Deep South Studios, an entertainment production complex proposed in 2010 for New Orleans, will become the first company to participate in a new state tax incentive designed to cultivate sustainable jobs for Louisiana’s film, digital, music and theatrical industries.
As the first Louisiana company to participate in the Qualified Entertainment Company program, Deep South Studios expects to complete the first three of its studio buildings in early 2018 for a total of 35,500 square feet of production and support space.
Deep South Studios envisions a final complex of 11 buildings spanning 262,000 square feet, with a capital investment of $63.5 million. The company’s development site is in Algiers, located on the west bank of the Mississippi River in New Orleans.
In 2016, Deep South Studios developer Scott Niemeyer, whose film productions include “Pitch Perfect,” secured a commitment from the New Orleans Industrial Development Board to exempt some property taxes on the studios project through a PILOT agreement, or payment in lieu of taxes, over the initial 10 years. Deep South Studios is finalizing tenant negotiations for the initial structures.
Louisiana pioneered modern-era film production tax incentives beginning in 2002. To grow the number of permanent Louisiana jobs, the state created Qualified Entertainment Company incentives in 2017 that reward investment in permanent quality jobs held by Louisiana residents. For jobs paying $45,000 or more annually, the QEC employer is eligible for a 15 percent payroll tax credit. That credit increases to 20 percent for new jobs paying more than $66,000 annually.
Under the performance-based program, QEC applicants may qualify for up to $1 million in payroll credits per year. By creating and maintaining a minimum of five new jobs, each QEC may be eligible for the payroll tax credit for five years, with an option to renew for five additional years. QECs must be engaged in the development or distribution of audio, visual or audio-visual entertainment products for public consumption, and be approved by the LED Secretary.
A similar incentive, the Qualified Music Company program, or QMC, is available for music-related companies.
“Our QEC and QMC incentive encourages film production, digital effects, sound recording, live performance and other entertainment employers like Deep South Studios to hire locally, to invest locally and to build a permanent entertainment industry in Louisiana that complements and builds upon our slate of revolving productions,” LED Secretary Don Pierson said.
“We are proud to pioneer the Qualified Entertainment Company program alongside LED,” Niemeyer said. “I have always envisioned the Deep South Studios infrastructure project as the poster child for LED’s efforts to build a long-term entertainment industry in Louisiana. We hope to set an example for more entertainment businesses to create lasting, quality jobs and sustainable economic growth for the creative industries here in Louisiana."