Cut: City severs partnership with 828 Productions

The city council voted Monday to end its three-year partnership with film studio 828 Productions, stating that the studio had failed to deliver the “specific cinematic infrastructure improvements across multiple properties in Las Cruces,” it had promised when the council entered into the 828 Productions Local Economic Development Act in March 2023. That agreement allocated $897,596 from capital outlay funds to the project. Amendments to the agreement in December 2023 and May 2024 added another $2.8 million.    

The council vote not only terminates the Public Private Agreement but also requires 828 to pay back nearly $1.3 million in city taxpayer money it has spent thus far.

The vote is a signal that the city lost confidence in 828 and its CEO Todd Lundbohm, who was present at Monday’s meeting, to deliver on his promise to invest $75 million to build a 300,000-square-foot production studio in addition to three other facilities on properties it had acquired in several Las Cruces locations.

The original agreement promised 100 Las Cruces-based jobs, but according to Las Cruces economic development director Elizabeth Teeters, 828 has created just nine positions to date. She also stated that the company has invested just $3.5 million of that promised $75 million so far.

828 states that is has created 1,200 temporary and project-related production jobs for New Mexico performers and workers over a number of productions, but the city claimed that most of that work was done outside of Las Cruces.

“Of the $110 million in production spend, only $22 million of it was in Las Cruces,” Teeters said. “The rest was in Albuquerque and Santa Fe, which was ‘Onslaught’ and ‘Trap House,’ and then T or C, which he talked about. ‘The Protector’ was filmed here, but they are talking the broad sense of the state and we're looking for the direct impact on the city.”

While the agreement came with high hopes that 828 would lead the way in local film production, Teeters said that of nine feature films produced in Las Cruces in 2025, just two were produced by 828. Instead, most of the properties that were part of the 828 plans have continued to deteriorate. 828 has focused its efforts at just one of the buildings, its headquarters at 106 S. Miranda St.

While 828 has struggled to get up to speed, New Mexico State University recently broke ground on a $15-million movie studio on its Arrowhead Center campus.

“We do have a very thriving film industry,” Teeters said. “828 has been part of that, but Film Las Cruces is amazing, and I believe that they'll continue to work towards bringing productions here. In addition, there is the Arrowhead studio going up, and that was supposed to be competition for 828.

“It's not like the city as a whole won't have a studio in the next few years. I hope that 828 will still move forward and I hope that they will continue to bring productions because they have done some great productions. It's just the intent, when the money goes for a specific purpose like cinematic infrastructure, you expect something that we just weren't getting.”

In addition to the city’s contribution to the project, state economic development funds have been provided to drive 828 film production to southern New Mexico. This vote, for now, does not impact the $3 million in state funds. The city says it will continue as a fiscal agent for that money unless the state decides to terminate its participation as well.

The council voted 6-1 to terminate the city’s contribution, with councilor Bill Mattiace as the lone dissenting vote. 

The decision to end the agreement hinged on three primary issues.

828 Productions missed 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. That delay in filing authorizes the city to claw back 10% of all funds received by the company, or approximately $183,957.08.

A March reimbursement request from 828 flagged concerns with the city, which led to a full audit of expense. Teeters said that most of the expenses fit within the broad scope of the agreement, the audit exposed that much of the funding went towards repairs and maintenance and not infrastructure.

“The reason why everything started to be flagged in March is because we received no supporting documentation with that request for reimbursement,” Teeters said. “It's not that it was ineligible, but then it goes back to, ‘Are we reaching the intent of these funds?’ They are public dollars. They were set aside almost 10 years ago for a film studio. It just goes back to the intent.”

City staff have made changes based on this experience. Teeters took responsibility for the issues with the reimbursements and said they were something staff should have caught from the beginning. She said the department is instituting more formalized procedures for checking expenditures, monitoring performance of economic development projects, and keeping companies on track.

The third item that led to the termination was the one that triggered the largest part of the claw back. Teeters said the city discovered that 828 had lost title to a property at 111 S. Compress St. for which more than $1 million had been reimbursed, mostly for maintenance and security expenses.

