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Banking & Finance

Trust Key In Bank’s Film Studio Foray

By Jenny Callison, posted Sep 1, 2023
Southern Bank officials Paul McCombie (from left), Cape Fear market executive; Ken Sawyer, commercial banker; and Drew Covert, chairman and CEO, attend the celebration of expanding Dark Horse Studios in Wilmington. (Photo c/o Dark Horse Studios)
It’s not every day that a North Carolina-based community bank finances a film studio. But when Dark Horse Studios decided to double its soundstage capacity, it turned again to its lending partner, Southern Bank.

“It’s pure relationship; we’ve done other deals with Southern Bank over the years,” said Kirk Englebright, president and co-owner of Dark Horse. Englebright also owns two mattress companies.

The relationship stems back to the bank’s connections with Rodney Long, Englebright’s business partner (and father-in-law), who has banked with Southern’s Raleigh branch for years. He also had a long association with Ken Sawyer, a commercial lender who works out of Southern’s Rocky Mount offices. That relationship grew to include Englebright and his Wilmington enterprises, starting in 2018, a year before he and Long purchased a former beer distribution facility on Harley Road in Wilmington, thinking they would renovate it for business tenants. Southern financed the purchase.

That plan didn’t last long. Tenants weren’t especially forthcoming, and then COVID hit. One day, however, Englebright got a phone call from a Hollywood studio looking for production space.

“We realized quickly what we wanted to do with the property,” Englebright said, adding that the site had all the attributes that would adapt for a film studio: office space, flex warehouse space, industrial-grade air conditioning, tall ceilings, sturdy floors, loading docks and a large parking lot. They called Sawyer for a new round of financing.

But, of course, neither he nor Long knew what the project would involve, and Sawyer had no experience with financing such a venture. Southern Bank, with its base in Mount Olive and 60 locations in North Carolina and southeastern Virginia, was an established small business lender, but film-related lending was not in its universe.

“To my eye, this was something we had never done,” Sawyer said of his bank. “It was totally out of our wheelhouse. We didn’t know the ins and outs of film studios, so we had to travel to other ones to find out. The reason [the bank] did this is strictly because of the relationship we had with Rod and Kirk.”

Determining the specifications involved in building a studio was an education for all concerned.

“There was a lot of R and D,” Englebright said. “We made trips to other parts of the country. It’s a process.”

To date, that “process” has taken about 30 months and has given Dark Horse two soundstages, offices for film tenants, space for set construction and storage. The studio is looking at another 15 months of construction as it builds the next phase. Last month, the owners broke ground on two additional soundstages within their massive building, which will give Dark Horse a total of four. Sawyer, along with Southern’s Cape Fear Market Executive Paul McCombie and the bank’s Chairman and CEO Drew Covert, wielded shovels at the event.

“We’ve got a local crew base of 1,000 – maybe 1,200 – people, so many people have stood on the sidelines, cheering,” Englebright said. “This studio will introduce state-of-the-art technology to the area. [The new soundstages] will be complete in October 2024, and we’re starting to book productions.”

The goal, Englebright said, is to have all the stages booked solid by the time the new ones are finished. Word travels fast in the film industry, he said, adding he finds it reassuring that there is definite interest by Hollywood in bringing projects to Dark Horse once the Writers Guild and SAG-AFTRA strikes are resolved. Having hosted several productions before the strikes shut down much film activity, Dark Horse has begun to earn the trust of producers.
Englebright and Long have also earned the trust of Southern Bank; hence the ongoing financing.

“It’s 100% about relationships,” Sawyer said, “having that banker who’s available in person and over the phone.”
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