Blue Sky Studios to expand, again with state aid

Blue Sky Studios, whose move from White Plains, N.Y., to new digital animation studios in Greenwich two years ago was encouraged by $15 million in tax credits, is about to expand. And once again, it will be helped by the state.

The state announced Tuesday it is providing a $3 million, low-interest loan to the subsidiary of Fox Filmed Entertainment, with half the amount forgivable if the expansion produces 70 new jobs.

Blue Sky also can claim additional tax credits equal to 20 percent of anything more than $3 million it spends building the 43,000 square-foot expansion.

“State support for Blue Sky will ensure the industry will grow and other film production companies see Connecticut as a great location and an important partner in their plans,” Gov. Dannel P. Malloy said in a written statement.

Malloy’s first stop on his jobs tour last summer was at Blue Sky, which has produced animated films such as “Ice Age” and, more recently, “Rio.”

If the loan is forgiven, the subsidy would be worth $21,428 per job. The original deal that brought Blue Sky to Connecticut – tax credits worth $1.5 million annual for a decade – produced 400 jobs at $37,500 a job.

George Norfleet, the director of the Office of Film, Television and Media in the economic development department, said the subsidies actually are much lower when the value of spin-off jobs are counted.

“At the end of this, the state is absolutely coming out ahead,” Norfleet said.

Some legislators were critical of the original film tax credit program, which underwrote some movies partially filmed on location in Connecticut, which critics say produced too little economic benefit.

But legislative leaders, who had not been briefed on the new deal with Blue Sky, said they were much more comfortable with the credits and other aid being used to encourage the construction or expansion of a studio facility.

“Obviously, we’re looking to create jobs wherever we can and build an industry in Connecticut that will be permanent and provide actual jobs here on a year round basis … not just have people swoop in and get a credit,” said Senate Majority Leader Martin Looney, D-New Haven.

House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, said he was bothered by the subsidies for location filming, but was comfortable with an investment helping to establish permanent jobs.

“That’s a different story,” Cafero said.

The administration of Gov. Dannel P. Malloy has made several high-profile commitments to economic development projects, subsidizing expansions at CIGNA, ESPN and TicketNetwork.

His biggest project, the $291 state investment in a $1.1 billion genetics research lab at the UConn Health Center, is expected to be approved Oct. 26 by the General Assembly, but it is unclear if the Republican minority will be on board.

Cafero said Republicans are looking at the 300 direct jobs guaranteed to by Jackson Laboratory, the private non-profit that will run the institute, and comparing them to less expensive projects, like Blue Sky.

The administration counters that the project is likely to spin of thousands of new jobs and give Connecticut a foothold in an emerging industry.

Roy Occhiogrosso, the governor’s senior adviser, said Malloy is comfortable defending the investments. He said, “I’d much rather have him defend Blue Sky and CIGNA and the incentives offered to have them stay or relocate in Connecticut than have him at a press conference explaining why they are leaving.”