A struggling film studio located in the Detroit suburb of Pontiac has a new tenant, according to a report in the Detroit Free Press.
A New Line Cinema film called “Category 6,” about a massive storm, will set up shop at the studio this summer, the report said. The tenant would likely mean new revenue for the struggling facility.
In February, Raleigh Studios LLC defaulted on its payment on $18 million of privately placed tax-exempt bonds, saying it did not have the money to meet the obligation.
The missed payment forced the state’s pension plans, which back the debt, to make the payment.
The film studio was expected to miss its August debt payment as well, but that could change with the new film.
Raleigh Studios, which bills itself as the “largest independent studio operator in the country,” leased the space for most of last year to the Walt Disney Co., which used it to film “Oz: The Great and Powerful.”
Since then, however, the space has remained empty.
The Oakland County Economic Development Corp. in 2010 was the conduit issuer for $28 million of recovery zone facility bonds to finance the project.
The bonds were sold in three series. The largest, worth $18 million, has an unconditional guarantee from the state’s retirement systems.
The bonds do not have backup pledges from Oakland County or Pontiac.
Raymond James & Associates Inc. privately placed the $18 million series with a handful of large institutional investors.
The rest of the debt, a $5 million series and a $4.8 million series, was purchased by affiliates and family of the borrower.
The Pontiac film studio is one of several film-related facilities in Michigan that has struggled since Gov. Rick Snyder drastically reduced a film tax-credit program that, under former Gov. Jennifer Granholm, had been one of the most generous in the nation.