, Plastics
Out of 13 categories in manufacturing, four rose and nine declined in February from the previous month, the statistics office said. The biggest declines were in the category of other manufacturing, which includes furniture and recycling, and then chemicals and manmade fibers, and rubber and plastic products. From a year earlier, factory production rose 4.9 percent.
Smiths Group Plc (SMIN), a U.K. maker of airport scanners, said on March 23 that its business has “performed well against a tough but steadily improving economic environment cash advance no faxing.”
The drop in overall industrial output, which includes mining and quarrying and utilities, compared with the median forecast of 28 economists in a Bloomberg News survey for a 0.4 percent increase. Oil and gas extraction fell 7.8 percent on the month because of maintenance, while utilities output slipped 2.1 percent.
Manufacturing has strengthened from a year earlier in every one of the past 13 months, the statistics office said. The index of factory production held at 92.7, matching the highest since October 2008. The pound has dropped by about a fifth on a trade- weighted basis since the start of 2007, making British exports cheaper.
OECD Forecasts
The Organization for Economic Cooperation and Development said yesterday that the economic recovery among the world’s most advanced economies is gathering strength. U.K. gross-domestic- product growth will still cool to an annualized 1 percent in the second quarter from 3 percent in the first three months of the year, the Paris-based group said.
U.K. central bank officials voted 6-3 to keep interest rates on hold last month, and saw “merit in waiting” to assess the impact of rising oil prices on inflation during the fiscal squeeze. Chancellor of the Exchequer George Osborne last month stuck with a plan to eliminate the bulk of the record budget deficit by 2015.
The bank will leave its key rate at a record low of 0.5 percent tomorrow, according to all 57 economists in a Bloomberg News survey. They will also keep their bond-purchase plan at 200 billion pounds ($325 billion), according to a separate survey. The decision will be announced at noon in London.
China ordered banks to set aside more cash for the third time this year, judging that inflation remains a bigger threat to the world’s second-largest economy than Japan’s earthquake and nuclear crisis.
Reserve requirements will increase half a percentage point from March 25, the People’s Bank of China said on its website yesterday. The ratio will rise to 20 percent for the nation’s biggest banks, excluding any extra limits for individual lenders.
Premier Wen Jiabao has set taming inflation as the nation’s top economic priority this year, citing “exorbitant” house- price increases and risks to social stability. China followed India, which raised interest rates the previous day, in tightening monetary policy even after Japan’s crisis roiled global stock markets and threatened to disrupt supply chains across Asia.
The move “is another sign that the tragic events in Japan are unlikely to have a significant impact on policy decisions elsewhere in Asia,” said Brian Jackson, an emerging-markets strategist at Royal Bank of Canada in Hong Kong. “Uncomfortably strong inflation throughout the region suggests that more policy action is required.”
Crude oil pared gains and copper fell after the announcement. The move may lock up about 350 billion yuan ($53 billion), according to Australia & New Zealand Banking Group.
Reining in Credit
An interest-rate increase for China is “a couple of weeks away,” said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd. He said the reserve-ratio increase was to soak up money as central-bank bills matured short term personal loan. Shen estimated that annual inflation may accelerate to 6 percent this month, the fastest pace since July 2008.
The benchmark one-year lending rate stands at 6.06 percent after three increases since mid-October. The government is aiming to rein in credit growth after a record 17.5 trillion yuan ($2.7 trillion) of lending over 2009 and 2010.
“This is clear evidence that the tightening agenda is still alive in China and signals that when nerves have settled, we will get more interest rate hikes,” said Stephen Green, a Shanghai-based economist for Standard Chartered Plc.
Zhou Xiaochuan, the governor of the People’s Bank of China, said this month that rates will be used to curb inflation, and played down the role of currency gains, which U.S. officials have encouraged China to use as a tool.
Consumer prices rose at an annual 4.9 percent pace in February and output increased 14 percent in the first two months of 2011, according to the statistics bureau. Producer prices jumped 7.2 percent last month, the most since September 2008.
Inflation has topped the government’s 4 percent target for this year for each of the past five months.
–Zheng Lifei, with assistance from Sophie Leung. Editors: Paul Panckhurst, Stephanie Phang.
