Lionsgate Will Get Extra Tax Breaks To Make Movies, Shows In Newark

NEWARK, NJ — A huge movie and television studio is being built in Newark. And one of the largest companies in the industry will get extra tax breaks from New Jersey to help it pay directors, producers and actors who take the stage there, state officials say.

The New Jersey Economic Development Authority (NJEDA) recently announced that it has awarded a milestone “Studio Partner” designation to Lionsgate, one of the driving forces behind the new studio in Newark.

Lionsgate has signed a 10-year and six-month lease for a “substantial portion” of the studio, which is being developed and operated by Great Point Studios. When it’s finished, the 300,000 square-foot, full-service, modern entertainment complex will include production stages, offices, support space and parking for 400 cars and 65 trucks. The facility will offer a full set of production services on site, including grip and electric, equipment, props, set building, restaurants, location catering, cleaning and security.

According to a previous statement from Gov. Phil Murphy’s office, the new studio in Newark is expected to create 600 jobs and more than $800 million of “annual economic impact.” Construction started in September and is expected to be completed by September 2024. Read More: Huge Movie Studio Coming To Newark (Here’s The Details)

What’s the big deal behind the “studio partner” designation? Tax breaks, according to the NJEDA.

As part of the Garden State Film and Digital Media Jobs Act – which was revived by Murphy during his first term – studio partners will be eligible to write off additional “above-the-line” wage and salary costs, which are made to highly paid individuals like directors, producers, writers and performers.

Studio partners can apply for above-the-line wages and tax credits of $15 million, $25 million, $40 million or $60 million, depending on the amount of qualified film production expenses involved in the project. In addition, $100 million of the allocation for film and digital media tax credits is set aside for studio partners, the NJEDA said.

The studio partner designation awarded to Lionsgate is one of only three available under the film and digital media tax incentive program.

Founded in 1998, Lions Gate Films Inc. is a subsidiary of Lions Gate Entertainment Corp. The company’s film and television subscription and location-based entertainment businesses include a library of over 17,000 titles, including iconic film and television franchises such as “Mad Men,” “Orange is the New Black,” “The Hunger Games,” “La La Land” and the “Twilight Saga.”

“Awarding this designation is a major step in New Jersey’s evolution as a film and television destination,” Murphy said. “Bringing studios like Lionsgate to New Jersey will allow us to attract more and larger productions to our state and will create good, high-paying jobs for our residents.”

Not everyone agrees with the governor, however. Some critics have bashed the revived state tax break program for moviemakers, arguing that it’s a huge corporate giveaway that only benefits wealthy production companies.

“Hollywood is lining up for free money without providing any long-term benefits for our residents who struggle to make ends meet under the highest taxes in the nation,” Sen. Joe Pennacchio said after Murphy relaunched the program in 2018.

Pennacchio compared the program to opening a hot dog stand and offering free hot dogs.

“The line for the free hot dogs would circle the block,” he said. “We shouldn’t assume this program is a success because Hollywood moguls are lining up to take our free money.”

• See related article: NJ Film Tax Breaks Only Help Hollywood Elites, Senator Says

But according to Murphy and other supporters of the program, the proof is in the pudding. Film and television production in New Jersey shattered all previous records in 2021, with the industry spending more than a half of a billion dollars in the state and creating more than 5,500 jobs. In total, New Jersey was home to 725 productions in 2021, including 68 feature films and 132 television series, the governor’s office said.

Newark has been among the cities and towns seeing an explosion of filming in the past few years.

Boosted by nearly $2 million in tax incentives from the state’s Film and Digital Media Tax Credit Program, Warner Brothers studios filmed several segments of the blockbuster comic book-inspired movie, “Joker,” in Newark in 2019. Read More: Tax Breaks Helped Bring 'Joker' Movie To Newark

Newark issued only 15 film permits in 2020 due to the coronavirus pandemic, as opposed to 57 permits in 2019. But filming rebounded big-time in 2021, with several well-known shows and movies choosing the city as a location, including "The Equalizer," "Law & Order" and "Wu-Tang: An American Saga." Read More: Newark Film Permits: See What Shows Came To The City Last Year

Other recent filming in the city has included “House Hunters,” “Bruised” starring Halle Berry, and “Isle of the Dead,” the upcoming spinoff of AMC’s mega-hit show, “The Walking Dead.” Read More: Film Renaissance In Newark Keeps Booming (Here's The Latest)

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