The Effingham County Industrial Development Authority cut Moon River Studios from 1,560 acres to 51 acres in a revised agreement that company head Jake Shapiro said makes him "extremely happy."
The new deal calls for Moon River, whose parent company is FONU2, to invest at least $10 million in capital and create 250 full-time jobs within five years.
That’s down from a $300 million investment and 1,000 jobs that the “studioplex” project called for when it started more than two years ago, under the name Medient.
The IDA also agreed late Thursday to sell 20 acres at Interstate 16 for a $10 million cold storage produce business that will create 35 jobs.
After a four-hour closed-door session that ended after 11 p.m., the IDA voted unanimously and without comment to move forward with the two projects.
The new deal with Moon River nullifies the previous deal and scales the project down to phase one of its master plan. Movie studios are to be built on land the IDA owns at Interstate 16 and Old River Road.
The agreement calls for 10 years of 100 percent ad valorem tax abatement with a payment in lieu of taxes of $51,000 a year.
The IDA will pay for and complete an access road and water line to the site. It will retain ownership of the road. Moon River will use a septic system.
IDA CEO John Henry said the new agreement gives Moon River the opportunity to continue its project on a smaller scale, while freeing the IDA to pursue other projects on most of the property.
Henry said the compromise is better than tying up the land for years in legal disputes.
“Nobody is entirely happy with it,” Henry said. “We’re trying to move forward in good faith.”
Moon River had failed to meet milestones required in the original agreement of a $20 million investment, 50 jobs and first stages and warehouses in operation by the end of this year.
The new agreement calls for Moon River to create and maintain 95 full-time permanent jobs by the end of year one. That number rises to 100 by the end of year two, 150 in year three, 200 in year four; and 250 in year five.
Moon River will be required to make a $2 million investment in building and equipment each year for five years.
After two years and investing at least $4 million, the company can buy the property at fair market value.
Shapiro has said the company needs only about 50 acres to produce movies and that the changes are essentially right-sizing the project.
“I’m extremely happy with what was just approved,” said Shapiro, chairman of the board of FONU2 (OTC: FONU). “We don’t need 1,560 acres to make movies.” He said the IDA will still let Moon River use the larger piece of property for filming while it is being marketed to other businesses.
He said the 51 acres can hold up to 10 stages, where the company can make five to eight films per quarter.
Shapiro said the new agreement should not delay construction. He said the permits that have been granted will still be viable. “It’s full-steam ahead,” he said.
He declined to estimate when the first studio might open, saying an announcement will be made later.
Shapiro said the company has streamlined grandiose plans that were pushed by its founder, Manu Kumaran. Original plans called for features such as a bridge over wetlands, solar trees and a glass “leaf” over an outdoor pavilion.
Shapiro said the company has aimed at more realistic goals since it was reorganized in February.
Moon River still is in default on a $600,000 subordinated note owed to AppleBox Production. The company said in an Aug. 13 filing with the Securities and Exchange Commission that the default would be cured “shortly.”
More than two months later, Shapiro said this week that the default will be addressed “in the immediate future.”
The company touted the acquisition of AppleBox as a major step in its efforts to build film production studios in Effingham. AppleBox has the equipment needed to make movies, including cameras, trucks, lights and generators. Moon River has said it will use the equipment on its own movie projects and rent it to other movie makers.
Moon River announced earlier this week that it will make a documentary on legendary singer James Brown.
In other action Thursday night, the IDA approved the sale of 20 acres at its Coastline site on Interstate 16 to Savannah Cold Storage for $190,000.
The new company plans a 100,000-square-foot cold storage and packing business that will cater to food producers shipping in and out of the Savannah port.
The building and land will cost a total of $10 million, said Brian Kastick, president and general manager of another, separate business – Oso Sweet, which sells onions.
Kastick said the new business will handle produce, beverages and pharmaceuticals that need to be kept cool, from 33 degrees to 65 degrees.
Kastick said he and several partners hope to begin construction on the building soon and open in 2016. He said hiring should begin 45 days before the facility opens.
The 35 jobs will pay an average of $39,000 a year. The goal is to double the number of jobs by 2020.
The company also will have a 36-month option to buy another 163 acres at the site for $1 million. The option will vest when 30 full-time jobs are created and $10 million is invested in the project.
Substantial construction must have begun within 12 months or the option may be removed.