Movie studio, school rolling - Land sale approved for $100 million site
By Bruce Eggler
May 03, 2006

Armed with New Orleans City Council approval of a needed sale of city land, a developer said Tuesday that he is "moving aggressively forward" with plans to build a more-than-$100 million movie production studio near the Lafitte public housing complex.
The council recently became the fifth governmental body to sign off on various aspects of plans for the facility, a longtime goal of people hoping to transform the city into a filmmaking center.
Two related companies, Film Factory LLC and LIFT (Louisiana Institute of Film Technology) LLC, propose to build a 320,000-square-foot film studio and vocational school on a nine-block-long site bounded by North Claiborne Avenue and St. Louis, North Dorgenois and Lafitte streets.
The mostly vacant site, running along the southern side of the Lafitte housing development near Treme, is zoned light-industrial and is part of a former Norfolk Southern railroad corridor.
The project would include several soundstages, post-production facilities, a back lot and outdoor sets, as well as offices, a school, student stages and a three-story garage. The buildings would be mainly between Claiborne and North Galvez Street.
Developer Malcolm Petal, chief executive officer of Film Factory and LIFT, said the complex "would be a significant job creator for the New Orleans area," potentially generating as many as "2,000 permanent, full-time jobs in film production, permanent facility operations and vocational school faculty and staff."
He said the school could train as many as 750 people a year for jobs in movie production.
"We have made it our goal to try to locate this project in New Orleans, where this type of job creation is greatly needed," Petal said.
More then $100 million
In a letter to council members, Petal failed to put a dollar value on the project, but various government bodies have been told the value would be between $100 million and $130 million.
An ordinance approved by the council authorizing sale of city-owned land needed for the project requires the buyer to secure a building permit by Dec. 31, 2010, for construction with a value of at least $100 million. Otherwise, the sale would be void.
Film Factory, working with Daniel Taylor of D'Gerolamo Development LLC, already has bought most of the land involved from the railroad.
Petal said Tuesday that he hopes to begin construction in the next few months, with the goal of having parts of the complex ready for use by late 2007 or early 2008.
The city's Industrial Development Board and the State Bond Commission have given preliminary approval to selling as much as $150 million in bonds to build and equip the studio and vocational school.
When approved in March, it was the first project to receive the Bond Commission's endorsement under the Gulf Opportunity Zone Act. The federal law, passed in December, authorized $7.9 billion of tax-exempt bonds for businesses in Louisiana to aid the state's recovery from last year's hurricanes. The bonds offer access to credit at lower rates than conventional corporate debt.
The bonds, likely to be issued through a consortium of investment banks, would be backed by the studio's expected revenue streams, with the land as collateral. They would involve no risk or obligation to the state, Petal said.
LIFT, launched in 2001, was the first company to use what were then Louisiana's new tax incentives for the movie industry. It has since become the state's largest film and television production company, offering editing, accounting, transportation and other services.
'Exciting' project
Don Hutchinson, the city's economic development director, told the council that the movie studio project is "one of the most exciting opportunities" for the city he has seen, especially since Hurricane Katrina.
To build the complex, the developers needed the city to sell them parts of seven city streets that cut across the site, plus portions of what is known as Carondelet Canal and Walk.
Most of the streets involved are so-called "paper streets," meaning they are rights of way rather than actual streets, but part of one real street, North Prieur, would be closed. Officials from the city's Department of Public Works said Prieur carries little traffic and that closing it would not be a problem.
North Galvez, the principal street cutting across the property, would remain open.
The city's Planning Advisory Committee and the City Planning Commission both approved the proposed sale of public property before the issue came before the council April 20.
No one spoke against the project before the Planning Commission or the council, but some neighborhood residents now have begun questioning the proposed sale, which would be by public auction. Although not opposing construction of a long-sought movie production studio in the city, the residents say they don't understand why neighborhood associations were not informed of the proposal before the commission and council voted.
The developers have agreed to create a bike path and landscaped green space along the Lafitte Street edge of the site. The Planning Commission staff said that provision satisfied the recommendation in the city's master plan that the old railroad corridor be used as a linear park or open space to benefit adjacent neighborhoods.
The staff said the entire project would "bring much-needed economic development in an area of the city that for many years has been underutilized and remained stagnant."
The Planning Commission and the council approved the proposed land sale unanimously.