To contact Bloomberg News staff for this story: Lifei Zheng in Beijing at +86-10-6649-7560 or lzheng32@bloomberg.net
After harrowing late-night negotiations, the leaders of the 17-country eurozone thrashed out a strategy on how to deal with the debt crisis that has crippled the currency union over the past year and already pushed two of its members into multibillion euro bailouts.
The region’s bailout fund, the European Financial Stability Facility, will be able to lend the full euro440 billion that it was initially promised, European Council President Herman Van Rompuy said in the early hours of Saturday morning.
Up to now, the EFSF was only able to lend out about euro250 billion because of several buffers required to get a good credit rating _ fanning fears that it would not be big enough to save a large country like Spain.
The fund will also be allowed to buy the bonds of governments in financial difficulties on the open market, but only if the respective country is locked into a national bailout program based on strict conditions, Van Rompuy said.
That step marks an important expansion in the fund’s powers, since buying bonds can help stabilize their prices and a country’s funding costs.
The leaders also agreed to give Greece more time to repay its euro110 billion bailout, extending the maturity of its loans to seven years from just 3 1/2 years payday loans in one hour.
The country, which was the first victim of the crisis, will also have to pay less interest. Eurozone leaders decided to lower the rate by 1 percentage point, which should take it down to about an average 4.2 percent.
Ireland, the crisis’s second victim, did not get the same leniency from the heads of state and government. It will have to wait until another summit on March 24-25 for a decision on the interest rate for its euro67.5 billion bailout, currently at about 5.8 percent.
The reason for the holdout on Ireland was the country’s refusal to make concessions on its rock-bottom corporate tax rate _ long a sore point for France and Germany.
“Ireland was asked to make a gesture, but we didn’t get satisfaction. So the renegotiation of loans that Greece has was not done for Ireland,” French President Nicolas Sarkozy told journalists. “It’s difficult to ask others to help finance a plan but not concern themselves with the tax side,” Sarkozy said.
__
Greg Keller and Don Melvin contributed to this report.
China’s economy is safe from a “double-dip” slowdown in growth, a top economic planner said Tuesday, though he acknowledged challenges in keeping inflation under control and cutting back on excessive and wasteful investments.
“First of all, you can say for sure that the Chinese economy will not double dip,” Li Pumin, a spokesman for the National Development and Reform Commission, said in an online conference posted on the main government website.
Li pointed to the gradual world economic recovery and China’s own strong potential as factors supporting stable expansion after the 10.3 percent growth last year that displaced Japan as the world’s second largest economy.
China’s economy slowed only briefly during the global financial crisis, as massive government stimulus spending helped counter the impact of plunging exports. But that same spending, along with surging food prices, is now seen as a factor behind inflation that hit a 28-month high in November and remains above the government’s target of 4 percent.
After growth, Beijing’s top priority is stable prices, Li said.
Apart from ensuring adequate and efficiently distributed food supplies, the government needs to “resolutely control high and excess capacity and redundant, wasteful construction and to improve the quality and efficiency of investments,” he said.
China’s share markets have surged in recent days following reports that inflation may have eased from the near-5 percent level it has hovered at in recent months, easing worries the government may further tighten credit or hike interest rates.
But a top central bank official, cited in the newspaper China Securities Journal on Tuesday, said the issue of whether to raise interest rates would depend on various factors, including prices, consumer demand and investment and the international situation.
China will handle the issue in a “forward-looking, scientific and effective manner,” the report cited Du Jinfu, a vice governor of the People’s Bank of China as saying.
Beijing has boosted the amount of capital banks are required hold as reserves eight times since early 2010 and hiked interest rates three times since October, seeking to pull money out of circulation and cool prices.
Li, in his online remarks, said inflation figures for February, due for release Friday, would show that the government’s anti-inflation measures were working.
He reiterated the government’s determination to ensure “market stability” and keep prices in line _ an urgent concern for the leadership given China’s history of unrest linked to dissatisfaction over inflation.
There are signs some of the government’s policies aimed at chilling the overheated housing market are having the desired effect. In Shanghai, sales of existing homes fell 60 percent last month from the month before, the newspaper Shanghai Daily reported, citing data from Century 21 China Real Estate. Sales of new homes have been falling at double-digit rates for several weeks following fresh limits on home purchases and the imposition of a new tax on some housing transactions.
Average prices for the city fell to 17,737 yuan ($2,700) per square meter, the lowest level since July, the report said.
