The New York Times says New York City’s massive subsidy of a new film studio at Manhattan’s Pier 94 on the Hudson River is “full of developer perks.” The Times quoted Tim Bartik, an economist and top national expert, who called the city subsidy “a very high bid that only seems justified if you think this project is absolutely critical to the future of the film industry in New York.”
The Times’ skepticism is right on target, especially considering that the total public subsidy per job to the Pier 94 film studio is actually 5x higher per job than what they reported — $81,152 when state film/TV handouts are included.
The Times only looked at New York City subsidies to Pier 94, but the businesses there will also reap huge amounts from the state’s lavish film and TV tax credit. Reinvent Albany added the state subsidy to the city one and found that for the next 15 years, New York City and New York State taxpayers will pay the owners and Hollywood producers using Pier 94 at least $80,000 a year for each film and TV studio job there.
New York State’s $7.7 billion film/TV tax credit reimburses producers for 30% of their production costs, including studio costs. The state also exempts film producers from sales taxes for renting a studio, the gear inside, and even the electricity that powers the lights. This is worth tens of millions more in city and state subsidies that neither we nor the Times included in our totals because the numbers are not publicly disclosed.
All this despite the major studies showing that film/TV subsidies do not create the promised effects on jobs, incomes, or economic growth. In fact, they harm residents. The massive amount of money spent on tax credits and other subsidies could have been spent on investments that actually produce benefits to the public. The film/TV industry is so politically powerful in New York that it obscures this mountain of evidence.
At least $80,000 a year in city/state subsidies to Pier 94 owners and producers per employee annually:
- 400 jobs at Pier 94 (source: NY Times)
- NYC Economic Development Corporation (EDC) subsidy = $14,333/job/year ($215,000/15 years) (source: NY Times)
- Empire State Development (ESD) subsidy* = $66,819/job/year (source: Reinvent Albany/ESD Data)
*Assumes Film/TV Tax Credit extended after current 11 year authorization, as it has for decades.
= $81,152 yearly cost per job (EDC $14,333/yr + ESD $66,819/yr)