City council to vote on cancelling agreement with 828 Productions

Based upon recommendations from city staff, the Las Cruces City Council could approve an ordinance Monday that would end the city’s role in a partnership agreement with 828 Productions that was established in 2023. Ordinance 3017 is on the agenda for the next council meeting, scheduled for Feb. 2.

If the council approves, the city will end its partnership with the film company and claw back approximately $1.3 million of public funds.

In March 2023, the city council established the 828 Productions Local Economic Development Act, allocating $897,596 from capital outlay funds to the project. Amendments to the agreement in December 2023 and May 2024 added another $2.8 million in gross receipt taxes. The city states that the funds were intended for, “specific cinematic infrastructure improvements across multiple properties in Las Cruces.”

According to 828 Productions founder and CEO, Todd Lundbohm, 828 headed to Las Cruces at the urging and with the full support of the New Mexico Economic Development Department. The state pledged $3 million from the Local Economic Development Act to support the project based on the expectation of jobs and investment in New Mexico.

As of this date, according to the text of Ordinance 3017, the company has expended $897,586 of the initial funds and drawn $941,984.78 from the additional $2.8 million allocation from the city. It also states that 828 has submitted future reimbursement invoices totaling nearly $750,000.

The case for terminating the agreement is based primarily on three criteria in which the city claims 828 has fallen short of meeting the terms set forth in the PPA. City economic director, Elizabeth Teeter says this has been an ongoing discussion between Las Cruces and 828 since March.

The ordinance cites a reimbursement request from March 2025, which it claims, “raised concerns among city staff that the invoices did not materially serve the objectives of the Project and provided insufficient supporting documentation.”

That triggered a comprehensive review of all invoices related to the city’s funding through which the city determined, “that funds were primarily used for property maintenance and general upkeep rather than the material development of the infrastructure identified in the PPA and amendments.”

“As part of the LEDA agreement, there is an annual review requirement, and in June of 2025, we notified (828) that we would recommend termination based on the lack of information being provided to us,” Teeter said in an email to the Bulletin. “We continued to work with 828 and in August granted a 30-day extension on the termination and then granted an additional 30-day extension. 828 and the city shared some draft PPA amendments, but we could not come to an agreement, so we scheduled to bring the termination to city council in December.” 

Some new information arose requiring follow-up that put the item on pause.

“We are now bringing the termination to council for discussion on Feb. 2,” Teeter said. “These items have to be discussed in a public meeting, and this is our opportunity to do that. This has been a months-long, ongoing discussion with 828.”

“For roughly 18 months, we submitted reimbursement requests to the city for this property (300 S. Compress), and those requests were consistently reviewed and paid. Then, without warning or discussion, the city reversed course and retroactively characterized previously approved items as ‘ineligible,’” Lundbohm said in an email to the Bulletin.

He cites that location as an example in explaining the reason for the type of expenses, including things like fence repair at a location that has been breached almost daily by trespassers, incurred by 828 Productions.

“We had employees working full time simply trying to keep the site secure for our staff, contractors, and visiting crews,” Lundbohm said. “If the city intended to change its interpretation or policy, that should have been addressed through a conversation and a collaborative solution—not through vague allegations that suggest we were acting improperly. Maintaining safety is not a substitute for progress; it’s a prerequisite for it. And in this case, the record shows we acted in good faith, consistent with both our agreement and the City’s own prior approvals.”

The second item cited in the ordinance proposal providing justification for this action relates to 828 Productions missing the deadline to submit an annual Economic Impact Analysis. According to the agreement, the company was required to submit that report by Apr. 15, 2025, but did not do so until July 2025 following additional correspondence from NMEDD. That delay in filing allows the city to claw back 10% of all funds received by the company, or approximately $183,957.08.

“We take our reporting obligations with the state extremely seriously, as they are a core part of our contractual responsibilities,” Lundbohm said. “In this instance, the individual who had been handling the reporting left the company on short notice due to a family medical situation. The responsibility was transitioned internally, and unfortunately, the filing was missed during that handoff.”

The CEO says that once the issue was brought to his attention, 828 immediately worked with the EDD to submit the report, which was filed within 24 to 48 hours.

“We take full responsibility for the delay and are not making excuses,” Lundbohm said. “We are a small startup operating in good faith, and this was an isolated administrative oversight, not a failure of intent or compliance. The idea that a single, promptly corrected misstep could be used to unwind years of work does not feel proportionate to the facts.”

Finally, the city is seeking to claw back the sum of $1,137,570.78 due to “cessation of production or its failure to occupy its facility for business authorized by the LEDA Project.” The city states that 828 lost title to its property located at 300 S. Compress in August 2025 yet failed to notify the city. The agreement requires a claw back in the event of a facility closure.

“This was a satellite facility in the early stages of buildout—not our headquarters and not a fully operational site,” Lundbohm said. “Our headquarters has always been, and remains, at 106 South Miranda, which is fully operational, active, and continuing to grow.”

828 did consider stepping back from the Compress property due to the safety conditions in the surrounding area.

“We’ve simply refocused our operations in areas that are safer and more secure for our employees and for visiting cast and crew, while remaining open to future development if the conditions allow,” Lundbohm said. “Companies adjust footprints all the time in response to safety, logistics, and market realities. In our case, the core operation remains intact, active, and committed to Las Cruces.”

According to Lundbohm, 828 brought more than $100 million of outside production into the state during its first year in business. That’s 30% of the 10-year projection from the original deal in just one year. He feels that information should be part of any discussion about cancelling the agreement.

Per the proposed ordinance, the city will continue to act as fiscal agent for the $3 million contribution from the state legislature unless NMEDD elects to end its further contribution. All communications between Lundbohm and NMEDD indicate the state is happy with the work of 828 Productions and has no intent of discontinuing its support.

In all the documentation provided to the city councilors, there is no mention of the response from 828. City representatives told the Bulletin that 828 has asked to address the council Monday, and the mayor will grant that request. Lundbohm says he has been told they will give him five minutes.

The city council meeting begins at 1 p.m. Monday, Feb. 2.

The Bulletin is following the vote and will continue to update this story as more details are available.