For the first time in seven years India’s government may be preparing to reduce debt sales, spurring a rally in longer-dated bonds.
Yields on 10-year bonds fell to within 27 basis points of two-year debt on Feb. 23, the least since December 2008, data compiled by Bloomberg show. Eight of 12 economists in a Bloomberg News survey predict policy makers will cut borrowings in the year starting April 1. The finance ministry may raise 4.3 trillion rupees ($94.6 billion), about 5 percent less than planned this fiscal year, CLSA Asia-Pacific Markets said.
Investors are already anticipating fewer offerings, helping drive a 0.7 percent return on rupee-denominated debt this month, the best performance in Asia after Indonesia, indexes compiled by HSBC Holdings Plc show. Finance Minister Pranab Mukherjee has room to maneuver in the federal budget on Feb. 28 because less bonds are due for repayment and phone-license sales last year may leave him with as much as 40 billion rupees of surplus cash.
“The drop in the spreads indicates that long-term growth fundamentals remain strong and the markets are less concerned about the budget deficit,” Killol Pandya, who manages the equivalent of $300 million as the Mumbai-based head of fixed income at Daiwa Mutual Fund, said in an interview yesterday.
India has run fiscal deficits every year for more than three decades. The nation’s debt obligations have risen from 28.71 billion rupees in 1981, according to earliest-available data from the central bank.
Fiscal Shortfall
The deficit shortfall in the nine months through December was 45 percent of the full-year target of 3.81 trillion rupees, official data show. In the new fiscal year, it may drop to 4.8 percent of gross domestic product from an estimated 5.2 percent in the current 12-month period, Chakravarthy Rangarajan, the prime minister’s chief economic adviser, told reporters Feb. 21.
The International Monetary Fund estimates the deficit, which includes state governments’ finances, will be the highest among the so-called BRIC economies at 8.5 percent of GDP in 2011. That compares with 3.6 percent in Russia, 1.9 percent in China and 1.2 percent in Brazil.
The yield on India’s 8.13 percent bonds due September 2022 touched 8.08 percent on Feb. 22, the lowest level since Jan. 5, on speculation demand is increasing due to the absence of new offerings. The rate on the most-traded government security was 8.14 percent yesterday, compared with 8.11 percent on Feb. 23.
Borrowing Plan
The government, which budgeted 4.57 trillion rupees in borrowings for the year ending March, scrapped one part of a 100 billion rupee sale in September. It has issued 4.27 trillion rupees of notes between April 1 and Feb. 7, according to data compiled by Bloomberg.
“The positive is there are no supplies scheduled for at least a month,” Anoop Verma, a fixed-income trader at Development Credit Bank Ltd. in Mumbai, said in an interview on Feb. 23. “That is spurring some buying.”
The difference between India’s 10-year bonds and similar- maturity U.S. Treasuries has shrunk to 467 basis points from this year’s high of 496 on Jan. 10 amid optimism growth in Asia’s third-biggest economy will push up state revenue. The government forecasts GDP will rise 8.6 percent in the current financial perdion, the most in three years.
Tax collections totaled 3.91 trillion rupees at the end of December, 73 percent of the full-year target. The government also earned 677.2 billion rupees in the form of license fees from third-generation phone licenses it sold in May, more than the budgeted 350 billion rupees.
Debt Repayments
The government needs to repay about 730 billion rupees in the coming fiscal year, compared with 1.12 trillion rupees in the 12 months ending March, according to budget documents.
“There is inherent buoyancy in the economy, which will lead to higher tax collections and lesser dependence on borrowings,” Madan Sabnavis, an economist at Mumbai-based CARE Ratings, said in an interview on Feb. 22.
The rupee has retreated 1.7 percent this year on concern an 11 percent surge in crude-oil prices in New York will raise the government’s subsidy burden. The currency dropped 0.7 percent to 45.48 per dollar yesterday, according to data compiled by Bloomberg.
The government compensates oil companies for selling cooking gas, kerosene and diesel at lower-than-market prices to shield 66 percent of the nation’s 1.2 billion people who live on less than $2 a day from spiraling prices. Subsidies account for about 10 percent of India’s budget.
