A Fulton County agency on Tuesday gave initial approval to a $40.2 million property tax break for a speculative movie studio campus in Chattahoochee Hills.
The Development Authority of Fulton County (DAFC) board voted 6-2 in favor of the deal. But members clashed over impacts to county schools and the fact that about half the tax incentive will come from the school system.
Fulton County Schools Superintendent Mike Looney, who is also a DAFC board member, ultimately voted to support the $1 billion Kane Studio project despite significant misgivings. Fulton schools will forego its portion of the tax break amount as Kane Studio is built and workers move to the county, Looney said, and it is likely his district would need to build a new school to serve those families.
“All the families of Fulton County are going to have to pay for that growth,” he said, urging the developers to consider setting aside land for a future school. But no such a condition was placed on the studio developers.
Kane Studio would rise on nearly 1,700 acres along Campbellton Redwine Road in rural southwest Fulton. Backed by lawyer and former Republican political operative Patrick Millsaps, the project would rank among the largest such complexes in the country, featuring dozens of buildings, including soundstages for filming and space for post-production work.
Georgia has turned into one of the top filming locations in the U.S., thanks in no small part to an incentive program for film production companies that’s become one of the state’s biggest corporate subsidies. In fiscal year 2022, the state of Georgia issued some $1.3 billion in tax credits to film companies.
Georgia has seen several developers build filming campuses in the state, including Trilith Studios, Assembly Atlanta and Shadowbox Studios. Tyler Perry Studios also serves as a home for the filmmaker’s own projects and Perry rents soundstages to other film production companies.
Credit: J. Scott Trubey
Credit: J. Scott Trubey
Though film and television production has largely been sidelined for months — first by the writers strike and a subsequent one by the largest actors union — Georgia tallied $4.1 billion in film industry spending in fiscal year 2023, according to state data.
While Hollywood ships a bevy of stars for major feature films and TV series shot in Georgia, critics say the jobs created locally are often low-paying roles behind the cameras and are easily moved if the tax credits were to ever dry up.
Kane Studio essentially functions as a commercial real estate company that leases soundstage space to filmmakers, and will not directly receive those state subsidies, CFO Joe Briner told the board. But he said the local subsidy from Fulton is vital.
“We believe this project fulfills the very mission of the Development Authority of Fulton County,” Briner said. “Maybe unlike any project you will ever see. The incentive is a requirement for this project to move forward.”
J.C. Bradbury, a Kennesaw State University economics professor who has studied the state’s film incentives and formerly served on Cobb County’s authority, said it makes no economic sense to subsize development of a filming campus when the industry receives hefty state incentives.
If demand for studio space is so strong, the project shouldn’t require taxpayer support, he said.
“You are opening a business to serve this heavily incentivized business,” he said. “(Development authorities) are supposed to incentivize development where development would not occur.”
DAFC, which has rebranded itself as Develop Fulton, has taken heat over the years for tax breaks critics say were unnecessary because the projects awarded would likely have been built anyway.
A 2021 Atlanta Journal-Constitution investigation found DAFC provided preliminary or final approval for more than $328 million in tax breaks in a three-year period, largely in fast-growing areas like the Beltline or Midtown with few public benefits. DAFC earns a fee from developers that receive its tax breaks, and uses the money it receives to fund operations.
Briner said Kane Studio will eventually employ 3,000 to 4,000 workers. He said the company is seeking a state-run film jobs training center from Georgia Quick Start.
A DAFC fact sheet said the project will generate an estimated $105.5 million in new tax revenue over 10 years for Fulton, Chattahoochee Hills and the county schools after deducting the tax break. That includes $7.4 million in its first year, up from about $31,000 currently.
Briner said Kane Studio will also provide two fire trucks and donate approximately 80 acres of land to Chattahoochee Hills as part of its deal for zoning approval. The company also plans to spend tens of millions of dollars for water and sewer connections and broadband internet service that will benefit the community.
“It’s needed. It hits all the notes that we need,” said DAFC Chairman Michel “Marty” Turpeau IV.
The Hollywood strikes have slowed financing, Briner said, though he expects that will be ironed out by the end of the year with a ground breaking expected in January. The project is expected to be built in three phases through 2027.
A final vote to approve the incentive is likely to happen in the weeks ahead.
In other business, DAFC approved issuance of $63 million in tax-exempt bonds to support Georgia Tech’s Technology Square Phase 3 project. Those bonds will support classroom and office space for Tech’s business school. The board also voted to approve $40 million in tax-exempt bonds to help finance a new student athlete performance center at Bobby Dodd Stadium that will include a dining hall, sports science and sports medicine facilities and a strength and conditioning facility for the Yellow Jacket football team.
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