Island Film Group (IFG), a Hawaii-based partnership with local, national and international projects under its belt, has been chosen as the entity to design, build, finance and operate a film and television production studio, next door to University of Hawaii-West Oahu in Kapolei. And by “studio,” we mean “village” — in that this venue is expected to have units where employees can live and work, shops, restaurants, short-term rental units and office space, in addition to the modern soundstages, sets and equipment required to put a film together from beginning to end within Hawaii.

A contract must be negotiated before the deal is final, but once complete, the project is expected to cost upward of $100 million — which perhaps, not so coincidentally, is the cut-off for investment being considered in City Council Bill 59, creating Honolulu-based tax credits for studio operations.

IFG has a long history of working with and in Hawaii, rising to prominence with its backing of “Princess Kaiulani,” which was released in 2009. As a production company, it provides services for island-themed TV commercials, including for Disney’s Aulani resort and First Hawaiian Bank. The company has invested hundreds of thousands of dollars into renovations of its studio and production facilities and equipment in the islands, serving a steady stream of projects.

IFG also, notably, has a deep understanding of Hawaii’s incentive programs for film production, having developed a specialty in working with independent and studio TV and film projects to qualify for Hawaii state film tax credits. Because these credits entice productions to the islands, the state in 2019 raised its tax credit limit from $35 million to $50 million, and extended the program to 2033 with widened eligibility rules in 2022.

A thriving island film industry can employ thousands of Hawaii workers and circulate millions of dollars into the local economy, and this commitment by UH, the state and Island Film Group is a welcome investment in that potential.

A Hawaii Film Office report on film and digital media production notes that 28 productions qualified for tax credits in 2023, based on more than $196 million in spending. This produced about $339.6 million in estimated “sales or economic activity” during a down year, because of the Writers Guild and Screen Actors Guild strikes.

In 2022, the film industry generated a record-setting $480 million in Hawaii — and Honolulu, properly, wants to continue drawing that kind of economic activity.

Mayor Rick Blangiardi backs city incentives for a new film studio because of the potential for this multiplier effect. Last year, supporting Bill 59, Blangiardi predicted a new studio could cause 2022 revenues to double. “We’re looking at more than a $1 billion business,” he said. “And I’m looking at creating a lot of great jobs, high-paying jobs.”

Bill 59 would exempt a studio project from property taxes on the assessed building value while under construction, for up to five years; and also exempt the studio facility from property tax for up to 20 years, so long as the studio operator promotes local workforce development with paid internships or apprenticeships and provides other public benefits. Estimates of the tax revenue lost to these exemptions reach as high as $1 million annually. However, this “lost” revenue is theoretical: Vacant property generates no taxes, and the projected film studio site has been vacant for many years.

This year’s City Council is still delving into particulars of the benefits to the city for supporting a studio build — but based on revenues generated by media projects receiving state tax incentives over the years, it pencils out. City support for a thriving and financially healthy film studio project will reap benefits for decades to come, in increased economic activity and a diversified workforce. It should be offered.