Lights, Camera, Louisiana!

State program rewards companies that create permanent jobs in the film and related industries

NEW ORLEANS – A new state program that rewards companies for creating permanent jobs for residents in the motion picture industry is now rolling.

Deep South Studios, a design-build entertainment production complex in New Orleans, will become Louisiana’s first “Qualified Entertainment Company” (QEC) under the state’s new program. The announcement was made last week by Louisiana Economic Development.

The state will reward the company with state tax incentives for creating permanent, sustainable jobs held by Louisiana residents in the motion picture, digital, music and theatrical industry.

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Jobs that can qualify for these incentives range from screenwriting and sound recording to pre-production and post-production services for studios, digital effects, animation and other creative content and intellectual property.

For jobs paying $45,000 or more annually, Deep South Studios is eligible for a 15 percent payroll tax credit, and the benefits increase with the creation of more and higher-paying jobs.

That credit increases to 20 percent for new jobs paying more than $66,000 annually. A similar incentive – the Qualified Music Company program, or QMC – is available for music-related companies.

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Under the performance-based program, QEC applicants may qualify for up to $1 million in payroll credits per year.

By creating and maintaining a minimum of five new jobs, each QEC may be eligible for the payroll tax credit for five years, with an option to renew for five additional years. QECs must be engaged in the development or distribution of audio, visual or audio-visual entertainment products for public consumption, and be approved by the Louisiana Economic Development Secretary.

As the first Louisiana company to participate in the program, Deep South Studios expects to complete the first three of its studio buildings in early 2018 for a total of 35,500 square feet of production and support space. Deep South Studios envisions a final complex of 11 buildings spanning 262,000 square feet, with a capital investment of $63.5 million. The company’s development site is in Algiers, located on the west bank of the Mississippi River in New Orleans.

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In 2016, Deep South Studios developer Scott Niemeyer secured a commitment from the New Orleans Industrial Development Board to exempt some property taxes on the project through a PILOT agreement, or payment in lieu of taxes, over the initial 10 years. Deep South Studios is finalizing tenant negotiations for the initial structures.  

“In 2016, I tasked our Louisiana Economic Development agency with finding solutions to make our entertainment programs more sustainable, with more statewide impact,” said Louisiana Gov. John Bel Edwards in an announcement. “The QEC model is an effective new tool for helping companies grow permanent entertainment employment in Louisiana.”

“Our incentives encourage film production, digital effects, sound recording, live performance and other entertainment employers like Deep South Studios to hire locally, to invest locally and to build a permanent entertainment industry in Louisiana that complements and builds upon our slate of revolving productions,” said Don Pierson, Louisiana Economic Development Secretary. “Through this initiative, we are providing a concrete way for in-state and out-of-state entertainment companies to accelerate their growth through meaningful, long-term investments and partnerships in Louisiana.”

Louisiana began its film production tax incentives beginning in 2002. Since then, Louisiana has hosted more than $6 billion in film and television productions. The industry continues to generate hundreds of millions of dollars annually in project-based spending across the state, from feature films to episodic TV productions. The state created Louisiana Entertainment, a division of Louisiana Economic Development, in order to encourage film production and jobs.

“Louisiana continues to offer a first-class film and television incentive, and now we can offer a sustaining incentive to encourage companies to hire permanently as they grow their entertainment enterprise in the state,” Louisiana Entertainment Executive Director Chris Stelly said. “We’re excited about Deep South Studios’ commitment to the state, and expect this to be the first of many projects participating in our QEC program.”

To learn more about the QEC program, visit www.louisianaentertainment.gov.

-By Jenny Peterson, Associate News Editor, Biz New Orleans

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