Murphy announces $125M film and TV studio in Newark, as industry expands in NJ

More than a century after its birth in North Jersey, the film industry is in the midst of a Garden State resurgence.

Gov. Phil Murphy and local officials were in Newark Tuesday to announce the latest project: a $125 million film and television studio to be built over the next two years at the site of a former public housing project in the South Ward.

The facility, to be anchored by Lionsgate Studio, is expected to create more than 600 jobs for the region, with a priority given to Newark residents, as well as internships and educational opportunities to be overseen by the New Jersey Performing Arts Center, state officials said.

"One of my administration’s priorities has been to enhance New Jersey’s film industry and create new revenue streams for our state,” Murphy said in a statement released Tuesday. “With the addition of the Lionsgate Newark Studio, New Jersey will cement its position as a hub for television and film production."

Set to open in 2024, the 300,000-square-foot facility will be a joint project by Lionsgate, the arts center and Great Points Studio, a studio management business that will own the site. The property has sat unoccupied since 2015, when the Seth Boyden Housing project was abandoned. The buildings were demolished in February.

Located 2 miles from Newark Airport, the studio will offer six soundstages and production services including prop and set building, restaurants and catering, the state said.

Great Point CEO Robert Halmi said the site will accommodate up to three separate productions at once; in a best-case scenario, each would employ upward of 400 staff, he said.

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Real estate services firm JLL estimated that the studio and its jobs would spur more than $800 million in economic activity for the area, while ancillary businesses serving the operation would generate $180 million more in state tax revenues over the next two decades, according to The New York Times, which first reported the project.

Lionsgate will be the studio's main tenant. The California-based company owns the "Hunger Games," "Twilight," and "John Wick" franchises and is also the creator of prestige fare like "La La Land," "Mad Men" and "Orange is the New Black." It bought the Starz cable network in 2016.

The state's burgeoning film industry has tapped into lucrative tax breaks enacted by the Murphy administration in 2018. Halmi, the Great Point CEO, declined to say how much the Newark project would benefit from the program, but he said it would have been impossible without the state's help.

"Without incentives, there is no film [industry]; it just doesn't happen," he said.

New Jersey has awarded almost $264 million to production companies since then, seeking to lure business to the state, according to the state’s Economic Development Authority.

The program has had some success. Productions including Steven Spielberg's “West Side Story” and the Academy Award-winning “Joker” received multimillion-dollar awards. "West Side Story" shot scenes in Paterson and "Joker" in Newark.

In East Rutherford, the former Meadowlands arena has been used as production space by NBCUniversal, while film and TV companies have repurposed parts of the old military base at Kearny Point in Jersey City. The state has offered bigger tax breaks to entice producers into South Jersey towns as well, touting New Jersey's diversity of urban, rural and scenic backdrops.

Benefits questioned

Critics of the tax incentives have been skeptical of the touted benefits.

In a 2019 report, the Sol Price School of Public Policy at the University of Southern California looked at programs in New York, Louisiana, Georgia, Connecticut and Massachusetts and concluded that “incentives paid by states to the entertainment industry are not generating the jobs and economic growth as intended.”

Michael Thorn, one of the report's authors, said Tuesday that the Newark project didn't change the overall assessment. "Will the film industry's activities generate enough in benefits to justify the costs of the tax break? Based on peer-reviewed studies and state government assessments nationwide, the answer is 'no way,'" he said via email.

Murphy acknowledged any particular production may have a short-lived economic benefit. But he credited the tax breaks for "setting the stage for an announcement like this."

"It’s an anchor to a much bigger transformation,” he said in Newark. “We are actively restoring our historic place as a world-class location” for movie production.

New Jersey is no stranger to cinematic prominence. More than a century ago, Fort Lee established itself as a center for the country's nascent film industry and a predecessor to Hollywood.

“New Jersey was originally the home of the film and TV business, but certainly California took that advantage,” Tim Sullivan, head of the Economic Development Authority, said at a February board meeting. But Murphy has pursued an "economic diversification strategy to grow basically a brand-new industry.”

Under an expansion the governor approved in January, film studios can qualify for tax breaks if they stay in the area for at least 10 years.

Sullivan said projects typically get compensated for 30% of their expenses under the state program. They can also qualify for other bonuses, including incentives based on the diversity of their hires.

Film and television productions spent more than $500 million in New Jersey last year, said Steven Gorelick, executive director of the New Jersey Motion Picture and Television Commission, which assists those looking to shoot in the Garden State.

This article originally appeared on NorthJersey.com: Lionsgate to open $125 million film and TV studio in Newark NJ