The Patrick administration late today turned down a request for $50 million in infrastructure improvements for a proposed new movie studio in Plymouth, the hometown of Senate President Therese Murray.
A spokeswoman for the governor’s office of administration and finance issued a statement saying the net new tax revenues generated by the Plymouth Rock Studios project would not be enough to pay off the debt service on the $50 million in bonds the state would need to issue for the water and sewer projects. In essence, the Patrick administration said the tax revenue benefits of the project were not big enough to cover the state’s costs.
The decision is a blow to the state’s fledgling movie industry and its efforts to capture more of the business associated with the films flocking here because of the state’s 25 percent film tax credit. (CommonWealth magazine focused on the tax credit last year in the article “Subsidizing the Stars.”) Officials with Plymouth Rock tried to tap a state program called I-Cubed to pay for the $50 million in infrastructure improvements at the Plymouth site. They had been planning to break ground on their $500 million project later this summer.
Patrick administration officials released no supporting documentation for their decision, but one source said the state’s 25 percent film tax credit figured prominently in the tax revenue analysis conducted by the state revenue department and an outside consultant, Deloitte Touche.
“Although the I-Cubed program is unfortunately not an available option for the Commonwealth to assist this project, the Commonwealth looks forward to an ongoing dialogue to identify other potential means by which the Commonwealth can support the project,” read a statement issued by Cyndi Roy, a spokesman for the office of administration and finance.
Murray, a strong supporter of the Plymouth Rock studio, issued a statement saying she hoped other ways to help the Plymouth Rock project might be found. “Just like our emerging life science and biotech industry, this studio and the film industry are poised to be a great benefit to our area and the Commonwealth with an increase in jobs, improved infrastructure, and increased economic activity,” Murray’s statement said. “The Commonwealth has taken the first step in attracting these new industries; now we must work so that they meet their full economic potential.”
Under I-Cubed, the net new tax revenue spawned by a supported project must be 1.5 times the annual debt service on the 30-year bonds used to pay for the infrastructure improvements. With the Plymouth Rock project, state officials apparently concluded the tax revenues would not be sufficient to cover the state’s borrowing costs.
Plymouth officials have wholeheartedly embraced the idea of a movie studio opening in their town, offering the developers property tax breaks and other enticements. It was unclear whether the Plymouth Rock developers would push ahead with their project anyway or be able to find other revenue sources for the infrastructure improvements.
The Plymouth Rock decision comes at a time when the state is slashing its budget and raising taxes while handing out millions of dollars in tax credits to companies that come to Massachusetts to shoot films. What’s unclear is whether the economic benefits of movie-making in Massachusetts are worth the cost in tax credits.
The state Revenue Department has been working on an analysis of the economic impact of the film tax credit. That analysis is scheduled to be released soon.
