REEL DEAL: Board approves economic incentive deal for film production studio

San Marcos will soon see a new film production studio after San Marcos City Council and the Hays County Court of Commissioners both approved incentive agreements with a San Marcos-based studio management company.

After careful consideration and discussion, the San Marcos City Council has approved a Chapter 380 Economic Development Incentive Agreement with Hill Country Group, LLC, for the location of a film and video production studio within the development of La Cima.

The agreement provides for the granting of incentives in the form of reimbursements of a percentage of property and personal taxes over five years for the construction of at least 820,000 square feet of space for the studio.

“San Marcos was the clear choice for where we wanted to do business,” said Zach Price, co-founder and COO of Hill Country Studios. “The natural beauty of the Hill Country, along with the local workforce and proximity to the talent pools of Austin and San Antonio, made it perfectly logical for us to locate our film production studio in the Texas Innovation Corridor. “

The studio reportedly has 22 full-time employees with an average salary of $100,000 and up to 1,400 contract workers with an average of 1,200 on production projects with an average salary of $80,000, according to a city presentation.

There would be a total capital investment of $267 million and the facility would include 820,000 square feet of production stages, workshops, offices and support space. Construction would be split into three phases and begin in April 2023.

Prior to the facility presentation, Acting City Manager Stephanie Reyes made a statement regarding concerns regarding the facility being constructed on the Edwards Aquifer Recharge Area.

“Staff have worked diligently to read the concerns received and are prepared to address them as much as possible,” Reyes said. “We recognize and appreciate everyone’s contribution. Know that we also share a desire to protect and preserve our most precious resource. As a reminder, tonight’s decision is whether or not the council should encourage a film studio project that has pledged to be better environmentally and economically than a commercial project that could be built on this site. , as currently provided for in the La Cima Development Agreement, approved in 2013.”

Deputy City Manager Joe Pantalion and City Economic and Business Development Director Kelsee Lee gave a presentation on the project in which Pantalion again mentioned that the decision board was considering “should they encourage a studio project of cinema that will be better from an environmental and economic point of view than a commercial one? project that can be built on this site otherwise? »

The presentation showed how the proposed movie studio would favorably compare to a community commercial project under the 2013 La Cima deal. With the movie studio having a lower waterproof cover percentage, there will be fewer runoff, less pollution load, more infiltration and more recharge.

“If you’re concerned about the environment and if you’re really concerned about the Edwards Aquifer like we are, you really have to dig into the details and look at those things and see very fundamentally what the best-case scenario is going to be and in our view the movie studio is,” Pantalion said.

Lee also spoke of the benefits San Marcos would have with the facility, including a strong economic impact, a need for local suppliers for projects, and the potential for collaboration with Texas State University and CISD San ​​Marcos for internships and fellowships. training opportunities.

The deal would see San Marcos collect approximately $161,000 in property taxes in 2025 after construction is complete and $11.4 million in total over a 10-year period. There would also be a property tax refund at a rate of 90% in the first year, which would reduce overtime.

Council member Maxfield Baker presented several concerns about the facility, the first regarding industry numbers and statistics taken from the presentation and related to economic incentives.

Baker expressed frustration that city staff did not review an email containing academic literature that questioned the benefits and economic incentives the industry would actually provide. Mayor Jane Hughson and Baker further had a disagreement regarding bringing a motion to postpone the item.

Council members Jude Prather and Mark Gleason shared their support for this project, with Gleason thanking the community of San Marcos for their interest in this item and the importance of protecting the environment.

“We’re lucky to really bring something unique to San Marcos and there’s no way I’m going to support that if I thought it was going to have a very negative impact on the aquifer, I don’t think it would. ‘none of my colleagues want to see the environment damaged in any way,’ Gleason said.

Board member Shane Scott also expressed his support for the project and spoke about his experience in the film industry and how the project would benefit San Marcos.

“I think it’s going to be good for diversifying our economy,” Hughson said. “There will be full-time jobs, there will be contract jobs, it will be something different from what else we have in San Marcos to some degree”

Following a discussion about funding the rebate the city would pay, Scott introduced a motion to call the question and end debate, which was not given a second. Baker then put forward a motion to support demands for conservation development methods that would ensure the protection of the aquifer which Baker read in an email, however, this motion also did not receive a second.

Baker further raised questions regarding police response time, additional requirements for officers, and protection of the aquifer should an accident occur at the studio, among others.

Gleason also spoke with Nicholas Kehl of Bowman Consulting to confirm aquifer conservation and preservation, such as collecting and protecting rainwater and runoff.

Regarding employment opportunities for the San Marcos community, Baker suggested the implementation of an internship program. Following the motion to establish an internship program and a second from council member Saul Gonzales, the motion failed.

Eric Willis of La Cima clarified that establishing such a program would be the responsibility of those who lease and contract with the facility.

“I think going forward in these conversations can’t we just put things in there that are unachievable or seemingly unfleshed out, as you know, I mean we literally highlight it as an opportunity and justification to support that, I think it’s a bit dishonest,” Garza said.

Baker made another motion to provide on-site training and access to industry jobs, which was not seconded. Baker also introduced a motion to amend the Economic Development Incentive Agreement Resolution Chapter 380 non-discrimination to match that of the city by including age, gender identity and sexual orientation.

Prather seconded the motion and referred to the time spent on the point. After the motion fell through, Baker expressed his disappointment saying he was “ashamed” that some of the other council members did not vote in favor of the motion.

To this, Gleason replied that he was “tired of the filibuster from one of our colleagues”, to which Baker responded by telling Gleason to “learn what the words mean before you speak them”.

After more back and forth and a call for Prather’s question, the board would go on to pass the main motion 6-1.

For the full agenda and meeting, visit http://san-marcos-tx.granicus.com/ViewPublisher.php?view_id=9.

This story has been updated since it was first published

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