Two studio projects in Arizona are gearing up to kick off next year now that the state has approved a $125 million incentive for film and television production.
Acacia Filmed Entertainment on Monday unveiled plans to build 14 sound stages on a 70-acre site in the Scottsdale area. The other project, Desert Studios Complex, is set to be built in Buckeye in the Southwest Valley.
Both projects have been intimately involved in designing and lobbying for the state’s new tax credit, which is intended to encourage the construction of new sound installations.
“We basically helped draft this bill so that we could help protect the ability to finance the studio,” said Matthew George, president of Acacia Filmed Entertainment. “It’s a little different from other discounts. This centers around the ability to build these studios.
The new credit will launch in 2023 with a cap of $75 million, rising to $125 million in 2025. To be eligible, productions must either film on a soundstage of at least 10,000 square feet, or – if production relies on location shoots – doing all post-production at a “qualified production facility” in the state.
But the state has relatively little filming infrastructure.
“This bill is designed to incentivize people to build these facilities,” said Randy Murray, board member of the Arizona Film and Digital Media Coalition.
Acacia plans to break ground next year, with construction expected to take around 18 months. The project will be built in phases, with the first phase comprising seven sound stages. A later phase will add more sound stages, as well as post-production facilities. The project is expected to cost at least $200 million, George said, and will be developed in partnership with the Tunica-Biloxi Tribe of Louisiana.
George is also president of Castle Rock Entertainment, the company founded and run by Rob Reiner.
He said once the project opens for business, it will be an attractive location to film – just a 70-minute flight from Los Angeles and with the conveniences of Scottsdale nearby.
“The crew will move here to make movies,” he predicted. “It’s a huge win for Arizona.”
The Desert Studios complex plans to open in the first quarter of 2023, said Nick Simonetta, the lobbyist for the project. The project will cost “several hundred million dollars”, he said. The first phase will include 16 soundstages, with the ability to expand up to 64 soundstages in later phases. The project should also include post-production facilities.
The Arizona tax incentive will provide a refundable credit worth 15-20% of a project’s costs, depending on the size of the investment. It also includes a 2.5% bonus for projects that shoot in a “qualified production facility” or do all pre- and post-production in such a facility. An additional 2.5% bonus applies to projects that sign a long-term lease with such a facility.
The law defines a “qualified” facility as a facility built for the motion picture industry, which meets industry standards and is at least 10,000 square feet.
Now that the credit has been approved, additional facilities may also be looking to compete for filming.
Murray operates First Studio – an office building, art gallery and production space – built in a former television studio in downtown Phoenix. He said it would take work to be able to compete for film shoots.
“We’re not prepared,” Murray said. “We have been left behind by the industry. It’s going to take time to prepare to be at the level we need to be.
One question is how restrictive the rules will be for post-production, given that much post-production work can be done remotely.
The Arizona Commerce Authority, a public-private partnership tasked with attracting businesses to the state, will be tasked with drafting the regulations.
“We’re writing the rules with the ACA,” George said. “We don’t want them to be too restrictive, but we also want to protect the concept of bringing studios into the state of Arizona.”