New Jersey has aggressively positioned itself as a premier destination for film and television production. The Film & Digital Media Tax Credit Program is the engine driving this growth, offering some of the most competitive incentives in the country.
The Opportunity for Developers
While the credits primarily target production companies, the real estate opportunity lies in building the infrastructure they need: soundstages, post-production facilities, and support spaces.
Key Incentive: The Infrastructure Bonus
The program doesn't just pay for filming; it incentivizes the construction of "film-lease partner facilities." Developers who build qualified studio space can offer tenants a competitive edge, as productions filming in these facilities qualify for enhanced tax credits.
Program Structure
The program is divided into two main components:
- Film Tax Credit: Up to 35% transferable tax credit on qualified film production expenses (plus a 2% or 4% diversity bonus).
- Digital Media Tax Credit: Up to 20% or 25% transferable tax credit on qualified digital media production expenses.
Geographic Bonuses
Similar to other NJEDA programs, geography matters. Productions filming in certain southern New Jersey counties can receive an additional 5% bonus, bringing the potential total credit to nearly 40%.
Studio Partner Designation
For large-scale developments, the "Studio Partner" designation is the holy grail. It requires a commitment to occupy at least 250,000 square feet of studio space for at least 10 years. In exchange, the state creates a separate pool of tax credits specifically for these partners, ensuring availability and predictability.
Monetization
Like the Emerge and ASPIRE credits, Film Tax Credits are transferable. They can be sold to other New Jersey corporate taxpayers, typically at 88-92 cents on the dollar. This liquidity makes them a powerful financing tool for the tenant, which supports higher rental rates for the developer.
Conclusion
The demand for Class A studio space currently outstrips supply. By understanding the nuances of the Film Tax Credit program, developers can build facilities that are not just buildings, but financial assets for their future tenants.