Raleigh Studios/Pontiac failed to make a $630,000 payment due Feb. 1 to its out-of-state bondholders – but Raleigh does expect to make its coming August bond payment, with the unlikely caveat that Michigan’s moribund film industry revives.
The State of Michigan Retirement System (SMRS) on Feb. 1 paid $420,000 on what Raleigh Studios’ facility owed under an agreement by the previous administration that guaranteed the bonds, Michigan Department of Treasury spokesman Terry Stanton said in an Email to the Detroit Free Press.
It is unknown what amount the state retirement system would pay if Raleigh Studios fails to make its August payment, Stanton said, because it will depend on what the company pays to the bondholders before August.
Sources close to Raleigh/Pontiac told The Detroit News last month that the owners had not made their required monthly escrow set-aside payments since October, and wouldn’t have the money to meet their biannual bond obligation when it came due Feb. 1.
Raleigh/Pontiac was backed by investors that included Hollywood-based Raleigh Studios, the Taubman family, the Linden Nelson family and Walbridge Co.
They invested $80 million in 2010 plus $18 million in bonds, $11 million in state tax credits and $18 million-plus in federal funds, according to The Hollywood Reporter to convert the former GM truck plant into a state-of-the-art studio.
There are no new film projects ahead, since shooting of director Sam Raimi and Disney’s “Oz: The Great and Powerful” ended in December.
The likelihood of the studio revival is virtually nil since Gov. Snyder whacked the state’s former top tier film incentives to $25 million in grants per year.