Work on what is expected to be the largest movie studio complex in the U.S. is continuing, and a revised master plan for the project is expected soon, the studio’s CEO said Thursday.
Jake Shapiro, who took over as Medient Studios’ chief executive officer last month following a shake-up of the company’s leadership and staff, discussed proceedings and expectations with the Effingham County Industrial Development Authority. The studio has been embroiled in legal wrangling since former CEO Manu Kumaran was ousted last month in a vote by the other board of directors’ members.
“We look forward to making Effingham County and the studioplex a very exciting place that we’re all proud of,” he said. “We want this to be a member of the community in and of itself that the community can enjoy.”
There will be changes, Shapiro said, as the site of the studioplex will be moved closer to Old River Road.
“We have completely restructured the master plan and the siting of the soundstages, the office buildings, along with the public spaces,” Shapiro said. “These have been to minimize the cost and maximize the efficiencies.”
Moving the site for the soundstages closer to Old River Road could cut the infrastructure cost by as much as 70 percent, Shapiro said. The distance to travel to get the soundstages will be a matter of a few hundred yards, as opposed to much greater distances to cover. He estimated the savings in moving the studioplex site closer to Old River Road to be about a $1,000 a foot.
“These changes will lead to an expedited process for construction, the grand opening and permanent job creation here in Effingham,” he said. “It’s smarter to put the studio as close as you can to the main entrance on Old River Road. So we completely relocated that site. It decreases the time it takes to get the studios operational. These changes will lead to an expedited process.”
IDA Chairman Dennis Webb said he was encouraged by Shapiro’s presentation and is anxious for the entire IDA to get the master plan.
“It’s a more reasonable business plan,” he said. “It’s something we can grip on. They still have a long way to go, obviously. It’s critical we get the new master plan. But it looks like the people behind this company are serious, funded and ready to proceed.”
The IDA and Medient have been working on a supplemental agreement, but the IDA needs to have the master plan in hand before it can finish that document, Webb said.
Pre-production work under way
Surveying of the primary and construction roads has been completed, according to Shapiro, as has delineation of the studioplex and new construction site areas. A company hired to remove large trees has finished its work, and the outfit clearing out smaller trees is expected to be finished soon. All wetlands crossings permitted by the Army Corps of Engineers have been built and are awaiting final inspection, Shapiro added.
Shapiro added the board is committed to the Medient business plan, which calls for using the same sets and stages to film the same movie in four different languages. It also calls for using robotic cameras and permanent crews to work on films.
“I wrote the original business plan for Medient Studios, crafted the original PowerPoint presentation and I have been an evangelist for these changes in the industry that need to happen,” Shapiro. “Having spent a number of years working in the film industry, I immediately fell in love with the concept of building and constructing a modern-day studioplex facility that used its own full-time crews, creating permanent jobs, use own full-time equipment and really the cost structure made so much sense to me right off the bat.”
Shapiro also relayed remarks from board member David Paterson, the former governor of New York, and entertainment mogul Charles Koppelman.
“It is so obvious the industry is broken,” Shapiro quoted Paterson as saying. “What we have proposed is going to happen. It is pure common sense to anybody who actually looks at it. Whoever does it first is likely to make a lot of money and be really successful.”
Shapiro also read a letter from Koppelman, who expressed his regrets he couldn’t be at Thursday’s IDA meeting. In his epistle, Koppelman, who also sits on the boards of Six Flags Entertainment and the Las Vegas Sands, espoused his support for the project.
“I am pleased and impressed with the veracity and tenaciousness the current management team has exhibited. In the short time since the replacement of the company CEO, much progress and change has taken place,” he said. “We give you our full commitment that every effort will be extended to fulfill all of our commitments and together to transform Effingham County into the Hollywood of the South.”
The studio also plans to start shooting movies before the soundstages are finished.
“We have gone through a slate of films that can be shot in location in Savannah, Effingham County and our property as well,” Shapiro said. “We’re gearing up for production.”
Changes behind the scenes
Shapiro was named CEO after he and other board members voted out Kumaran. Kumaran has filed suit against the studios and the remaining board members in Nevada and was granted a temporary restraining order. A hearing on an injunction will be held later this month in Nevada, and Kumaran has asked the company be dissolved and placed into receivership.
“We put things in motion prior to the TRO being put in place,” Shapiro said. “We are adhering to the spirit and the letter of the judge. But we do believe it will be resolved quickly in our favor.”
Shapiro called Kumaran’s move a “nuisance lawsuit” and amounts to “nothing more than sour grapes.”
A shareholder also has filed suit against Medient and the studio in Effingham County Superior Court, and former vice president Jay Self has filed against the studio in Chatham County court.
The Securities and Exchange Commission issued a suspension of Medient stock trading, citing questions regarding the accuracy and adequacy of publicly available information about the company.
“The SEC had a number of questions about disclosure under the former CEO,” Shapiro said. “We have adopted a policy of overdisclosure in every aspect of our business.”
Trading of Medient stock has resumed, though its price was $.0004 at the close of Friday’s trading. The company’s wholly-owned subsidiary, Atlas International Film, filed for insolvency in Munich, Germany, according to SEC documents.
“Our stock, while down, is trading in the millions of shares again,” Shapiro said. “Again, the main issue with the SEC was one of disclosure. We have adopted a policy of overdisclosure to show we’re going to be the best Boy Scouts we can be as a public company. We’re really confident we can grow this as a public company, so our shareholders, not only are they proud, but they get an economic benefit.”
The company also has paid all outstanding invoices to vendors who had been involved with the studioplex construction.
“Many of these vendors had never been paid a penny up to this point,” Shapiro said.
Medient entered into a 20-year lease on Aug. 21, 2013 for the property with a total rent of $10 million. Under the terms of the agreement, the studio will not have to pay rent the first two years but is obligated to 18 equal annual installments beginning in February 2016. The rent will increase if the studio does not meet the stated goals of $90 million in investment and 1,000 jobs created before the end of the fifth year. Shapiro said the final total investment could top $90 million.
The studio will be moving its offices to Effingham County, Shapiro announced. They are located currently off Chatham Parkway.
“We look forward to making Effingham County and the studioplex a very exciting place,” he said.