The Effingham Industrial Development Authority remains committed to building an entrance road into its property north of Interstate 16 and off Old River Road. Whether it leads to a proposed movie studio remains a question.
IDA CEO John Henry confirmed that the Moon River Studios has signed a termination agreement for its lease on the property. Moon River Studios, which once contracted for the entire 1,560 acres, negotiated a revised lease for only 51 acres last year.
“You’re always disappointed when something you think is going to happen doesn’t happen,” said county commission Chairman Wendall Kessler. “But I think it’s bringing reality to what all of us have thought for a while.”
The termination agreement means the studio is giving up its interest in the 51 acres, and the entire tract reverts back to the IDA’s control. The bond termination went into effect Monday.
“He wants to focus on getting a movie made instead of building a studio,” Henry said of Moon River Studios chairman Jake Shapiro.
The termination on the bond lease took effect Monday, and Henry added the IDA still is willing to work with the studio in the future, should it decide to go ahead with building soundstages and offices.
The IDA board has not yet taken action on the bond lease termination agreement and is not scheduled to meet until April 21.
Moon River announced in January it will begin production on the film “Mara.”
In October, the IDA and the studios’ parent company FONU2 announced a revised lease agreement that reduced the company’s annual lease payments from $555,000 a year to $51,000 a year, to go with the less amount of property the studios planned to occupy.
Moon River’s capital investment requirement also was slashed from $90 million to $10 million over a five-year period, and the plan called for 10 stages, four warehouses, support buildings and offices to be built in the first phase.
Under the revised lease, the IDA assumed responsibility for building the entrance road and extending water lines to the property. Henry said the IDA will go forward with that work.
“Absolutely,” he said.
The IDA approved in February a $1.516 million bid from Mill Creek Construction for the 3,000-foot-long entrance road into the property.
FONU2 entered into a lease purchase agreement in February 2015 and as a result, acquired Moon River’s lease on 1,560 acres off I-16 and Old River Road.
According to the annual report filed last week with the Securities and Exchange Commission, the company’s management team intends to, subject to financing, due diligence and approval, to “vertically integrate the film production process to eliminate waste, reduce inefficiencies and maximize profitability by building a permanent full service film production facility.” The company also said it will build a studio complex to maximize efficiencies and reduce costs. The company also said it wanted to take full advantage of Georgia’s tax credits, especially those for film production, which have no sunset clause and no ceiling.
FONU2 also said in its annual report that is dropping the social commerce portion of its business in order to concentrate on movie making.
“Given the Company’s current emphasis on development of the studio, film production, rental equipment activities and other activities relating to the movie industry, the social commerce activities of the Company are not considered a priority at this time,” the annual report stated.
The IDA and what was then called Medient Studios entered into a memorandum of understanding in March 2013. Under the original terms, the IDA was to receive $10 million and with the 20-year lease, it was going to provide $1.25 million for site development. The initial projection was for the studioplex to create 1,200 jobs by the end of the first phase.
The studio was obligated to create $90 million in investment and 527 jobs within the first five years.
But 15 months later, chairman Manu Kumaran was ousted. While the company insisted it remained committed to the task of building a studio, much of the accompanying development, such as an amphitheatre, golf course, hotel and on-site housing, was shelved.
Moon River brought on board Hussey, Gay and Bell as its engineers and Foley Design Associates Architects.
Moon River had a two-picture deal with director Penny Marshall but the arrangement never materialized.
The company signed a non-binding MOU last October, reducing the size of its lease from 1,560 acres to 51 acres, with an anticipated $10 million in capital spending and the creation of 250 full-time jobs within five years.