Deep South Studios To Become Louisiana’s First QEC Project

BATON ROUGE, La. — Deep South Studios, a design-build entertainment production complex in New Orleans, will become Louisiana’s first Qualified Entertainment Company under the state’s innovative new program that cultivates sustainable jobs for Louisiana’s motion picture, digital, music and theatrical industries.

Louisiana pioneered modern-era film production tax incentives beginning in 2002 and remains one of the leading destinations for motion picture production in the world. The industry continues to generate hundreds of millions of dollars annually in project-based spending across the state, from feature films to episodic TV productions.

To grow the number of permanent Louisiana jobs, the state created Qualified Entertainment Company incentives in 2017 that reward investment in permanent quality jobs held by Louisiana residents. For jobs paying $45,000 or more annually, the QEC employer is eligible for a 15 percent payroll tax credit. That credit increases to 20 percent for new jobs paying more than $66,000 annually. A similar incentive – the Qualified Music Company program, or QMC – is available for music-related companies.

“In 2016, I tasked our Louisiana Economic Development agency with finding solutions to make our entertainment programs more sustainable, with more statewide impact,” Gov. John Bel Edwards said. “The QEC model is an effective new tool for helping companies grow permanent entertainment employment in Louisiana. We’re pleased that Deep South Studios is putting down permanent roots here. They are at the vanguard of companies that will hire the brightest creative minds in the business to produce a greater economic impact for the entertainment industry in our state.”

Under the performance-based program, QEC applicants may qualify for up to $1 million in payroll credits per year. By creating and maintaining a minimum of five new jobs, each QEC may be eligible for the payroll tax credit for five years, with an option to renew for five additional years. QECs must be engaged in the development or distribution of audio, visual or audio-visual entertainment products for public consumption, and be approved by the LED Secretary.

As the first Louisiana company to participate in the program, Deep South Studios expects to complete the first three of its studio buildings in early 2018 for a total of 35,500 square feet of production and support space. Deep South Studios envisions a final complex of 11 buildings spanning 262,000 square feet, with a capital investment of $63.5 million. The company’s development site is in Algiers, located on the west bank of the Mississippi River in New Orleans.

“Our QEC and QMC incentive encourages film production, digital effects, sound recording, live performance and other entertainment employers like Deep South Studios to hire locally, to invest locally and to build a permanent entertainment industry in Louisiana that complements and builds upon our slate of revolving productions,” LED Secretary Don Pierson said. “Through this initiative, we are providing a concrete way for in-state and out-of-state entertainment companies to accelerate their growth through meaningful, long-term investments and partnerships in Louisiana.”

In 2016, Deep South Studios developer Scott Niemeyer secured a commitment from the New Orleans Industrial Development Board to exempt some property taxes on the project through a PILOT agreement, or payment in lieu of taxes, over the initial 10 years. Deep South Studios is finalizing tenant negotiations for the initial structures.  

“We are proud to pioneer the Qualified Entertainment Company program alongside LED,” Niemeyer said. “I have always envisioned the Deep South Studios infrastructure project as the poster child for LED’s efforts to build a long-term entertainment industry in Louisiana. We hope to set an example for more entertainment businesses to create lasting, quality jobs and sustainable economic growth for the creative industries here in Louisiana.” 

Since the dawn of Louisiana’s modern-era film program in 2002, Louisiana has hosted more than $6 billion in film and television productions. In addition to creating thousands of jobs, these productions have generated significant spending through purchases at small businesses statewide.

Louisiana-based film and TV projects have delivered Emmy Award-winning and Academy Award-winning work while exporting content that demonstrates the state’s ability to build its cultural brand and the flexibility to portray other locales. Last year, Gov. Edwards encouraged LED to identify ways to build a more permanent base of entertainment jobs engaged in creating content within the state, with services ranging from screenwriting and sound recording to pre-production and post-production services for studios, digital effects, animation and other creative content and intellectual property.

“Louisiana continues to offer a first-class film and television incentive, and now we can offer a sustaining incentive to encourage companies to hire permanently as they grow their entertainment enterprise in the state,” Louisiana Entertainment Executive Director Chris Stelly said. “We’re excited about Deep South Studios’ commitment to the state, and expect this to be the first of many projects participating in our QEC program.”

About Deep South Studios
A new full-service motion picture, television and digital media production facility, Deep South Studios is located in New Orleans, Louisiana – the heart of the fastest-growing film and media production center in the United States. Conveniently located a mere stone’s throw from the heart of New Orleans’ Central Business District and the world-renowned French Quarter, it is among the largest design-build, independent, full-service film and television facilities constructed in the southeastern United States. For more information, visit DeepSouthStudios.com.

About Louisiana Entertainment
Louisiana Entertainment, a division of Louisiana Economic Development, has established Louisiana as one of the top destinations in the world for motion picture production. With state-of-the-art facilities, a wealth of talent, film-friendly communities and a competitive incentive program, Louisiana is the perfect location for film and television production. For more information on Louisiana’s film, digital interactive, live performance and sound recording programs, visit LouisianaEntertainment.gov.