Proposed movie studio stirs debate

The proposed Rhode Island Studios would be impressive, especially for mostly rural Hopkinton: a sprawling, eight-soundstage facility of up to 225,000 square feet that would also include a hotel, about 75,000 square feet of production offices, 10,000 square feet of executive offices, about 75,000 square feet of mill and welding space for set and sound-stage creation, and additional buildings.
The project, on land directly off Interstate 95, was presented to local residents on March 5. It would be built on part of 180 acres with development options controlled by Pacifica Ventures, a Santa Monica, Calif.-based development company specializing in serving the entertainment industry, in partnership with Providence-based Halden Acquisition Group LLC, a single-purpose company formed by Rhode Island residents Ralph Palumbo and Anthony DelVicario.
The developers are also asking state lawmakers to create a motion-picture-studio tax credit to reimburse 20 percent of their construction costs, which would equal roughly $15 million of the $75 million project, said Hal Katersky, Pacifica Ventures’ chairman.
Their request for the creation of a new state tax incentive, however, is heightening debate over whether Rhode Island should continue to subsidize development of the film and television industry here during the state’s ongoing budget crisis.
State lawmakers created a tax credit in 2005 that pays film productions to shoot in Rhode Island, and leadership in both chambers of the General Assembly are sponsoring legislation that would create the tax credit for motion picture and television studios that Rhode Island Studios is seeking.
But Gov. Donald L. Carcieri has joined a growing chorus of critics who question whether the film tax credits – more than $30 million of which have already been given to the film and TV industry – are paying off as economic development for the state’s taxpayers.
“It’s not clear if they provide a sufficient economic benefit to Rhode Island taxpayers,” said Jeff Neal, the governor’s spokesman. “Any tax credit program should bring in more economic activity than the value of the tax credit we’re granting.”
Steven Feinberg, executive director of the R.I. Film & Television Office, offered a spirited defense of the tax incentives, which he said are responsible for a rapid growth of the film and TV industry in the state that has pumped $200 million into the state’s economy and created hundreds of new, high-paying jobs since 2005.
Creating a rebate to ensure construction of a state-of-the-art movie production studio in Rhode Island would pay for itself in time, by making the state a regional anchor for the industry, Feinberg said.
A film studio in Rhode Island would create hundreds of jobs that, even if they weren’t permanent, would still pay higher average salaries annually than the state’s current average wage, he said.
The studio would also help keep local college graduates entering the entertainment industry in the state, Feinberg said.
Developing the film and TV industry in Rhode Island also supports tourism and convention officials in their efforts to market the state, Feinberg said.
“I’m very supportive of having a major, state-of-the-art studio here in Rhode Island,” he said. “We’re just getting started, and it’s become a phenomenal success.”
The film studio that Pacifica Ventures wants to build in Hopkinton would be its third. The company opened its first studio, in Albuquerque, N.M., last year, and plans to break ground this summer on a second studio in Philadelphia this summer.
The Albuquerque studio has been booked solid since it opened, and is slated to host Terminator 4, the largest film in production this year, said Katersky, a Tiverton native who graduated from the University of Rhode Island but has lived on the West Coast for decades.
In its attempts to woo the film and TV industry, Rhode Island faces significant competition from neighboring states. Connecticut and Massachusetts both created even more-generous film incentives soon after state lawmakers created the motion picture production tax credit here in 2005.
Ralph Palumbo, of Halden Acquisition Group, said Rhode Island must beat Massachusetts in creating its own film studio rebate for Rhode Island Studios to continue as a viable project.
But Neal, Carcieri’s spokesman, said the governor has concerns about creating a tax incentive to build a movie-production studio that would ramp up use of the state’s existing film and TV industry tax break, which may be losing money for the state.
“We need to make sure that Rhode Islanders are the net winners,” Neal said. •

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