The once grandiose plans for a massive movie studio complex in Effingham County appear to be getting a drastic cut.
Effingham Industrial Development Authority members, following a lengthy meeting Thursday night, have reduced the amount of land committed to Moon River Studios to 51 acres, rather than the 1,560 acres in the original lease.
The new deal was agreed upon mutually, said IDA CEO John Henry.
“We’ll monitor their progress on that project and if they are successful, we’ll certainly work with them moving forward,” Henry said Friday morning.
Henry said the revised deal, which nullified the existing memorandum of understanding and supplemental agreement, was done in an effort to “assess where we are and where they are” while attempting to protect the taxpayers’ investment in the land and act in good faith.
The master plan for the project was approved by county commissioners in July and the first contracts for work on the site were awarded in August.
With Thursday night’s action, the IDA regains the balance of the land.
“We can move forward with the road, water lines and power,” Henry said.
With the property dedicated to its uses, the studio plans to build 10 stages, four warehouses, support buildings and offices. The lease payments will be reduced from $555,000 annually to $51,000 per year and the studio will be required to make a capital investment of $10 million over a five-year period.
“We have been working hard and in tandem with the IDA to finalize a plan that was a win-win for all parties and that was structured for success with reasonable and attainable goals,” FONU2 board chairman Jake Shapiro said in a release. “The 10 stages approved in the phase one of the master plan could theoretically support five to eight films per quarter, or 20-plus feature films per year. I believe with this new agreement, the project is better ‘scaled for success.’”
Under its previous management and name, Medient Studios, the IDA and the company signed a memorandum of understanding in March 2013 for 1,560 acres between Old River Road and I-16. The IDA approved a $300 million bond package, maturing in July 2033, with a 6 percent interest. As part of the August 2013 lease agreement for the property, no interest and no payments were due for the first two years, with the total rent of $10 million to be paid in 18 installments starting Feb. 28, 2016.
If the company does not reach the goals of $90 million investment or 1,000 jobs created before the end of the fifth year, it must pay additional lease payments, under the terms of the August 2013 agreement. The value of the 1,560 acres was estimated to be $22.1 million.
Medient announced Shore Development and Construction had been contracted as the construction manager in March 2014. Following a shakeup in the leadership two months later, Choate Construction was brought on board as construction manager.
Joseph Giamichael, who was on the original Medient board of directors, was elected to the FONU2 board on March 1 but resigned his seat as a FONU2 board member last month. Charles Koppelman, who was named to the Medient board in Dec ember 2013, relinquished his spot in February of this year. Matthew Mellon was appointed to the board in 2013 but resigned from the company in January 2014.
Kumaran was ousted from his role as CEO of Medient Studios in June 2014.
Shapiro was named CEO, and Koppelman took over as chairman of the board. The company changed its name in late August 2014 to Moon River Studios and in February, FONU2 acquired the Moon River Studios’ lease for $10 million.
The studio has filed to be eligible for EB-5 financing, which opens domestic projects to foreign investors, who then have their applications for visas expedited.
Effingham County commissioners approved the project’s master plan in July, and Shapiro said he anticipates the first soundstages to be built in the first quarter of 2016.