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Copyright © 2019 Albuquerque Journal
NBCUniversal is planting roots in New Mexico.
Over the last several years, the media giant has cultivated a relationship by housing a handful of shows in the state. It spent millions building the set for “Midnight, Texas” on the backlot of Albuquerque Studios four years ago.
And now it’s taking things to the next level.
State and city of Albuquerque officials announced on Friday that NBCUniversal is entering into a 10-year venture with Garcia Realty and Development to renovate and redevelop a warehouse, which is located at 1601 Commercial Street NE, into a state-of-the art TV and film studio.
When the more than $4 million renovation is complete, the studio will have two sound stages, offices and a mill.
NBCUniversal is committing to a production spend of $500 million over a decade to create projects in Albuquerque.
In addition, NBCUniversal and Garcia Realty and Development will jointly locate lighting, grip and transportation operations at the facility.
According to the deal, NBCUniversal will have more than 330 full-time jobs year-round at its New Mexico hub, generating an economic impact of $1.1 billion over 10 years.
“We want to be the center of film and TV outside of Los Angeles and New York,” said Alicia J. Keyes, N.M. secretary of Economic Development. “It feels great that we have partners and they are committing to be providing consistent jobs.”
The state of New Mexico Economic Development Department is providing $7.7 million through the Local Economic Development Act (LEDA) and the city of Albuquerque is pledging another $3 million from its LEDA fund – which has a current balance of $7.4 million – to the redevelopment and production commitment. Much of that money will go toward lease payment reimbursements. Documents show NBCUniversal’s total lease payments related to this project will be $1.17 million a year.
The city of Albuquerque will act as the fiscal agent for the funding and the City Council is set to vote on it Monday.
City Councilor Isaac Benton, who represents the district where the studio is located, said he supports the allocation and believes it is a wise investment.
“It’s what LEDA was made for – to help deals like this go forward,” he said.
Should NBCUniversal cease operations in the first five years of the agreement, it would have to pay back all of the LEDA money it had received up to that point. If it leaves during the second half of the agreement, it pays back a portion of the public money received.
The company would also incur a financial penalty if its direct and indirect spending fails to reach at least $225 million by the end of 2023 and if the amount does not hit $500 million by Dec. 31, 2029.
The agreement requires annual reporting to the city starting in 2021, and Synthia Jaramillo, the city’s Economic Development director, said her office has a “an entire team” devoted to ensuring companies meet their obligations under incentive packages.
The NBCUniversal deal comes nearly eight months after Netflix purchased Albuquerque Studios to make it a production hub.
Netflix also received LEDA funding totaling $14.5 million.
“This is the next pillar in developing a strong film industry,” Keyes said. “I want there to be at least one more.”
Ed Garcia of Garcia Realty and Development said the Netflix deal forced other companies to find new filming locations, which led to his family’s deal with NBCUniversal.
“When Netflix bought Albuquerque Studios, there was going to be a shortage of first quality production space available,” he said. “The major players were scrambling and, fortunately, we were able to hopefully fill some of the void in the market.”
New Mexico upped the ante with a new package of film and TV incentives that were passed by lawmakers during this year’s 60-day legislative session and signed into law by Gov. Michelle Lujan Grisham in March.
The package raises a 2011 cap on what the state can pay out to film and TV productions from $50 million to $110 million per year.
Film companies receive a 25% rebate on qualifying expenditures on goods and services in New Mexico. There’s a 30% rebate for some TV shows.
In addition to the new provisions for film productions in rural parts of New Mexico, the bill signed into law this year has some carve-outs for companies that make a commitment to stay in the state for at least 10 years.
Both Netflix and NBCUniversal are not subject to the $110 million cap.
At the news conference on Friday, the governor praised the work of the film industry – one which she has been a champion.
“New Mexico is the place to be for the future of the film and TV industry,” Lujan Grisham said. “I’m incredibly excited to announce today NBCUniversal has chosen to plant their flag here in New Mexico, establishing a world-class production facility in Albuquerque.”
The deal has been months in the making.
The idea for studio space began with communications last October between Keyes and Carrie Henderson, senior vice president of productions at NBCUniversal.
“Carrie wanted to move here and told me to find her somewhere to live,” Keyes said. “It was around the same time Carlos Garcia showed me this facility. She wanted to see it and saw how extraordinary it was.”
Henderson is currently overseeing production of USA Network’s “Briarpatch,” which begins filming Monday at the facility.
“I personally fell in love with the place and as we were doing location scouting, there are pockets of the city that are quite amazing,” Henderson said. “I remember saying to someone, you don’t need a heavy duty production designer here.”
Henderson said Albuquerque was the perfect choice since it’s an emerging city.
“For filmmakers, we’re always looking for places that are emerging rather than already established,” Henderson said. “We like to be part of that and establishing a city as a film hub.”
Garrett Kemble, vice president of development at NBCUniversal, said the company has cultivated a strong relationship with the New Mexico film industry.
“We come here a lot and it’s a specific place when it comes to the diversity and the culture,” Kemble said. “It’s a real cinematic landscape for the things that we make and that’s incredibly exciting for us.”
Kemble said the studio facility is going to make NBCUniversal increase its production in Albuquerque.
“So often when we’re looking for a place to film, it’s about finding enough crew and enough space,” Kemble said. “Albuquerque has a great crew and this is going to give us more space.”
• Warehouse was constructed in 1976 for Richard’s Distributing; sold to Southern Glazer’s Wine and Spirits. Largely vacant since 2017.
• There will be two soundstages, offices and mill space.
• City of Albuquerque completed street improvements, curbs and sidewalks. LED solar street lights will be installed.
• The 300-plus workers employed by NBCU will earn an average wage of $58,000 and support another 497 indirect workers with an average wage of $41,000.
• NBCUniversal will develop a marketing strategy with the state and city to promote Albuquerque and New Mexico. The value will be in excess of $500,000 per year.
• NBCUniversal will provide at least $55,000 per year to fund existing workforce development initiatives in the state.
• NBCUniversal’s director mentorship program will provide a stipend to an aspiring director from the local community who will shadow a director for a period of one to three episodes, including pre- and post-production.