‘Bearish on Borrowings’
“I am bearish on borrowings for the next year,” Shubhada Rao, chief economist at Mumbai-based Yes Bank Ltd., said in an interview on Feb. 22. “Tax revenues may not be as buoyant as they are this year and subsidies will be higher on oil prices.” She forecasts gross borrowings will be 4.9 trillion rupees in the next financial year.
The cost of protecting the debt of government-owned State Bank of India, which some investors perceive as a proxy for the nation, is little changed this month at 189 basis points, according to CMA prices.
Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
“India’s approach on deficit reduction will be gradual,” Rajeev Malik, a Singapore-based senior economist at CLSA Asia- Pacific Markets, said in an interview yesterday. “The bond market is unlikely to react negatively to the budget.”
Parasitic nematodes are pesky microscopic worms that cause about $80 billion in crop damage around the world each year and remain one of the most stubborn pests in agriculture.
But biotech giant Monsanto aims to put a dent in their impact.
On Tuesday, the Creve Coeur-based company announced it had snapped up Divergence Inc., a neighboring biotechnology company in Creve Coeur that has worked for the past dozen years on products that control crop parasites. The companies have worked together since 2004 on nematode-resistant soybeans, and in 2008 released the sequence of the soybean cyst nematode genome unsecured personal loans. Going forward, research and development will focus on a seed treatment product to prevent damage from soybean cyst nematodes.
“It’s a great fit,” said Derek Rapp, CEO of Divergence Inc. “… We’ll come together to make great things happen.”
For the biotechnology business community in the St. Louis area, the acquisition represents a major success.
Divergence Inc.
Stocks have had a great run since bottoming out nearly two years ago, and Wall Street experts anticipate 2011 to be no different.
Investment strategists and money managers expect the S&P 500 to rise 11%, on average, according to an exclusive CNNMoney survey. In fact, not one of the 32 experts surveyed by CNNMoney think the S&P 500 will decline this year.
"Everything seems to be in place for the stock market to rise," said Weeden & Co. market strategist Steven Goldman, whose 12-month target for the S&P 500 fell right in line with consensus estimates of 1,390. "We still have decent earnings growth and stimulative policies from the government that will help stocks keep up their performance."
According to the survey, corporate profits will improve 10% over the course of year, with earnings per share in the S&P 500 averaging just above $92 per share in 2011.
But that outlook might be too sunny, cautions Wells Fargo Advisors’ chief macro strategist Gary Thayer. He projects corporate earnings will only increase 6%.
"A lot of the company balance sheets up to this point have benefited from significant cost cutting, not sustained revenue growth," Thayer said. "And we don’t expect to see strong revenue growth in 2011 either."
He added that government moves like the $858 billion tax cut compromise and the Federal Reserve’s $600 billion injection will prop up the markets in the first half of the year but will lose steam during the latter half.
"If the Fed winds down its program in the middle of the year, as it has suggested, we think the second half of the year could be more volatile and challenging for the stock market," Thayer said.
His year-end target for the S&P 500 is tied for the worst at 1,300 — that’s up only 3% from where the index ended 2010.
But other experts are more optimistic, including Goldman Sachs’ David Kostin, whose forecast for a 13% rise in the S&P 500 in 2010 was exactly where the index closed out the year.
For 2011, he is predicting another 15% jump to 1,450 by the end of the year, arguing that company balance sheets have never been stronger, with more than $1 trillion in cash, and the path to earnings growth has rarely been smoother cash advance now.
The market hasn’t even caught up with the profit growth that companies have already delivered, said Riley Asset Management’s chief investment strategist Ned Riley, who’s among the most bullish of the survey respondents. He’s calling for the S&P 500 to be up 20% by the end of the year.
"Profit growth has outpaced the rise in stock prices for the year, and normally we see the reverse of that," Riley said. "That means the overall market is still cheap."
That includes hot stocks like Apple (AAPL, Fortune 500), which climbed rapidly to all-time highs over $300 a share in 2010, but is considered a better value than it was two years ago, Riley said.
Stocks should also get a nice boost from the return of retail investors, who are just beginning to pull their money out of the bond market and investing it back into stocks, Riley added.
"More people have joined the bullish bandwagon for 2011 because individual investors are ready to purchase stocks for the first time in a long time," Riley said. "Retail investors are typically late to the game because they wait for confirmation that the economy is improving."
