Camden Studios updates plan, financial details for tannery project
Camden — Businessmen behind the proposal to purchase town-owned land for $1, construct two 18,000-square-foot film studios, and, in return, create 24 year-round jobs with annual wage/benefits of $40,000, have provided some details about their financing, professional backgrounds, and plans for growing the business.
The B. D‘Turman‘d Films plan involves producing 12 to 16 films over five years in one sound stage, with another sound stage to be available for additional productions, including film, television and/or network news.
The plan made public April 1 said funding for the $13 million construction project that will ultimately be known as Camden Studios will derive from a variety of sources, including their own equity, 25 percent; bank loans, 25 percent; tax credits and rebates from state film incentives, 20 percent; and sales guarantees and pre-sales of foreign territories, 30 percent.
The principals have said they are in negotiations with a “large funding source that has a very successful history of investing in the arts.” They want to begin construction of Camden Studios later this year, with the completion by April 2012. “Concurrently with the construction of the studio, the company will seek to produce two films by January 2012 via 'Location' shooting,” their plan said. “Upon the completion of Camden Studios, the enterprise will start to generate income from studio operations by leasing the premises to various film makers, commercial producers, and still photographers.”
Likewise, Brian Hodges, economic development director for Camden, has produced a list of responses to frequently asked questions (see below), questions he has been fielding in phone calls, emails and conversations on the streets since B'D' Turman'D Entertainment and the town went public on March 15 with the proposed project.
“I wanted to get information to the community in hopes of dispelling misinformation and clarifying questions and concerns raised to date,” said Hodges. He said the business proposal has broader implications for the regional economy and encourages not just Camden, but Midcoast, residents to read his answers to frequently asked questions.
That project's progress ultimately depends on approval from Camden's citizenry at a referendum vote, tentatively scheduled for May 10 in the Washington Street Conference Room. Polls will be open 8 a.m. to 8 p.m., and voting will be completed by secret ballot.
Voting will be preceded by a public hearing on the proposal scheduled for April 7 in the Camden Opera House. The purchase and sales agreement is available for review at the town office and through the link above. The closing date is scheduled for June 15.
The Camden Select Board voted unanimously at its regularly scheduled March 15 meeting to endorse a $175,000 purchase and sale agreement with B'D' Turman'D, which said it intends to develop sound stages — soundproof structures — for use in the filmmaking industry. Terms of the sale would require the Camden Studios LLC to pay the town $1. In exchange, the company would be expected to create 24 net new jobs with a combined yearly wage/benefit of $40,000 per job within five years. If that does not happen, the company must pay $175,000 to the town.
The town currently assesses the land at $450,000; last summer, however, the town had the land reappraised, with a resulting value of $175,000.
B'D' Turman'D Entertainment LLC represents Larry Reed and Jerome Turman, of Milwaukee, and Bill Ferrell, of Los Angeles, all who work in the movie and broadcast industry. Ferrell and Reed, along with their attorney, Marty Greenberg, presented their proposal for the tannery land at the March 15 meeting of the Camden Select Board.
Ferrell is expected to arrive in Camden on April 3, followed by Greenberg on Wednesday. The town is not paying for their accommodations, said Hodges, on April 1.
Hodges said B'D' Turman'D is still shopping for investors, and they will continue to try to secure a commercial lender when they return to Maine this coming week. Hodges said he did not know who the potential bank is. Additionally, the company is talking with the Finance Authority of Maine, which has business assistance programs, and in some cases, offers direct loans.
He said he remains “cautiously optimistic” about the establishment of film studios in Camden. He referred skeptics to the original intent of the tannery sale by the town of Camden, principles that include selling the site as a single parcel, marketing the site to an operation to create well-paying jobs that are year round and sustainable, and selling the site to a business that would help provide a multiplier effect in the local economy, and create a new customer base (“film studios and new media are a unique feature,” he said).
Frequently asked questions about the Camden film studio project
By Brian Hodges, Camden Economic Development Director
What exactly is this project I keep hearing about, to bring a film studio to Camden?
Camden, ME acquired the former Apollo Tannery property and invested funds into its environmental cleanup, with plans of attracting new business to locate there. A novel approach to marketing the town and site came by way of a Free Land for Jobs concept. The website, Yahoo Finance, picked up this site in Camden along with other sites across the United States. One of the company representatives saw the ad and reviewed the various sites, and was attracted to Camden.
