Film tax credit attracts considerable interest for studios

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Governor Phil Murphy tours Cinelease – Caven Point Studios in Jersey City, one of several production facilities that have opened as part of New Jersey’s booming production business. – OFFICE OF GOVERNOR EDWIN J. TORRES/NJ

New Jersey has had some success in its efforts to reclaim its crown — or at the very least, stage a successful reboot — as a filmmaking location, with a plethora of projects taking advantage of the tax credit program. for film and digital media.

Since the incentive was reinstated in July 2018, it has been expanded several times. According to data from the New Jersey Economic Development Authority, which administers the program, from its inception through last February, it has given out prizes to more than 60 projects worth about $263 million. And throughout 2021, returns on movie production spending in the state set a record, according to the governor’s office, exceeding $500 million.

One of the effects of this popularity among projects, which have included Oscar-winning Steven Spielberg’s ‘West Side Story’ and Netflix’s ‘The Trial of the Chicago 7’, is the need to house these productions. . In February, Kearny Point Business Center hosted its second soundstage in less than a year; Last summer, Governor Phil Murphy was on hand to cut the ribbon for the state’s largest studio, Cinelease Studios – Caven Point in Jersey City, which measures 70,000 square feet. According to the governor’s office, the location is “the first such purpose-built facility in the state.”

But probably not his last.

Handel

Keith Hanadel is the principal head of the Media & Entertainment practice at New York-based HLW, which has an office in Madison, in addition to locations in Los Angeles, London and Stamford. Although he was unable to discuss work in progress, HLW’s past projects in the Garden State include the CNBC Building in Englewood Cliffs and work for Univision. And after more than 25 years of doing such work, Hanadel said there has been a surge in the volume of inquiries in New Jersey. According to him, from “the year before COVID, all of a sudden the whole market exploded.”

This is not the first time that he has noticed a renewed interest in the region. At first, Hanadel said HLW conducted many speculative investigations for developers planning to build film and stage facilities on the east coast of New Jersey and across the Hudson in New York, but none yielded. Now, not only is the volume increasing, but Hanadel says the scale of these projects is also being increased, signaling a shift in the market.

“At one point, people wanted to tell us about renovating existing warehouses and other large-scale facilities into cinema facilities.” Now, Hanadel said, interest is growing around, well, new buildings: “Which signals to me that people are ready to invest a lot more in the market than they were before.”

“One of the big differences, I guess,” he continued, “is the tax incentive program.”

think big

The requirements for such large-scale production spaces are not so different from another state sector that is seeing record interest in the wake of the pandemic: industrial commercial real estate. First, there is the footprint. In Jersey City, Cinelease Studios – Caven Point sits on 6 acres. According to Hanadel, lately the inquiries he’s seeing are for 15-acre sites, featuring six and eight stages between 15,000 square feet and 20,000 square feet. But stages aren’t the only space to consider. There’s also the factory space, he says, where the sets are built, the stage service space — including props, storage, hair and makeup — and the production offices. “A program with six stages could be … half a million square feet quite easily,” Hanadel said. “That ideally you would have, you know, 15 or 20 acres.” Once you start thinking about putting a project like this on an 11 or 12 acre site, you have to be more creative with your design, he said.

Governor Phil Murphy cuts the ribbon at New Jersey's largest movie studio - Cinelease Studios, Caven Point in Jersey City - Aug. 6, 2021.

Governor Phil Murphy cuts the ribbon at New Jersey’s largest motion picture studio — Cinelease Studios, Caven Point in Jersey City — Aug. 6, 2021. — EDWIN J. TORRES/GOVERNOR’S OFFICE

Room to move around is also needed. “The production itself is constantly moving from stage to stage, location to location,” according to Hanadel, and these movements are “supported by a series of big, giant trucks.”

“There will be a dozen 50ft trucks needed for a production,” he said, and in the same way that these trucks provide home base accommodation when on site, they must also be hosted at the studio. .

To attract productions, the state’s diverse locations are often touted — beaches, cities and forests — and Hanadel agrees with that sentiment. “It’s a dense little place with lots of location – lots of almost fixed sets if you will.” The state’s position next to New York doesn’t hurt either. “Another reason why New Jersey has become attractive [is] proximity to New York,” Hanadel said. Not only does this provide access to above-the-line talent – ​​“stars,” so to speak – but it also provides access to a highly skilled workforce. Which is important, Hanadel said, because these “are all skilled jobs.”

When Cinelease Studios – Caven Point celebrated its opening, the studio said it expected annual productions to put 200 to 400 crew technicians to work, in addition to supporting other ancillary businesses. But those aren’t the only types of jobs to consider: “The sealed workforce in terms of building these things is also important,” Hanadel added, crediting New Jersey as the kind of place that offers access to this type of benefit.

Location is nothing if you can’t get there, reminiscent of another similarity between the state’s industrial real estate sector, with its emphasis on the last mile, and the growing interest in creation of production spaces. Ideally, a location will be attached to or near a major conduit – Interstate 95 or 295, for example – so “people who end up on the marquee” can get to and from a production facility in real time.

For your consideration

Thus, building production logistics in the Garden State requires space and access. But there are other problems and according to Hanadel, solving these problems is a group effort. Project teams, which include architects like HLW but also engineers from various disciplines (mechanical, electrical, plumbing, structural and fire protection, for example) or acousticians approach these elements in a collaborative way.

“[T]flexible consideration types [need to be taken into account], like the amount of energy – they use an enormous amount of energy,” Hanadel said of these types of properties. And they use a lot of air conditioning, he added. At 10 Basin Studios in Kearny — the soundstage that opened in February — the facility offers a fully soundproofed stage with 150 tons of soundproof HVAC and 7,200 amps of dedicated power supply, according to the governor’s office.

In Hollywood’s Golden Age studio system, you never left the lot. You showed up in the morning and everything you needed was at your fingertips. This is not necessarily the case these days, but like other industries looking to attract employees or customers, the construction of equipment in these production spaces is gaining momentum. Hanadel said he thinks competition is going to be a big driver. “Certainly, we are increasingly being asked to provide the amenities in these kinds of places.”

These include more gathering spaces, dining options, and even retail. The latter poses a bit of a problem due to the security involved in keeping productions secret until they are ready for release. “[T]This kind of thing between this public access and privacy is a complicated element,” he said. “How do you create gear that kind of helps the community, but at the same time, you know, secure? It’s a piece of design that we all work with.

On its website, the New Jersey Motion Picture & Television Commission lists seven productions currently filming in the state. According to its service directory, there are 45 studios or stages, mostly in central and north Jersey, at the moment. Earlier this month, the South Jersey Film Office Cooperative opened its doors to attract projects from further afield in Camden and Gloucester counties. Now that the plot is plotted and studios are hiring companies like HLW to come up with in-state installation plans, New Jerseyans can stay tuned to see how the Garden State reboot gamble continues. to unfold. Hanadel is optimistic.

“Frankly, I think it’s really going to be a big growth industry in New Jersey in the next two years,” he said.


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