Netflix is purchasing a former New Jersey Army base to build one of the world’s largest production facilities.
The Fort Monmouth Economic Revitalization Authority (FMERA) voted on Wednesday to enter into a sales contract with the streaming company to purchase Fort Monmouth’s Mega Parcel for $55 million. FMERA is the state agency in charge of redeveloping Fort Monmouth, which the US Army closed in 2011.
Netflix has stated that it will invest up to $850 million in the construction of a cutting-edge production facility with 12 sound stages, ancillary production spaces, and back lots, similar in size and scope to its New Mexico studios, to produce TV shows and films, including originals. Production will also go on location at scenic locations throughout the state on occasion.
“This will be a key focal point for us and our East Coast production hub,” said Netflix’s director of content and studio affairs, Rajiv Dalal.
The economic impact of Netflix
Netflix estimates that it will generate between $7.4 billion and $8.9 billion in output for production and construction over the next 20 years. It estimates that the value added to New Jersey’s economy as a direct result of that activity during that same time period would be between $3.8 billion and $4.6 billion.
During peak construction, Netflix estimates that the project will create up to 3,500 jobs. Netflix production is expected to contribute between 1,400 and 2,200 jobs per year once the studio is fully operational.
Furthermore, Netflix anticipates a significant ripple effect as the production hub may stimulate private sector capital investment in adjacent industry infrastructure and businesses, such as post-production and other digital facilities and services.
New Jersey is emerging as a Hollywood hotspot.
In a news release issued after the approval, New Jersey Gov. Phil Murphy called the investment transformative and a cornerstone in the state’s efforts to create a thriving industry. In total, 725 productions were held in New Jersey in 2021, including 68 feature films and 132 television series.
“New Jersey will further solidify its status as an emerging national leader in the television and film industries as a result of nearly a billion dollars in film production spending,” Murphy said.
According to the New Jersey Economic Development Authority, the state’s Film and Television Commission’s annual report found that film and television production in New Jersey shattered all previous records in 2021, with the industry spending more than $500 million in the state and creating more than 5,500 jobs.
Why did Netflix prefer New Jersey to Georgia?
Netflix broke protocol two months ago when it announced it had been chosen as the winning bid in a pool of several developers vying for Fort Monmouth’s Mega Parcel, a 300-acre parcel in Eatontown and Oceanport.
Murphy wrote a letter to major Hollywood studios like Disney, Warner Bros., and Netflix in April 2021, attempting to entice them away from Georgia following a fight over changes to voter registration laws there.
Murphy provided the companies with competitive tax breaks as part of a $14.5 billion economic incentive package that “makes the Garden State just as competitive as Georgia to attract film and television production businesses,” according to Murphy’s letter.
Murphy emphasised the New Jersey Film and Digital Media Tax Credit programme, which he signed into law in 2018 to entice film and television studios and productions to locate in the state.
While the tax breaks Murphy offered certainly piqued Netflix’s interest, one of the most compelling selling points was the land. Dalal stated that it is difficult to find a “large swath of land” near a major metropolitan area such as New York City.
Netflix was also drawn to New Jersey’s workforce, which Dalal claims has top-tier crews and a vibrant creative sector that the company plans to tap into and enrich.
When will the construction of the studio begin?
There is still a long way to go before the streaming giant builds studios at the old fort. Before closing on the property, Netflix has a 36-month window to complete its due diligence and obtain local approvals.
During the due diligence period, developers have walked away from various properties at the fort. Developers proposed residential and commercial developments on the 80-acre Parcel B twice but failed to close on the site both times.
