Audio Visual Visionary

From the Crain's Chicago Business Newsroom March 13 22:26:00, 2006

By Lorene Yue

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Lee Facklis has probably attended more shareholders meetings than the typical investor.

Facklis, 45, is hardly a corporate gadfly. He is the guy behind-the-scenes running the audio, video and lighting. Corporate meetings for shareholders, managers, franchisees, you name it, are the primary customers of Show Department Inc., a company Mr. Facklis and his brother, Jeff, founded in 1983.

Now Show Development Inc. wants to get into the entertainment industry and Mr. Facklis, chief executive officer, has made a $7.5 million gamble that Chicago can become a hub for television and film production and post-production. "We know it's a lofty goal," he said.

Until recently, film and television projects were moving into Canada where it was less expensive. Thanks to financial incentives offered by Illinois Gov. Rod Blagojevich, more projects have been coming back to the state and Illinois. "The place was full of naysayers who were convinced the business had left for Canada," said Brenda Sexton, director of the Illinois Film Office. In 2003, the state saw $23 million in film and television industry revenues. By 2005, it swelled to $98 million, Ms. Sexton said. Places like Show Development Inc. and its new studio complex can only help attract more projects, said Demtra Diamantopoulus, a production manager. "There is really only one place in the city where full features can go and that stage is being used by Prison Break," Ms. Diamatopoulus said, referring to the FOX television series.

Located on Chicago's West Side, Show Development spent more than two decades renting and operating lighting, sound and video equipment to Fortune 500 companies. It also manufactures and sells folding projection screens through its Screen Works division. The company is based in Chicago, but has an office in Amsterdam to handle overseas distribution of its Screen Works products. "Our primary business is to stage [events]," Mr. Facklis said. "We do [events] all through the United States and around the world."

Show Department Inc. staged a meeting in Las Vegas for 6,000 Walgreen's managers that featured entertainment from Jessica Simpson, Shania Twain and Jerry Seinfeld. It worked on the Radiological Society of North America's annual convention at McCormick Place where Show Development Inc. built a 42-foot by 9-foot LED video wall.

Now with the debut of Resolution Digital Studios, a project three years in the making, the company can offer various sound stages, studios including a working kitchen and a 2,200-square-foot apartment set, and editing facilities. Hip-hop artist R. Kelly filmed his multi-part "Trapped in the Closet" video at the facility, which opened last year.

Resolution Digital Studios is working on a project to provide content for mobile phones and iPods, which Mr. Facklis said he was unable to discuss until after its debut sometime this month.

Mr. Facklis, who started in the audio and video industry when he was 16, knew that spending $7.5 million into building and outfitting a three-story, 32,000-square-foot complex would be a gamble. But he and his brother believed the new division would dovetail with the corporate staging side. "We've always been shoot-from-the-hip kind of guys," Mr. Facklis said. "If we see something, if it makes sense to us, we run with it. Anytime you drop this kind of money into a new business investment, we know it will take time for a return."

They also spotted opportunity. Mr. Facklis claimed Chicago's post-production companies are failing because they have failed to diversify in the entertainment industry and they lack the financial investment to sink into a production studio. Show Development, Mr. Facklis said, had the capital and experience from its years of corporate staging production work. Still, he admits there was risk involved in making a multi-million dollar investment into an area that neither he nor his brother was that familiar with. "For 23 years, we've taken a gamble and we reinvested in the company," Mr. Facklis said. "That's why we went from three people to 90 people. We are constantly tweaking our business model."