By Taylor Avery, Las Vegas Review Journal, May 11, 2023
CARSON CITY — A bill to make nearly $200 million in film tax credits available every year for the next 20 years was introduced in Carson City on Thursday, part of a bid to get Hollywood studios to relocate to Nevada.
Senate Bill 496, named the Nevada Film Studio Infrastructure Act, will be considered next week.
The bill could provide a massive investment for the state and could diversify Nevada’s economy, said Sen. Roberta Lange, D-Las Vegas, the bill’s primary sponsor.
“It creates a new industry in Nevada to diversify our economy,”Lange said. “So we won’t be in a situation like we were during COVID, when we had to shut everything down. We were a one-industry state, and now we can have another industry where we could get high-paying union jobs.”
A total of $175 million of the transferrable credits would be available for companies that produce content at two proposed sites in the Las Vegas area.
The first, named Las Vegas Media Campus Project, will be located on land owned by the University of Nevada Las Vegas near Interstate 215 and Durango Drive. The project is expected to cost $800 million, half of which will be invested by Southern California-based company Birtcher Development.
UNLV approved an agreement in January to lease the land to Birtcher for the next 100 years.
Brandon Birtcher, the company’s CEO, said the company plans to create an integration program meant to provide rent-free studio and production facility space for use by UNLV students and staff at the site.
Summerlin project
A second, similarly sized project is planned for Summerlin. No dollar figure has been placed on the Summerlin Production Studios Project as discussions are ongoing between Sony Pictures Entertainment and Howard Hughes Corporation, according to a Sony spokesperson.
Lange said she was approached just last week by Sony and Howard Hughes about the second campus. Filming is expected to begin at the Las Vegas Media Campus Project site in 2027.
Production companies that want tax credits would be required to apply to the Governor’s Office of Economic Development before production starts on a film. After production wraps, the companies will be required to submit an itemized report of expenses within 270 days.
If everything is approved, the company will receive the credits, which will be based on 30 percent of the amount of the direct production expenditures. Those credits could be used against any combination of the modified business tax, insurance premium tax or gaming license fee and must be used within six years.
Production companies will also be required to indicate that the production was filmed in Nevada in the ending screen credits. Digital media productions created solely for social media won’t be eligible for the credits.
The program will end 20 years after the first production company at the Las Vegas Media Campus project receives tax credits. Just $55 million will be available in the first year, ramping up to $190 million once certain construction investments at the two Southern Nevada sites are complete.
Return on investment
Developers say the credits could cost the state approximately $2 billion, but could bring in $55 billion over the next 20 years. They also estimate that the building of both campuses could create 8,000 to 10,000 construction jobs, and another 16,000 jobs after the studios are operational.
“We applaud Senator Lange’s vision and her support for this transformative initiative which will bring significant economic and social benefits to Nevada,” Howard Hughes Corporation CEO David R. O’Reilly said in a statement. “In collaboration with Sony Pictures Entertainment, The Howard Hughes Corporation is prepared to activate, utilizing Summerlin’s land capacity, resources, and development team, to bring a thriving film production industry to Nevada and support long-term sustainable growth in the region with this important project.”
A Sony spokesperson echoed O’Reilly’s comments.
“Working with The Howard Hughes Corporation and Birtcher Development and pending the passage of legislation guaranteeing a competitive Nevada production incentive, SPE is prepared to commit up to $1 billion in production spend in Southern Nevada over the next 10 years,” a Sony spokesperson said in a statement.
Birtcher said Nevada’s “positive and friendly business environment” and location make it perfect for the expansion of the film industry.
“Nevada has some remarkable strategic advantages to any North American location. No. 1, it would be the closest location to Hollywood, the capital for productions in the world,” Birtcher said. “No. 2, it’s a university town with a really deep bench with a capability to support the film industry.”
Not everyone was on board, however.
“Film tax credits have been used in other states around the country and fiscal analyses have shown that despite promises, they wind up being a net loser for taxpayers,” said Geoffrey Lawrence, director of research for Nevada Policy Research Institute. “There have been reviews in Louisiana and North Carolina specifically by legislative staff that have shown that they’ve given out way more in credits for film incentives than they have gotten back to the state in terms of increased economic activity.”
Contact Taylor R. Avery at [email protected]. Follow @travery98 on Twitter.
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