The plan is to construct two soundstages, which will allow for movies to be shot and produced on a year-round basis in Maine. The facilities will be used primarily by this company but will also be made available to other film production companies. In addition, there are opportunities to use the facilities as spaces for screenings, concert tour rehearsals and large gatherings (e.g. functions associated with Camden Conference PopTech, etc). The company also plans to provide educational and internship opportunities for graduates of and students attending schools involved in film/television/entertainment.
What is the company?
The parent company is B. D’Turman’d Entertainment, LLC and is a start-up company based in Camden, ME. There will be two secondary companies: Camden Studios, LLC which will manage the production facilities and B. D’Turman’d Films, LLC which will manage the film production.
Who are the company principals? What is their background? Are they credible?
The three principals, and others associated with this project, have extensive experience in the film/television/entertainment industry as well as the business world. It is important to note that this is a start-up company. Therefore, B. D’Turman’d Entertainment itself does not have a history of films produced. However, the principals and their team have individually built a credible background and have assembled a strong production team of experienced film makers. The principals are listed below and their resumes/background reinforcing their credibility can be found in a public version of their business plan, available on the town’s website camdenmaine.gov under Special Reports as well as in the town office.
Bill Ferrell – Los Angeles, Calif.
Larry Reed – Milwaukee, Wis.
Jerome Turman – Milwaukee, Wis.
Where is the project going to be located?
This will be located on the former Apollo Tannery site, located at 116 Washington St. in Camden, and will abut the river path property. The area is currently vacant. When Apollo Tannery was in existence, large, commercial type buildings were located there.
What will be located on the project site?
The company is planning to construct two 18,000-square-foot buildings to be used as soundstages. There will be some parking on site, office space as well as a café which overlooks the river. The project will abut the river path property and will take advantage of the natural path area and river view.
Are there plans for other developments and/or expansions?
The company envisions a larger, campus type environment utilizing areas in and around the vacant lots. However, these ideas are not part of the initial phase to construct the two soundstages and are not being worked on as part of the immediate efforts.
When is this project expected to happen?
The company would like to begin construction during the summer of 2011 but this is contingent on obtaining financing. They also plan to begin shooting and producing a film during the same timeframe but again, contingent on obtaining financing.
Where is the funding coming from to make this project possible?
The financing for this project will be done primarily through a conventional loan with a commercial bank. At this time, a specific lender has not been identified. Additional funding for the balance of the project will be through a combination of owner’s equity, state/regional loans, and loan guarantees.
Is this a done deal? What is the process with approving the sale of the land?
To date, a purchase and sale agreement has been approved by the Select Board. The agreement must now go to the voters to be either approved or rejected. Citizens of Camden will have the opportunity to discuss the matter during a public hearing scheduled for April 7, 2011, at the Camden Opera House. A vote by secret ballot will be conducted on May 10, 2011. The vote will be to either accept or reject the sale of the property to the company, under the terms of the purchase and sale agreement.
What are the terms of the purchase and sale agreement?
A copy of the full agreement is available on the town’s website camdenmaine.gov under Special Reports, or can be obtained from the town office. A summary of the terms to be completed by Aug. 15, 2011, is as follows:
Company must have received final site plan approval from the Planning Board
Company must receive all necessary permits, licenses, and permissions from any state or federal agency with jurisdiction over the premises
Company must obtain sufficient financing to perform the purchase and development of the premises for the intended use
Camden Select Board shall have the authority to make reasonable extensions of the closing date, so long as the company has made good faith efforts and have been delayed, through no fault of their own, in obtaining financing or permit approvals
The obligation of either party (town or buyer) to close on the sale of the property is subject to the satisfaction of either party meeting the conditions of the purchase and sale agreement.
What is the selling price? Are there conditions which must be met?
The selling price is $1. However, the company must create 24 jobs with a combined yearly wage/benefit of $40,000 per job within five years. If the company does not meet this requirement within five years, they must pay the purchase price of $175,000. These conditions are also contained within the purchase and sale agreement which citizens are voting on.
