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Is Devens Going Hollywood?

Film studio casts Jackson Road land as star attraction

August 4, 2011 : Nashoba Publishing, by Mary E. Arata

DEVENS – On Nov. 16, a star was born when MJM Development, LLC, became a legally formed corporation with the secretary of state’s office. Its sole named agent is Michael J. Meyers of Andover, a former hotel executive who has become the public face of a private effort to hit the big time.

MJM has announced plans to construct a 28-acre Hollywood-style movie and television production studio on Jackson Road within a short walk to the Route 2 entrance to Devens. It’s estimated to be a 10-year, $104 million, three-phase project to occupy 603,000 square feet.

Meyers is holding the identity of the case of a half-dozen players close to the vest.

“We try to fly under the radar,” he said with a laugh. “We’re just beginning to do the due diligence. We haven’t even consummated the deal yet.”

But Meyers stresses the MJM Development deal on Devens is “100 percent equity-financed.”

“It’s not like Boston’s Filene’s Basement,” he added.

Work to redevelop the Downtown Crossing parcel screeched to a halt when developer Vornado lost its financing, leaving an unattractive pockmark in Boston landscape.

“This is a prudent development that minimizes risk based on our planned phasing,” he added. “We have our dough. … Muhammad Ali said, ‘It ain’t showin’ off it you can do it.”

Meyers said Devens was immediately attractive.

“It’s hard to find 28 acres with those types of attributes – privacy and infrastructure,” he said, adding that Devens has “star power” in the form of its own power plant.

“Studios use a ton of power,” he said. “Military bases are good for making bombs and having a lot of power. That’s a huge win for us.”

Such a studio would be a first in Massachusetts. The closest similar studio is in New York.

Despite the lack of year-round sunshine available in Hollywood, Meyers said New England’s four seasons are a positive.

“Right now, there’s a lot of exterior shooting going on and the other (post-production) work goes to warm climates,” Meyers said.

With a full-service studio at Devens, “You’d have a greater incentive for interior shooting here, too. What we want to do is to have one-stop shopping and stop losing business that goes back to other states. We want to service the entire scope of the film in Massachusetts and sustain that spending in Massachusetts.”

On July 14, the MassDevelopment board of directors voted to enter negotiations with MJM for the sale of the 15-acre wooded parcel on Jackson Road known as Lot No. 13. Access to the land would be via Hospital Road. MassDevelopment also voted to negotiate an option for MJM to later purchase the abutting 12-acre parcel No. 14, which is cleared and fronts directly on Jackson Road.

Unlike Evergreen Solar, which has a land lease, this will be for the sale of the “fee” interest in the land to MJM Development.

Richard Henderson, executive vice president for real estate for MassDevelopment, hopes the closing would occur by year’s end. Meyers hopes for a groundbreaking next spring. The deal would be contingent upon permitting by the Devens Enterprise Commission, which prides itself on its fast-track review process.

It’s a hilly piece of land, so Henderson predicts there’d be “quite a bit of earth-moving.”

Phased construction, TIF

The $30 million, 126,000-square-foot Phase 1 includes the construction of four separate 18,000-square-foot Hollywood-style sound stages, 30,000 square feet of space for production support, 20,000 square feet for storage, and 4,000 square feet for “sound-stage support.”

A $37 million, 156,000-square-foot Phase 2 is nearly identical to Phase 1 and would double the number of sound stages. And there’s a $38 million Phase 3 project that would include 90,000 square feet for executive offices, 15,000 square feet for screening theaters, and 216,000 square feet for a 600-car parking lot.

Likewise, there would be a phased-in $5 million tax-increment financing, or TIF, deal provided by MassDevelopment.

“It’s structured in such a way that they’d only get the full $5 million over 20 years if they build all three phases,” Henderson said.

The TIF is also tied to the retention of at least 70 percent of the promised 44 jobs expected at full build-out.

“If the first phase is $20 million of assessed value, I get a TIF of 6 percent of the hard construction costs of the assessed value,” Meyers said. “If I stop right there, the TIF never goes beyond $1.2 million.”

Said Henderson, “Most of the jobs associated with the studios would be associated with the production companies that would be renting space in the studios, and that’s hundreds and hundreds of jobs, but the facility operator would be maintaining the jobs for those running the facility. The big job creation is really with the goal of making films in the building.”

Meyers said the draw for tenants will be the Massachusetts film tax credit. Meyers said he has met with the Patrick administration and feels secure in its commitment to keeping the tax credit intact.

“Could it be amended in the meantime? Yeah, it could be,” he said. “We’ve had meetings all the way up to the highest economic development officials in the state who’ve assured me that’s not their agenda. They want to be very supportive of the industry.”

Meyers said a study by UMass and MIT supports the notion that for every one film-industry job created, there’d be a spinoff benefit of another job created outside the industry.

“Almost one-to one,” Meyers said. “Caterers, vehicle-rental people, lumber yards, hair stylists – all sorts of different enterprises. It’s a huge win for the local community.”

Can the area provide those services?

“It’ll giddy-up in a hurry,” Meyers said. “People get pretty creative right away. I don’t think that will be a problem.”

In the long term, Meyers projects there could be as many as 110 employees for each of the eight sound stages.

“That’s 800-plus W-2′s coming off that site on an annual basis,” he said.

Meyers had no concern over whether the Devens Regional Enterprise Zone (DREZ) should become its own town or have lands reassumed by Ayer, Harvard and/or Shirley.

“We’ve been treated absolutely with the most respect and everyone’s been very fair and open and honest,” said Meyers. He heaped praise in particular on MassDevelopment Vice President for Devens Operations George Ramirez and the Devens team.

The Jackson Road site falls within the historical bounds of Harvard. That town’s selectmen have formed a Devens Economic Advisory Team (DEAT) to examine the revenue generated and costs associated with properties on Devens that fall within the town limits, though the DREZ is managed by MassDevelopment.

DEAT Chairman Victor Normand, himself a former decade-long MassDevelopment real-estate and marketing official at Devens, said of the studio, “This would have to be seen as a positive development.”

Normand said the development would increase the taxable real estate at Devens, helping to close the $1 million revenue gap identified by the DEAT. Also, the movie studio would not be otherwise a drain on municipal services.

Finally, the TIF terms, depending on its annual distribution, seems “reasonable.”

“I would like to see this as an all-around positive development,” Harvard Selectmen Chairwoman Marie Sobalvarro said. “For me, with a municipal perspective, I’d like to see Devens become an economic engine for jobs benefiting the region.

“This is a step at two full-time jobs per acre,” she added, noting the minimal demands on municipal services.

“If a lack of studio space for filming has been the hurdle to have more television and commercial filming in Massachusetts, this could be great,” she said. “And, of course, the converse is true.”

Sobalvarro questioned if the state film tax credit really drove up the number of productions in state, but said since it may have had no measurable effect, “I’m not really worried if it goes away.”

However, with two hotels at Devens, Sobalvarro said it may be time to revive talk of a local hotel and meals tax for Devens, “which could recoup some of MassDevelopment’s possible and/or prospective losses for a venture such as this.”

© Copyright 2011 Nashoba Publishing.