With a forecast for modest economic growth ahead, market experts are still favoring the industrial stocks to be among the best performing sectors in 2011 — the sector already rose 25% in 2010. Strategists are also fans of energy, as commodity prices continue to soar; and technology companies, which boast some of the strongest balance sheets.
Meanwhile, the utilities sector, which is sensitive to changing interest rates, will likely be the worst-performing sector as investors anticipate rising rates. Market strategists aren’t too enthusiastic about consumer discretionary stocks either, since most Americans will hold off on avoidable expenses until the unemployment rate improves.
Vietnam’s inflation rate accelerated to the highest level in 22 months after currency devaluations stoked import costs and credit expansion spurred domestic demand.
Prices increased 11.75 percent in December from a year earlier, compared with 11.09 percent in November, according to figures released today by the General Statistics Office in Hanoi. The reading is the highest since February 2009. Prices rose 1.98 percent from November.
The government is struggling to restrain inflationary pressures stoked by economic expansion, higher food costs and a weaker currency. Moody’s Investors Service said officials have been unwilling to tighten monetary policy effectively when it cut Vietnam’s debt rating on Dec. 15, and Standard & Poor’s cited “sensitive” domestic sentiment on inflation in cutting its rating on Dec. 23.
“To get more stable prices, they are going to have to slow growth down,” Ari Kokko, a professor at Copenhagen Business School’s Center for International Business and Emerging Markets, said by telephone on Dec. 21 after visiting Vietnam last month. “Inflation in Vietnam is closely related to domestic policies and in particular to credit expansion.”
Moody’s lowered Vietnam’s long-term foreign-currency rating to B1 from Ba3, with a negative outlook, citing balance-of- payments and reserves risks as inflation quickens and the nation’s currency weakens. Standard & Poor’s cut its long-term foreign-currency rating to BB- from BB, with a negative outlook, citing a greater susceptibility of the banking system to a financial or economic shock.
Currency Woes
The government has devalued the dong three times since November last year. The currency’s depreciation is playing a “significant role” in the acceleration of inflation, according to the International Monetary Fund.
The currency’s official exchange rate was 19,498 per dollar as of 8:51 a.m. in Hanoi, compared with 19,099 before the most recent devaluation in August. On the so-called black market, the dong traded yesterday as weak as 21,110 in Ho Chi Minh City, according to a telephone information service run by the state- owned Vietnam Posts & Telecommunications Group.
The central bank raised interest rates on Nov. 5 for the first time in almost a year, a day after the government said curbing inflation was a greater priority than boosting growth.
Vietnam should aim for inflation of 3 percent to 4 percent, in line with other countries in the Association of Southeast Asian Nations, the IMF said this month.
The government forecasts economic growth of approximately 6.7 percent this year. The pace of expansion may accelerate to 7 percent in 2011, Minister of Planning & Investment Vo Hong Phuc said on Dec. 8.
–Jason Folkmanis in Berkeley, California. Editors: Sunil Jagtiani, Alan Soughley
Part of Toronto will look a lot more like New York, Chicago and London, according to plans to create residences around the cityâs waterfront film studio district.
Thatâs because Pinewood Toronto Studios, the largest movie complex in the city, wants to build homes that mimic the streetscapes of iconic North American neighbourhoods, the Star has learned.
That could include locations such as Soho in New York, Chicagoâs Loop area, and Charing Cross in London.
âThe internal streets between these buildings are designed to be used as shooting streets that could represent different cities,â says a master plan report prepared for Pinewood Studios and obtained by the Star.
The master plan is the long-awaited blueprint for how developers of the area â including the city of Toronto, which owns about 20 per cent of the site â envision the neighbourhood when it is fully built.
âOne of the challenges for film crews in a congested city like Toronto is doing location shooting, where itâs difficult to impose yourself on neighbourhoods,â Edith Myers, the president of Pinewood Studios Toronto, said in an interview.
âThese will be real residences, right by the studios that will be used for shooting.â
Building a living studio is just one of the ideas of the ambitious plan, developed with HOK Planning Group, which envisions a mixed-use neighborhood with retail stores, a hotel, condominiums and office space co-existing with eight sound stages.
The 13.5-hectare land parcel is bounded by the Don Roadway, Commissioners St., Bouchette St. and the existing shipping channel.
âRight now you can plunk soundstages in the middle of nowhere and build a studio. But to make this really work you have to have a sense of place â a true community,â said Alfredo Romano of Castlepoint Realty Partners, one of the owners.
