Tinseltown 2.0: Las Vegas' Effort To Become A Film Hub

Could Sin City be the next Tinseltown? Two veteran commercial developers, a Nevada state senator and a Hollywood star think, with the help of carefully crafted tax incentives, the answer is a resounding yes. 

A statewide proposal up for consideration in 2025, combined with potential multibillion-dollar investments from big names in Hollywood, could add yet another layer to Las Vegas’ economy by taking film and television production in the city to the next level. 

But while the plan has the support of some major studios, it has also been in the works for years, highlighting the challenges the idea still faces. Hollywood itself is still trying to recover from a turbulent few years of production marked by strikes and pressure for companies to spend less and profit more. 

In Los Angeles, the film industry has seen a gradual decline in production since 2016, FilmLA’s Paul Audley told Bisnow last month. Although there were small spikes in production right after the lockdowns lifted and, more recently, after the threat of labor strikes in the industry dissipated, “the reality for today is, right now, this level is probably what we’re going to see for a while in production in greater LA — and it's not just here,” Audley said. 

“Folks in Hollywood keep thinking, ‘Why is LA doing so poorly?’” but the reality is that it’s much more widespread than that, Audley said.

“It's global production, all over the world. People are talking about how much production has pulled back in the last couple of years.” 

That slowdown is felt in popular filming locations like New York and Atlanta and could hamper efforts to create a new film hub in Las Vegas. But the incentive bill proposed by Nevada Sen. Roberta Lange would work to mitigate those challenges, and studios are eager to support her effort.

Warner Bros. last month announced its intent to spend $8.5B on a new campus at the University of Nevada, Las Vegas if the film incentives are approved by the state legislature.

The incentives bill, SB 496, would make up to $190M in film tax credits available every year over more than two decades. The majority of the credits are meant for two projects, those that Warner Bros. and Sony have aligned with.

“As California tax credits become scarcer to secure, the southern California film and TV industry is searching aggressively for the next place to do business,” Lange wrote in a February 2024 letter to her fellow senators.

“Southern Nevada is uniquely situated to absorb the industry’s demand,” the letter says.

Lange didn't respond to requests for comment.

The tax incentives are based on how much studios first invest. The UNLV studio project would be eligible for up to $55M in annual credits after they make $200M in capital investment, and more if they made additional investments. 

“When we were looking at Nevada, it seemed to be just a natural extension of the film industry,” Birtcher Development President Brooke Birtcher Gustafson said, highlighting the city’s proximity to Los Angeles and its history as an entertainment capital, which gives it a workforce uniquely positioned to pick up work in film and television. 

“There's [the International Alliance of Theatrical Stage Employees] that's engaged with building sets, costumes, shows and grip and lighting” for everything from hot-ticket shows to large-scale musical residencies, Birtcher Gustafson said. 

Newport Beach-based Birtcher Development has teamed up with UNLV and veteran studio developer and operator The MBS Group to build a centerpiece studio complex at the university's Harry Reid Research and Technology Park.

In March, Dallas-based Howard Hughes Holdings and its partner Sony Entertainment Pictures announced they had secured local approval for a $1.8B studio and mixed-use project in Las Vegas with actor Mark Wahlberg on board to consult. 

Wahlberg lives in Summerlin, a Howard Hughes-developed master-planned community on the outskirts of Las Vegas where the 10-building complex would be built. 

“I read an article that said he wanted to film in Las Vegas,” Howard Hughes Holdings CEO David O’Reilly said. 

“I made a few phone calls and got a meeting with him, pitched him on the idea of building a studio down the street from where he lives in Summerlin … and within 48 hours, I had a follow-up meeting with him and [Sony CEO and Chairman] Tony Vinciquerra, and we agreed to join forces and pursue this together,” O’Reilly said.

Adding a new industry would help Las Vegas on its quest to diversify its economic base away from gambling and other casino-related activities. O’Reilly and Birtcher Gustafson said the region’s dependence on gaming and hospitality had been a boon for decades, but the pandemic revealed its weaknesses. The industry has struggled to rebound, and high unemployment levels have spotlighted the need for the region to diversify its industries. 

Part of that workforce creation has to do with the studio project’s location at UNLV, which has a film school, and the plan’s focus on training that is geared toward building the film and television workforce in Las Vegas.

Howard Hughes’ studio project would be a part of the planned community the firm began building in 1990. Like Wahlberg, workers could live in the community where they work.

That’s a critical piece of the puzzle, said Andrew Woods, director of the Center for Business and Economic Research at UNLV. 

“The concern we have around film when we model this from a diversification standpoint is, are the jobs staying here?” Woods said. 

“Because if the jobs are getting up and leaving — film is very mobile — there’s not really much benefit,” Woods said. 

Lange put forth a similar but larger package to woo film and television late in the 2023 legislative session, but it didn't get a vote in either chamber. With this new proposal, Lange said lawmakers would have more time for questions and revisions.

Across the country, many states have tried with varying success to use tax incentives to entice film and television productions into their borders. A New York Times survey published in March found that states have given more than $25B to film incentive programs over the last 20 years. But there is debate over whether they succeed in generating the economic benefits they seek. 

“The film production credit is at best a break-even proposition and more likely a net cost” to the state, found a 2023 report prepared by the New York State Department of Taxation and Finance and reported on by NYT.

“Sony, companies like all the others that want to film in our studios that have approached us, only really want to film there if there's a tax credit available,” O’Reilly said. “Otherwise, they're going to end up going back to Atlanta or Canada or New Orleans or New York or New Jersey, states that have tax incentives that are competitive.”