FUTURE OF TV AND FILM PRODUCTION BUSINESS IN LOUISIANA STILL IN FLUX
With the future of Louisiana’s claim to being “Hollywood South” hanging in the balance, the developer of a movie studio in Algiers, successfully lobbied for an additional $1 million in incentives from the New Orleans Industrial Development Board (IDB) in mid-September.
The project was the brainchild of film producer and Algiers, LA native, Scott Niemeyer and has been coined “the largest film production complex between Albuquerque and Atlanta.” Niemeyer said the project needed the extra $1 million as a “gesture of support” to entice Chinese investors through the federal EB-5 program (EB-5 is a program that grants green cards for foreign companies that invest in businesses in the United States). The project’s $49.5 million in construction costs are expected to be heavily financed by EB-5 investors. The project’s total price tag has been pinned at $63.5 million.
Initially, the IDB awarded the project a property tax incentive called PILOT (Payment in Lieu of Taxes) that would allow the projects’ developers to pay a steadily increasing fraction of the project’s full property taxes over a 10-year period. This week, the IDB approved a credit on that payment for $1 million.
According to NOLA.com, the $1 million credit “would not alter its previous PILOT arrangement with Niemeyer. Approved in January of 2015, the deal allows Niemeyer’s company to pay a fraction of the studio’s property taxes over the next 10 years”. The arrangement essentially amounts to a subsidy in the area of $3 million.
Niemeyer claims that ground has been broken on the project, which received the OK to move ahead initially in December 2015 from the City Council. Once completed, Deep South Studios’ 254,000-acre “campus” will feature five sound stages, office space, two production buildings, and five more buildings for support services such as storage and lighting. The developer estimates that the project will create 1100 new jobs.
Niemeyer has admitted that he‘s been able to raise $3 million from EB-5 investors in the first 18 months since the PILOT award. Although recent changes to the state’s Motion Picture Investor Tax Credit program seem to be keeping interest tepid, it appears that the state may be making additional efforts outside of the film credit to lure filmmakers and production services to Louisiana. In addition, Governor Edwards has been vocal about his support for the film industry in his state, and has stated he will continue to make efforts for an incentive program that serves the state in the long-term.