The studio already has soundstages and offices totalling 250,000 square feet, but developers want to go much bigger, and have plans to put 2.5 million square feet on the site.
This includes:
⢠Condominiums that will include four towers and two mid-rise buildings overlooking the shipping channel with an unobstructed view of the water.
(Developers have not set prices, but expect that condominiums will sell for under $500 a square foot. The development will have room for at least 1,000 condos.)
⢠A 180-room hotel and public plaza planned for the corner of Commissioners St. and Don Roadway to create a gateway to the studio. Visiting stars could move back and forth to the studios much more quickly in a secure environment.
⢠Retail stores will be in the same area as the hotel, including cafes and restaurants leading to the waterfront promenade.
âThis is ultimately intended to be a go-ahead plan, itâs not a dream plan,â said Derek Ballantyne, the chief operating officer of Build Toronto, one of the city-owned developers. âWe feel it has a lot of merit.â
Pinewood Studios was originally known as FilmPort before it was purchased last year by Toronto Waterfront Studios Development Inc., a group of investors that included Castlepoint, Conweb Corp., ROI Capital, and BUILD Toronto, which is owned by the city.
Castlepoint is also involved in a purchase of the 5.54-hectare Home Depot site that was first reported in the Star last week.
Ballantyne said the master plan was drawn to conform to planning requirements for the development of the port lands which is to reconnect the area to the rest of the city.
Some parts of the master plan will require rezoning, but developers say they can start the project relatively quickly faxless cash advances.
Romano says he would like to see a 60,000-80,000 square foot office building built first to house businesses that supply the film industry. Retail and condos would likely follow.
The shooting street concept is not new. Pinewood Studios in the U.K. has grand plans to create an entire mini-city of shooting streets on a 105-acre site near the M25 highway. But it has run into opposition from residents who donât want development near their village.
Myers said she does not expect the same kind of problems here.
âWe conform to the cityâs waterfront vision and this will definitely add a sense of vibrancy to the area,â said Myers.
Residents of the new film district wonât be able to complain either. They will know up-front they will be living in a community that is to be used as a set. The streets are private and can be closed at any time for shooting.
âThey will have to sign convenants, so that even if they sell their home the new owners will be subject to the same requirements. It wonât be for everyone,â said Myers.
âBut when there is no shooting going on, it will be fun to walk around Chicago one day, and New York the next.â
During shooting the buildings will have access from surrounding public streets so residents will be able to access their units, while looking out their windows on the activity outside.
Toronto has played a variety of roles, from New York, to Boston to London. Most recently in Scott Pilgrim vs. The World, it played itself in a rare role. But most of the time, the city gets requests for locations that look like other North American cities.
City of Toronto film commissioner Peter Finestone says one request he gets all the time is for a location that resembles New Yorkâs Central Park.
âYou wouldnât believe how many times we get asked for that one,â said Finestone.
The long-neglected waterfront area has now appeared to reach a critical mass of development with the unveiling of the master plan and the recent development proposals.
âI think we are definitely getting to a point where you start to see things happening,â said Ballantyne.
This year Corus Entertainment opened a new headquarters with 1,100 jobs coming to the waterfront. Work is underway for a new George Brown campus near the water, and Sugar Beach, a tiny strip of beach opened near the Corus building.
In the West Don Lands, work has already started on an athleteâs village for the future Pan Am Games.
Pinewood was among the first to build on the water, however, and developers have bigger plans to involve the community with the district.
The selling feature of the studio is the large 46,000 mega stage which was supposed to attract blockbuster movies. The historic Pinewood UK studio has shot most of the James Bond and Harry Potter franchises.
But a high Canadian dollar has meant Hollywood blockbusters have been scarce. The mega stage has been used for the drama Chloe, starring Amanda Seyfried and Julianne Moore, and most recently as a stand-in for Maple Leaf Gardens for the CBCâs popular Battle Of The Blades.
Romanoâs Castlepoint Realty has been on a roll lately with the purchase of the Home Depot site and the building out of Pinewood Studios. But it did not happen overnight.
The company bought their first piece of land more than 19 years ago.
âItâs been a long and arduous process, but Iâve never felt more confident,â said Romano. Weâve reached the tipping point.â
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