Long overlooked by much of the industry, New Jersey offers generous film and tax incentives that Paramount is tapping into by signing a 10-year lease to occupy more than 285,000 square feet in a new production facility that’s under construction.

1888 Studios is a 1.6-million-square-foot film and TV production facility being built in Bayonne. When it opens, it will have 23 smart sound stages, post-production space, offices and lighting facilities. Paramount signed a lease because it wants to access New Jersey’s program offering a tax credit of up to 40% to “studio partners” that control a production facility at least 250,000 square feet in size for at least 10 years. Companies that qualify as studio partners have access to US$150 million in incentives, which can be used to cover above-the-line wage and salary payments. 

This enhanced 40% credit (previously 35%) was introduced in June. Only three companies will be granted a studio partner designation, and Paramount wants to be one of them. The New Jersey Economic Development Authority is reviewing its application and the org’s board will consider it on October 30. 

New Jersey’s typical tax credit is between 30% and 35% for certain expenses incurred by film and digital media productions in the state. It also has an additional sales tax exemption for some film and TV production expenses, including long-term hotel rentals. 

The state saw a huge surge in spending on feature films in the first half of this year—almost 200% year over year. And notably, New Jersey is the only state to see such growth. But its production industry has been on the rise since 2018, when a Film and Digital Media Tax Credit program was reinstated, according to the New Jersey government. “By attracting world-class studios and productions, we are not only creating high-quality jobs, promoting infrastructure and driving economic growth; we are also investing in our communities and elevating New Jersey as a national leader in entertainment,” said governor Phil Murphy. 

Back in May, Netflix broke ground on its own production facility in the Garden State that will eventually span nearly 500,000 square feet. 

Paramount’s chief strategy and operating officer Andy Gordon praised New Jersey’s tax credit, and noted that scaling its production capabilities is part of the company’s long-term strategy. “Thanks to highly competitive tax credit programs like New Jersey’s, the tri-state area is more attractive than ever before for production as we work together to create new jobs and empower more domestic production for America’s creative workforce,” said Gordon.

Animated image of what 1888 Studios could look like courtesy of 1888 Studios.