Santa Fe County will lend $6 million to a production company to build a film studio complex on N.M. 14 near the Penitentiary of New Mexico.
County Commissioners approved the loan unanimously Friday morning in a special meeting held in a chamber packed with local film union members.
The county will generate the $6 million for the loan through the sale of bonds backed by gross-receipts tax revenues.
Executives of Santa Fe Studios -- the entity that will use the money to build the studio -- will provide a $2 million letter of credit or escrow payment to secure the loan.
If Santa Fe Studios defaults on the loan, the International Alliance of Theatrical Stage Employees Local 480 would take over operating the studios on behalf of the county.
Though the general terms were agreed to in Friday's meeting, several specifics of the deal have yet to be finalized.
Chief among the unresolved details is the extent of financial liability the union would assume in the event Santa Fe Studios, owned by Lance Hool, 59, his brother Conrad Hool, 61 and Lance Hool's 34-year-old son Jason Hool, defaults on the loan. The company's board also includes executives from Warner Bros., SONY/Columbia Pictures and Twentieth Century Fox.
"If (Santa Fe Studios owners) default, the filmmakers union would be taking on all of the debt," said Commissioner Liz Stefancis after the vote. "That's what we intended."
But IATSE Local 480 business agent Jon Hendry had a different perception of what had been approved in the meeting.
"We're not getting into guaranteeing any private debt," Hendry said. "We never offered that and we wouldn't be prepared to do that because it would put us in a position where we would have a vested interest in (the Hools') failure and we're not going to do that."
County Attorney Stephen Ross said resolving the terms of the union's involvement is a small but important detail "because the consequences of not having enough security are serious."
Hendry said 525 of the 1,200 IATSE members in New Mexico members are based in Santa Fe County, so there is strong support for the project within the union.
The Hools have been trying for years to realize a film studio project on a 65-acre tract of land off N.M. 14 that has since been designated a media district.
Santa Fe Studios and the county agreed in June 2008 that the film production company would purchase the land and build a four-stage, $40 million eco-friendly film studio. As part of that deal, the county agreed to contribute about $3.5 million worth of water rights and infrastructure improvements to the project. The studio promised to provide 500,000 hours worth of above-minimum wage jobs in return. The studio project also is slated to receive $10 million in economic development subsidies from the state Department of Finance.
But the Hools have had some difficulty securing the balance of funding needed to meet the terms of that agreement.
The version of the project discussed Friday calls for a scaled-back $16 million start -- with reduced square footage and more flexibility regarding the type of facilities that must be produced -- with a gradual phasing in of more development over time.
All five county commissioners spoke in favor of the project Friday, lauding it as a clean industry that would provide a myriad of economic development benefits for the county.
Lance Hool said making the studio complex a reality in current economic conditions has been tough, but he has been encouraged by the strong support shown by local government and union officials.
To read the full article, click here!