This is a modification to the original description of the free land concept by reversing when the $175,000 is paid. By having the $175,000 paid, if applicable, at the end of five years, it provides a better cash flow to the company in the beginning of the project’s life cycle. In addition, the spirit of the free land concept is still met.
What if the company doesn’t get the financing lined up?
If the company does not obtain financing, or the other items as explained above, the purchase and sale agreement will be terminated and the land will remain under the ownership of the town.
It is possible that financing will not be finalized prior to the referendum on Tuesday, May 10, 2011. It is important to keep in mind that the vote on whether or not to sell the land is contingent on the company lining up their financing, in addition to the other items in the purchase and sale agreement.
Why approve a purchase and sale agreement on the land before the financing and other conditions are met?
It is necessary for the company to show banks and other investors that they have a site ready and available to locate their project. This also shows that the town, as a whole, supports the project thereby lowering the risk of those willing to loan/invest.
There seems to be a lot of speculation still. Is all this effort really economic development?
Starting a business, developing property, constructing buildings, and lining up financing is a very complex and time consuming process. These are often the end result of economic development efforts. It is customary and necessary to engage with prospective developers when there is sufficient interest and ability to develop a project. Part of the process is to educate the developer on what interest, support, and assistance the town, region, state, and other partners are able to provide. Uncertainty on the part of the town and/or developer is not uncommon. The mandate to create and hire for the position of Development Director is a reflection of the town’s interest in achieving successful economic and community development. Having this role filled facilitates conversations and provides a means to have information conveyed between all interested parties, not only for this project but future ones as well. Specific to this project, town staff is making every effort to see if it can become a reality.
What if the company does not create the jobs…what happens?
If the company does not create any of the jobs within five years, they must pay $175,000 per the terms of the contract. If they create some jobs but fewer than 24, the amount to be paid will be prorated based on percentage of jobs created.
What due diligence has been done?
The due diligence was started three months ago. After an initial presentation, the firm was asked to reformat the business and financial plan to be in line with developing the land building the studios. This was completed in February and a detailed business plan was provided to the town prior to the visit by the developers. That business plan, which has two financing components, continues to be updated and a public version has been made available. It can be found on the town’s website, camdenmaine.gov, under Special Reports as well as in the town office. The two components include financing for the sound stage itself, and financing for the films. The financing for the films fuels the revenue flow for the sound stages.
In addition, a team comprised of the town, its Interim Development Director, and the Community Economic Development Advisory Committee (CEDAC) reviewed the proposed project as it relates to the Tannery Re-Use Final Report. That report detailed a number of Guiding Principles that should be adhered to when an interested party submitted a proposal for the Tannery site. This evaluation team conducted their due diligence by ensuring the Guiding Principles were met. Due diligence will continue as the project develops and until such time as the terms of the purchase and sale agreement have been met.
Are the taxpayers backing any loans?
The town of Camden is not loaning any funds to the project. It is possible that a request may be made for a Tax Increment Financing (TIF) district to be established with some of the funds returned to the company. If this were to occur, the appropriate notifications and public hearings would be held. A town vote would be required.
Are local banks backing any of the loans?
The primary lender has not been decided upon at this time. Any lender will have its own due diligence to ensure that an acceptable level of risk is met.
If the jobs are not created and the company folds before five years, how does the town recoup the $175,000?
Under the terms of the contract, the company would be sued by the town.
How is the $40,000 job determined? Is the company allowed to annualize?
No. The conditions of the 24 net new jobs are that they pay a combined yearly wage/benefit of $40,000 per job.
What impact will this have on the town if the soundstages are constructed but the company later leaves? Is there any reuse with the buildings?
It is hopeful that this will be a successful venture and the company will produce movies as well as create jobs supporting Camden and the surrounding area. However, if the company were to depart at a future date after construction of the soundstages, there is an opportunity for reuse of the buildings. A soundstage is essentially a large warehouse and those which will be built on the Tannery site will have adjoining offices. As a result, these have the potential for many other uses and could support other businesses in a variety of industries. The value of the real estate would remain a part of the town’s tax base.
I still have questions. Who can I contact?
Please direct all questions to Camden’s Development Director, Brian Hodges. He can be reached at (207) 236-3353 ext. 103 or firstname.lastname@example.org.