In the Q and A with 828 attorney Joseph Dworak, who represented the business at the meeting, city councilor Michael Harris locked in on that facility, stating that, “The city put LEDA money toward a property that…you no longer own and might not get back for development.”

In addressing the council, Lundbohm stated that economic reality and crime in and around the Compress St. location had forced 828 to change strategy and focus its efforts on the Miranda location. He redirected the conversation instead to the financial outlay for production, on which the company is ahead of schedule.

The biggest concern that arose from the foreclosure at the Compress site was that 828 failed to inform the city when it happened. That failure triggered the possibility of the full claw back of all city funds spent to date, approximately $1.3 million.

“Up until we learned that 828 foreclosed on that property without notifying us, the only claw back we were going to ask for was the 10% (for the missed report),” Teeters said. “But the foreclosure of that property, seeing that the city spent $1.1 million on that property, and them not notifying us that they did foreclose was the point when we as staff felt like we needed to claw back this money.”

Dworak pointed to the 2023 Writers Guild of America strike and other developments that damaged film industry revenues as mitigating factors that forced the company to revise its business model in the short term. 828 suggested the parties step back and work to negotiate a revised agreement.

“As a businessperson and an entrepreneur, someone who's created jobs, I know the responsibility of making sure the business is successful,” said Councilor John Munoz, who is the mayor pro tem, after the vote. “It weighs heavy, whether it's three people or 30 people or 3000 people. I've had thousands of employees under my care. We cannot have a bad day, but we must communicate clearly and thoroughly. The results are critical, and when we need help, we need to ask for help.”

Lundbohm claimed the city had not been responsive to the company’s requests to negotiate — a claim Teeters denied, saying the city has record of more than 50 communications exchanged since the initial request for clarification in March of 2025 raised questions about 828’s invoicing.

“That was the whole point of the two 30-day extensions, to see if we could come to a common ground with the PPA amendments,” Teeters said. “Unfortunately, what we proposed and what they proposed were so different that it just didn't. I learned a lot today from them that they should have said a while ago, but their goals are very different from what our expectations are.”

Two attempts to renegotiate the PPA failed. The city noted that the most recent effort at a 30-day pause led to a proposal from 828 to reduce the local jobs guarantee from 100 to 40 over the 10 years of the original agreement but it did seek to increase the promised 828 spend from $350 million to more than $400 million.

The concern of the council seemed partly because the jobs are specific to Las Cruces, while the production investment is calculated on a statewide basis.

“What I was looking at was the trajectory,” Councilor Munoz said. "I know sometimes you lose a client or you don't get a client that was coming in or a project. They had to contend with the strike. I get that piece, but I'm looking at, is there some positive movement forward? They mentioned creating hundreds of jobs for Las Cruces. Nine is not it. I don't know what the number would have been that would have made me feel better, if it was 40 or 50 or something to that. I wanted 828 Productions to be successful. We all had high hopes for them. It was something exciting that we thought could succeed in Las Cruces.”

When asked if the claw backs are a bad look for Las Cruces long term, Munoz also pointed to other film related entities in the city that are doing well.

“I think there's good traction for the industry in general,” he said. “This company has struggled with partnership, with communication, with landing movies and production here in Las Cruces. As hard of a decision as it was, and being empathetic to entrepreneurs, I also have to look at taxpayer monies and be a good steward there. I want to stress again that Las Cruces is open for business.”

Soon after the vote, Lundbohm issued a statement regarding the council’s action.

“The city’s vote today is a setback for the local film industry and the small businesses that support it,” his statement said. “For the past two years, 828 has invested in and helped grow the Las Cruces economy, yet this decision was based on unsubstantiated concerns and insufficient evidence—much of which was refuted—without providing 828 a fair opportunity to respond or present its case to city council.

“This arbitrary action disregards the jobs 828 has created and jeopardizes the future of film in rural New Mexico. We believe the council’s rushed judgment will have unintended and long-lasting consequences for an industry Las Cruces has publicly championed and that 828 has worked tirelessly to build.”