Property tax break for building a film studio

(a) Definitions. For the purposes of this section, the following definitions apply unless the context clearly indicates or requires a different meaning. Film Studio Facility. A building or complex of buildings and associated back-lot facilities on real property situated within the geographic boundary of the city in which pre-production, production, and post-production activities occur, which contain at least one sound stage; pre-production, production, and post-production offices; catering or dining facilities; parking; facades; and mill space, and which is closed to the general public and is within a footprint of the site plan that forms a secure compound that is clearly delineated with a tall perimeter enclosure. The term excludes buildings and facilities that are not used for pre-production, production, and post-production activities, but are constructed or used in connection with the film studio facility, including hotel and lodging facilities, or portions thereof. Post-Production. Has the same meaning as defined in § 8-10.36 (a). Pre-Production. Has the same meaning as defined in § 8-10.36 (a). Production. Has the same meaning as defined in § 8-10.36 (a). Property Owner or Owner. Has the same meaning as defined in § 8-6.3 , except that the remaining term of the lease of a lessee claiming an exemption must be a minimum of 20 years; provided that the lease: (1) Has been duly entered into and recorded in the State bureau of conveyances, or the office of the assistant registrar of the land court, or both, as appropriate; and (2) Provides that the lessee shall pay all real property taxes levied on the property during the term of the lease. Qualifying Construction. The construction of a new film studio facility that: (1) Is located on real property a minimum of 10 acres in size and situated within the geographic boundary of the city, that has been leased or purchased from the United States, the State, or the city within five years of the application for the exemption; (2) Is constructed in accordance with land use and labor statutes, ordinances, rules, and regulations, as applicable, including Title 12, Chapter 22, Hawaii Administrative Rules; provided that if specialty construction is involved, a project labor agreement for the specialty construction work must be negotiated and executed between the applicable construction unions and the specialty construction contractors or subcontractors; and (3) Has a minimum of $100,000,000 in actual costs to design and construct a film studio facility. Specialty Construction. The construction, assembly, or installation of equipment or systems for which a specific vendor or supplier has notable expertise, and local labor is not trained or experienced to construct, assemble, or install. (b) The assessed building value of a new film studio facility will be exempt from property taxes during construction; provided that the owner files a claim for exemption with the director, on a form prescribed by the director, on or before September 30 preceding the first tax year for which the exemption is claimed. The claim for exemption must be accompanied by documentation evidencing that the construction of the film studio facility is qualifying construction, including documents evidencing that: (1) A minimum $100,000,000 financial commitment was made to design and construct the film studio facility in the city; (2) Building permits were issued for the development and construction of the new film studio facility, in accordance with the construction and building permit plans for the film studio facility; (3) The land on which the film studio facility is located was leased or purchased from the United States, State, or city within five years of the application for the exemption; (4) The owner is registered and in good standing with the State department of commerce and consumer affairs; (5) A site plan has been prepared for the proposed film studio facility; and (6) Construction of the film studio facility and all appurtenant buildings, facilities, and grounds within the film studio facility must be performed in accordance with land use and labor statutes, ordinances, rules, and regulations, as applicable, including the payment of wages that are not less than the rates for classifications stated in the wage rate schedule bulletin posted on the State department of labor and industrial relations website, or if a classification is not set forth in the wage rate schedule bulletin, then the prevailing local area standard wage; provided that if specialty construction is involved, a project labor agreement for the specialty construction work must be negotiated and executed between the construction unions holding the applicable jurisdiction over the scope of the work and the specialty construction contractors or subcontractors. If the construction of the new film studio facility involves more than one zoning lot or parcel, the owner shall file a separate claim for exemption for each zoning lot or parcel that has an assigned tax map key number, together with a copy of a conditional use permit for joint development and a joint development agreement approved pursuant to § 21-5.380 . (c) The claim for exemption, once allowed, will expire: (1) Within five calendar years after the claim for exemption has been accepted by the director, if design of the new film studio facility has not commenced within the five-year period; (2) Within 10 calendar years after the claim for exemption has been accepted by the director, if construction of the new film studio facility has not been completed within the 10-year period; or (3) Upon the issuance of a certificate of occupancy for the new film studio facility by the department of planning and permitting; whichever occurs first. The director may extend the exemption period for up to one year if the owner demonstrates good cause for the extension. (d) The owner shall provide written notice to the director within 30 days after the owner or property ceases to qualify for an exemption. (1) The written notice will have the effect of voiding the claim for exemption previously filed. The written notice is sufficient if it identifies the property involved, states the change in facts or status, and requests that the claim for exemption previously filed be voided. (2) Failure to provide the requisite written notice to the director within 60 days after the owner or property ceases to qualify for the exemption may subject the owner to a penalty. Failure to provide the written notice to the director prior to the following November 1 will subject the owner to a penalty of $1,000 on November 2 preceding the tax year for which the owner or the property no longer qualifies for the exemption, and on November 2 of each year thereafter that written notice of the change in exemption status is not provided to the director. In addition to this penalty, the taxes due on the property plus any additional penalties and interest thereon will be a paramount lien on the property as provided for by this chapter. (e) The claim for exemption may be canceled by the director: (1) When the building permit is closed or canceled by the department of planning and permitting at the request of the owner; or (2) When the building permit is closed by the department of planning and permitting for lack of response by the owner or its agents, or otherwise deemed abandoned. If the exemption is canceled by the director under this subsection, the owner will be subject to and assessed the difference in the amount of taxes that were paid and the taxes that would have been due retroactive to the first year of the exemption, together with a penalty in the form of interest at 10 percent per year, from the respective dates that these payments would have been due. The taxes and penalties due will be a paramount lien upon the real property. Editor’s note: In accordance with Ord. 25-1 , §§ 8-10.35 and 8-10.36 apply to tax years beginning July 1, 2026 and ending on June 30, 2036, and will be repealed on July 1, 2036; provided that notwithstanding the repeal, any exemption approved under these sections before July 1, 2036 will continue in effect for the duration of the relevant exemption period in §§ 8-10.35 and 8-10.36, subject to ongoing requirements and the consequences of failing to meet the requirements of these sections.