Ross Lincoln is a Deadline contributor.
Medient Studios, a Los Angeles-based production and distribution outfit with a presence in India, has announced plans to build a $90 million movie studio near Savannah, GA in a deal cleared this week by the Effingham County Industrial Development Authority. Although the deal may end up being good for Georgia, it comes during a precarious time for the Los Angeles-based entertainment economy — even with large-scale expansions underway at NBC Universal, Disney, and Paramount.
Despite an overall increase in movie, TV and commercial production, Los Angeles saw a steep drop in television drama and reality TV production in 2012, a problem the city has attempted to address at least partially by eliminating fees for pilot production. And places like New York, Louisiana, and Michigan as well as Georgia continue to pursue production business aggressively.
“Of course, we’d prefer these kinds of investments be made in the State of California instead of in Georgia,” FilmLA VP of Integrated Communications Philllip Sokoloski told Deadline. “Although the L.A. region has its own studio developments in progress, infrastructure development elsewhere can only intensify the competition we face for valuable film projects and jobs.”
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The lavish concessions awarded to Medient in exchange for launching the Savannah project illustrate market realities handily. Medient opted to build the facility in Georgia after considering offers from Pittsburgh and New York. Expected to generate as many as 1,200 full time jobs – the IDA’s memorandum calls for creation of 1,000 jobs in filmmaking and video games plus in-support services such as food service and health care. The master plan is ready for submission to the county, construction is slated to begin in June, and Medient Chairman/CEO Manu Kumaran said plans call for work on movies to begin as early as this summer, before any new buildings are constructed. The project is expected to be completed in 2015.
The $90 million figure cited in the announcement includes $10 million for land, $40 million for equipment and $40 million for buildings, according to the Savannah Morning News. The $10 million for land is the amount Effingham County IDA will actually receive over a 20-year lease, but no payment will be due for the first two years. In the third and subsequent years rent will cost about $555,555 annually. Medient will pay no property taxes or payments in lieu of taxes for the 20 years, according to Effington IDA CEO John Henry. This is in addition to $1.25 million the IDA will provide for site development and underwriting Kumaran says the company has already received from a New York investment bank to start construction. The result: Henry said average salary for the jobs will be $39,000 a year.
An LA-based company like Medient choosing to open a studio far from corporate HQ may result in lost or fewer jobs for the Southland. This is particularly worrisome when wages generated by those jobs are vastly lower than anything residents of LA County could reasonably expect for their work. Even though LA major studio ambitions dwarf Medient’s proposed studio’s jobs, the Georgia facility and others will be able to compete on individual productions looking to trim expenses.
Films produced by Medient Studios include the cult British horror film Storage 24, Indian films like Bombil And Beatrice, Mr. Singh / Mrs. Mehta and the upcoming Garp, as well as the 2012 indie film Yellow directed by Nick Cassavetes. The publicly listed company is currently valued at $0.40 per share; SEC filings from October, 2012 list the company’s total assets at $19,988,602. Compared to Paramount, NBC/Universal, Disney, and other LA studios that’s small potatoes, even if Medient plans to open what it boasts will be the largest physical studio in the US.
You can watch video below of Medient Chairman/CEO Manu Kumaran discussing plans for the project in Effingham County Georgia: