(Noted News) — Taking advantage of juicy corporate tax incentives offered by the state of New Mexico, Netflix has built a massive studio by Mesa Del Sol, a 12,900-acre space in Albuquerque.
The streaming giant will also be receiving a substantial amount of other incentives. This includes $10 million from New Mexico’s Local Economic Development Act (LEDA) fund, another $4.5 million from Albuquerque that they received in 2018, $17 million from the state, and another $7 million from the city in Albuquerque. Netflix will be receiving ongoing tax credits that get bigger as production grows. The company has promised to stay in Albuquerque for at least 10 years, and in return gets 35-30% reimbursement from the state for every shoot.
Netflix Co-CEO Ted Sarandos said in a statement, “New Mexico provides an outstanding production and business environment in close proximity to Los Angeles with some of the best crews and creative talent in the world. The expansion will bring many new high-tech and production jobs to the region. It allows us to be more nimble in executing our production plans while cementing the status of the region as one of the leading production centers in North America.”
Mesa del Sol is an urbanist expansion project headed by development firm Forest City Covington with a 40-year master plan to cover at least 9,000 acres of the site with development. The rest of the land is to be used for parks and open space. Mesa del Sol is expected to house at least 100,000 people, providing inhabitants with a downtown area, 37,500 homes, 18,000,000 square feet worth of office space, 4,400 acres of residential housing, and another 800 acres for schools and universities.
Mesa del Sol already has a sizable office space reserved for financial services giant Fidelity, and is ready to house thousands of new film talent workers in its rental suites.
Video streaming is booming, making all of its biggest players like Apple, HBO, and Disney compete with each other for real estate. New Mexico is providing lower prices and lower taxes while still being close to some of the other necessary infrastructure of the film industry in Los Angeles.
Presumably needing to stand out from the competition, Albuquerque mayor Tim Keller said in a statement that Netflix had agreed to certain conditions on the agreement.
“As part of the proposed investment in the region, and in an effort to continue to grow and scale up the crew base and talent pool, Netflix has committed to provide training programs for below-the-line positions in partnership with the New Mexico Film Office, local universities, and labor and industry organizations. Additionally, in partnership with the New Mexico Film Office, Netflix has committed to supporting New Mexico’s Native American, Latino, Black, and other underrepresented groups’ content creators and filmmakers.”
“If you’re looking for New Mexico’s future, I think you look at the areas around the airport and Mesa because that is where New Mexico is going,” said Albuquerque City Council President Pat Davis said while the deal was being approved.
As well as committing an additional $1 billion in production funding—which makes a total of $2 billion in New Mexico by 2033—Netflix plans to invest over $500 million over the next 10 years to make improvements at ABQ Studios.
The capital expenditures will happen in two separate phases: They include $150 million for already identified projects that will move forward in the next two or three years, according to its project participation agreement with the city of Albuquerque.
Critics of New Mexico’s deal say the subsidy can be seen as a “swindle,” or a way for billion-dollar companies like Netflix to make a quick buck off taxpayer money before moving on to another state to do the same thing. Pat Garofalo, a critic of government subsidies, writes:
“The quick version is that since the film industry is so transient, providing tax breaks to film production ends up mostly renting jobs for a short while, until another state comes along that is willing to pay more. And because a lot of these positions are short-term—as it doesn’t take all that long to film a movie or a season of a TV show—it takes a lot of productions, and therefore a lot of subsidizing, to generate the equivalent of full-time work for a substantial number of folks.”
Nonetheless, Netflix’s expansion into New Mexico carries on, with a new booming film and television culture in works, partially thanks to hit TV shows being filmed in the state like Breaking Bad and Better Call Saul, and public officials remain optimistic.