Netflix to Invest $905M to Transform Vacant NJ Army Base into East Coast Production Hub
By: Fern Sidman
Streaming giant Netflix will invest $905 million to transform a vacant Army base in New Jersey into its East Coast production hub, as was reported by the New York Post on Thursday.
Netflix said it paid $55 million for the 292-acre Fort Monmouth base, located about 60 miles south of Manhattan, the Post reported.
The 96-year-old army base — used by the United States to develop radar technology and where a civilian engineer, Julius Rosenberg, infamously began his espionage career — was closed by the Pentagon in 2011 as the military cut spending, as was reported by the New York Times.
Back in June of this year, Fox Business News reported that Netflix’s announcement came after New Jersey Governor Phil Murphy sent a letter to Hollywood film studios in April, including Netflix, Disney and Warner Brothers, in an effort to lure them away from Georgia after the state approved a controversial voting law.
“I am incredibly excited to hear about Netflix’s proposed investment,” Governor Murphy said in a statement In October 2021. “While there is an objective process that any and all applications will have to go through, this is yet more evidence that the economic plan my administration has laid out is working and bringing high-quality, good-paying jobs to our state.”
“America’s first movie studio was in New Jersey, and today it’s home to many talented people working in entertainment,” Netflix told FOX Business at the time. “Gov. Murphy and the state’s legislative leaders have created a business environment that’s welcomed film and television production back to the state, and we’re excited to submit our bid to transform Fort Monmouth into a state-of-the-art production facility.”
New Jersey has a long relationship with Hollywood. Thomas Edison started what is considered to be the nation’s first film studio in West Orange in 1893. The state’s political winds, however, have not always been favorable to the entertainment industry, according to the NYT report.
The Post also reported on Thursday that Netflix plans to invest nearly $850 million in the community to develop the state-of-the-art production studio, which will include 12 soundstages.
“We believe a Netflix studio can boost the local and state economy with thousands of new jobs and billions in economic output, while sparking a vibrant production ecosystem in New Jersey,” said Ted Sarandos, Netflix co-CEO and chief content officer, in announcing the deal Wednesday, the Post reported.
New Jersey Gov. Phil Murphy said Netflix’s arrival will create more than 1,500 permanent production jobs in the area, as well as 3,500 construction jobs.
“This transformative investment will serve as a cornerstone in our efforts to create a thriving industry from whole cloth,” Murphy said, according to the Post report. “As a result of nearly a billion dollars in film production spending, New Jersey will further solidify its status as an emerging national leader in the television and film industries.”
Murphy also said the project will create new housing, hotel and film-related businesses in the area, which has suffered economically since the Army closed the base in 2011, the Post reported.
Netflix has a studio located in the Bushwick section of Brooklyn which was opened in 2021, according to the Times report. The streaming giant also has studios in such places as Georgia, California, New Mexico, British Columbia and Toronto.
The Post reported that the New Jersey project is set to be completed in two phases over the course of several years.
“I think we certainly needed an East Coast production hub,” Netflix director of content and studio affairs Rajiv Dalal told The Hollywood Reporter, as was reported by the Post. “And given the talented crew base in New Jersey that have worked on our titles in New York, but live in New Jersey, the multiplicity of great scenic backdrops, the proximity to major metropolitan areas and the fact that we were able to get a large swath of land close to 300 acres. Those were key decision drivers.”
New Jersey’s Film and Television Commission said that a a record $80 million was brought into the state’s coffers last year due to 725 productions taking place there.
Netflix has had their share of problems over the last year. In September, the Jewish Voice reported that the streaming giant recently put new leadership in place over its Animation Film team by adding new vice presidents Karen Toliver and Traci Balthazor. And one of their first moves was to layoff an additional 30 employees, Deadline reported.
However, a list of animated series and specials had already been called off in previous cost-cutting measures, including the proposed animated series by Meghan Markle and Prince Harry that had been greenlighted, as well as Dino Daycare from executive producer Chris Nee, and the adventure series Boons and Curses.
The tech giant has faced a serious downturn this year. It reported that it lost 200,000 subscribers during the first quarter this year. Netflix expects to lose a staggering $2 million more before 2022 is over and morale is reportedly low.
Netflix has already engaged in multiple rounds of layoffs and also cut down on staffers at its in-house fan site Tudum only five months after launching the division.
In May, it was reported that Netflix was the S&P 500’s worst performing stock. That same month, the company’s shares fell seven percent on the news of more bad subscriber data.
So far, no more project cancellations have been announced, though, as projects remain on track including Apollo 10 ½: A Space Age Childhood from Richard Linklater, Guillermo del Toro’s Pinocchio, an Aardman sequel to Chicken Run, and more.
The property, dubbed the Mega Parcel has been appraised for $54 million by the Fort Monmouth Economic Revitalization Authority (FMERA), as was reported by Fox Business News. Netflix had been bidding with other very interested developers for the New Jersey property and the NYT reported that several developers previously offered more than $100 million for just 89 acres of the 1,126-acre Army base.
In addition to Netflix, three other firms had submitted bids: Extell Acquisitions LLC, Mega Parcel Development LLC and RDR Partners LLC. Fox Business News reported that both FMERA and Netflix declined to provide additional information on the bid.
Fox Business News reported that in addition to Netflix’s interest in the Garden State, Lions Gate Entertainment recently announced plans to build a $125 million production studio in Newark, New Jersey. Lionsgate’s facility is expected to begin operations in late 2024, create more than 600 new long-term jobs for Newark residents and generate more than $800 million in annual economic impact for the city and state.
