Starlight Studios, a sprawling 35-acre movie-studio campus in New Orleans East, unveiled two buildings Monday, among the largest brick-and-mortar investments into a Louisiana film industry that has struggled in recent years.
The two buildings in the project’s first phase were erected at a cost of $12.5 million. The full project, if realized, would feature four sound stages and an office building and cost $28 million.
“We are on a real, functioning, in-commerce studio campus that answers the industry’s call, meets the industry’s needs and sets a deepening foundation for the industry’s growth and stability here in Louisiana,” said Billy Burk, Starlight Studios’ president.
The project has been in the works for almost a decade, long before state lawmakers in 2015 capped a lucrative tax break that had lured hundreds of motion picture crews to Louisiana since it began in 2002.
Under the program, the state reimburses movie and television producers for 30 percent of their local costs incurred while filming in Louisiana.
The new project was not built in time to take advantage of an even more generous incentive that covered 40 percent of spending on movie-related infrastructure; that program has been phased out.
A $180 million annual cap for the film production program, approved amid a statewide budget crisis, sparked a sharp downturn in a then-flourishing state industry, as major movie projects abandoned Louisiana for cap-free Georgia, the industry’s California base and Canada, where the decline of the Canadian dollar has made production cheaper.
In a change that was backed by film-industry advocates, the Legislature attempted this year to solve at least one problem caused by the 2015 rewrite. While the 2015 law capped the amount of money the state could pay out in redeemed tax credits at $180 million per year, it did not limit the amount of tax credit certificates the state could award each year, causing a backlog of producers trying to claim their credits.
The new legislation, which has been sent to the governor’s desk, limits the amount of new tax certificates to $180 million per year initially and to $150 million per year after three years, bringing some certainty to the process.
Starlight and other recently built local movie studios do not directly benefit from the tax credits. But studios across Louisiana were hurt badly by the 2015 changes, as major producers, scared off by the restriction, took their business elsewhere.
Still, Burk has pressed on, and he secured financial commitments for his ambitious movie studio from Investar Bank, First National Bankers Bank and other private investors.
The first phase of his project is also being financed through a “payment in lieu of taxes” arrangement from New Orleans’ Industrial Development Board.
That payout is based on the current tax rate and the assessed value of the property, and will increase each year over a 10-year period, until 2024.
The project’s second phase is still in the planning stages and has not secured financing.
Starlight representatives and local officials said Monday they believe the Legislature’s recent actions will help bring stability to the industry, which has come under fire because numerous analyses have shown the state does not come close to recouping its investment.
“There’s (now) a guarantee and a certainty as to when production gets paid, and you can base decisions on more of a long-term prognosis, as opposed to a what-if prognosis,” said Kevin Murphy, Starlight’s chief operating officer.
State Rep. Ray Garofalo, R-Chalmette, said that while this year's legislation was a good first step, Louisiana must still work harder to woo back the production it has lost.
“When I hear stories about governors from other states going to Los Angeles and talking to NBC and Lionsgate and Disney and saying, ‘We will never do to you what the state of Louisiana has done to you,’ that just gets me fired up,” he said.
Louisiana officials should reach out more to those companies and should ensure that its technical colleges are turning out the graduates the industry needs to flourish, he added.
The new campus' largest sound stage is already leased through the end of the year, Burk said. The four-story, 31,000-square-foot Stage 1 is being used by a television show.
That and a second stage bring the facility's total current capacity to 44,000 square feet.
The campus is expected to host at least 200 workers when it is fully utilized, officials said.