By Valerie Baldowski
A movie studio in Henry County could generate 1,900 to 2,500 new jobs, but county residents would end up paying $2.85 million annually -- if the project fails, a study of the proposal has concluded.
The findings were reported to the Henry County Board of Commissioners Tuesday.
"This is a $60 billion industry nationally; It's a $700 million industry annually in Georgia," said Gary Mongeon, vice president of the Atlanta-based Bleakly Advisory Group, which conducted the study. He said the revenue stream potential for such an undertaking is great.
"It's getting more competitive. We had a hard time finding anyone to criticize these projects," Mongeon told commissioners. He said similar studio projects are underway, or being launched, in such cities as Detroit, Mich., Philadelphia, Pa., Shreveport, La., and Plymouth Rock, Mass. He said a studio in Wilmington, N.C., has become a tourist attraction.
"As far as the profitability, over time, it's likely the profit margins are going to be squeezed," Mongeon said of the Henry proposal. He explained that, as more studios are established, the profit margin from revenues generated could decrease because of the competition with other studios.
Businessman and developer, Billy Abbate, the managing partner of Big 5 Enterprises LLC, and Atlanta Film Studios LLC, sat throughout the presentation. He and his representatives have asked commissioners to back the industrial bonds necessary to convert six existing hangars at Tara Field in Hampton, into a movie studio. The request for industrial bond support has the endorsement of the Henry County Development Authority.
Abbate has called the studio a boon to the county. "The risk is minimal," he told the commissioners.
The Bleakly Advisory Group emphasized that, with the county committing itself to credit enhancement, and assuming that 0.4 mills is pledged, and the credit enhancement brings the interest rate down to below 5 percent -- if the projects fails, the debt-service cost would be $2.85 million annually, until the debt is paid.
Abbate said, after the meeting, that he hopes the commission will make a decision on his proposal soon. Commissioners took no action on Abbate's request during the meeting Tuesday.
"The next step is a vote on May 17," Abbate said. "We'll get an answer, yes or no, and hopefully the answer is yes. If the answer is no, and the county is not going to support us with a credit-enhanced industrial revenue bond, we'll have to look at other options for the project."
County commissioners remain skeptical about Abbate's request to improve his credit rating. "I support the project, but I also have to support the people who supported me," said District 1 Commissioner Warren Holder. "The real issue I have had from day one is the liability that will fall on taxpayers, should this project fail." Holder said there are still too many "ifs" surrounding the project. "There's a lot of potential in many businesses that have never made it," he said.
"We're in an economy where banks are not lending money; if you want to use Henry County's good name to obtain these bonds, it speeds up the process," said Henry County Commission Chairman B. J. Mathis.
District IV Commissioner Reid Bowman asked to see an audited financial statement and a development agreement, for supplemental documentation. "So far, we've heard that you have it," said Bowman. "We'd have to know that you have it." No such document was produced during the meeting.
Tuesday, Abbate said if the county turns down his request, he is prepared to approach other local governments with his proposal.