City Of Miami Film Studio Already In Use Eyes 3 Million A Year Income
By Jacquelyn Weiner
At full capacity, the planned Miami Entertainment Complex could funnel almost $3 million a year to Miami’s Omni Community Redevelopment Agency, according to an agency report.
The city agency plans to build the complex — a film-production facility — on a 2.78-acre Overtown property it purchased in February.
The project also marks one of the first non-taxpayer-funded cash infusions to Omni Community Redevelopment Agency efforts in its 25-year history.
"It is extremely beneficial to our residents, business owners and stakeholders that we create new revenue generating opportunities which will allow us to reinvest even more money into our CRA-boundary communities," Pieter Bockweg, executive director of Miami’s Community Redevelopment Agency, wrote in an e-mail. "This is absolutely something we hope to do more of in the future."
The Miami Entertainment Complex is expected to cost $10.6 million to build, according to the report, to be paid for with agency tax-increment financing.
Almost all agency funding comes from tax-increment financing, collected as a portion of taxes within the agency’s downtown Miami boundaries.
Tax-increment financing is calculated annually based on changes in property values, according to the agency’s website, comparing the value of the property when it was developed to its current value.
Because the agency secured the property at "a very attractive price," according to the report, it provided "the budgeting for additional [tax-increment financing] dollars to maximize the Construction and Renovation phase(s) for its final proposed & intended use."
The agency bought the property slated for the Miami Entertainment Complex at 29 NW 13th St. from Miami-Dade County’s School Board in February for $3.1 million.
In 2010, the property’s assessed value was $3.1 million.
The Miami Entertainment Complex building — known as the Miami Skill Center — is currently being leased out for production of "Rock of Ages," a major motion picture featuring Tom Cruise, Catherine Zeta-Jones and Alec Baldwin for $5,000 a month plus utilities.
When complete, the government-created film facility is to be the first of its kind in Florida.
Private-sector film studios in Florida include Universal Studios in Orlando and G-Star Studios in Palm Springs.
Georgia, Louisiana and Michigan house film studios built with government aid, according to the report.
The Community Redevelopment Agency’s plans call for construction of the Miami Entertainment Complex to begin in November 2012, according to the May report, with an April 2014 opening.
Those dates are subject to the agency board’s approval, Mr. Bockweg said.
The major facility revamp calls for raising the entire building’s roof to 50 feet, addressing industry concerns that the warehouse’s height is insufficient for filming.
At least 12,000 square feet are to be dedicated to flexible office space, structured as two floors totaling 12,000 square feet or four floors totaling 24,000 square feet.
The center is also to house two sound stages of 10,000 to 12,000 square feet each.
Sound stages are soundproof rooms or buildings used for filming.
Stages of that size are "the work horses of the industry," according to the report, as "90% of all major high-budget feature films are produced on sound stages of this size."
Proposals also call for a motion capture stage, according to the report, which is a special-effects green-screen stage used to film for digital imaging, 3D animation and gaming.
The Community Redevelopment Agency plans to manage the facility by hiring a professional management company or a fulltime agency employee.
Other plans for the site include forming a partnership with a "major college or university," allowing students to gain experience in the film-production industry while providing a steady crew for tenants.
As for revenues, the agency estimates it will pull in $2.974 million annually with 100% occupancy.
At 75% capacity, the facility is expected to generate $2.2 million per year, $1.5 million at 50% and $743,625 at 25%.
Operating expenses are estimated at $704,400 annually.
"This facility will be self supporting," according to the report, "and when leased at maximum capacity will have paid for itself in less that a 10-year period and provide annual revenues in excess of $2 million."
Mr. Bockweg said that "based on [the agency’s] research and the direct feedback from the film industry, we expect there to be high demand for a unique facility" like the complex.
Greg Hauptner, president, CEO and chief financial officer of G-Star Studios and School of the Arts, said there is a "very high probability" that the Miami Entertainment Complex will average "nearly 100%" occupancy.
Mr. Hauptner has advised the Community Redevelopment Agency on its film-studio project.
His G-Star Studios Palm Springs facility houses the largest motion-picture soundstage in Florida, according to the report, and is considered the complex’s closest competition.
Mr. Hauptner said occupancy at his studios has been steadily over 75%, adding that most film productions would prefer Miami over Orlando and Palm Springs.
Yet until the Community Redevelopment Agency’s plans, he said, Greater Miami has been lacking quality facilities.
"You have a major motion picture center that is not fulfilling its potential because it doesn’t have a brick-and-mortar motion-picture studio," Mr. Hauptner said of Greater Miami. "Until you get a world-class facility for sound stages, Miami will never approach its potential."
To read the entire issue of Miami Today online, subscribe to e-Miami Today.