New 'Avatar' Trilogy to Be Filmed in New Zealand

FILM: James Cameron

James Cameron (CAA, Greenberg Glusker) will direct "The Informationist," an adaptation of the novel by Taylor Stevens, for 20th Century Fox.

UPDATED: 20th Century Fox will release the first of the sequels in December 2016.

New Zealand is set to move from being "the home of Middle-earth," as it has become known with The Hobbit and Lord of the Rings films, to "the place where Pandora was brought to life."

James Cameron's follow-up trilogy to his record-breaking blockbuster, Avatar, will be made in New Zealand, with confirmation of a deal announced Monday worth over 500 million New Zealand dollars ($412 million), outlined in a memorandum of understanding between the New Zealand government, Cameron's Lightstorm Entertainment and 20th Century Fox Film Corp.

The memorandum underpins changes to New Zealand's range of incentives, announced at the same time, with Lightstorm and Fox getting 25 percent rebates on their spend in the country – an increase of 10 points on the current incentives available. Live-action filming and visual effects will be done in New Zealand.

The memorandum outlines spending of at least $412 million on production activity in New Zealand, including most of the live-action shooting and visual effects, and employment and skills opportunities for New Zealanders, including in head-of-department roles. Around 90 percent of live-action crew are expected to be New Zealanders. Alongside this, an internship program will be supported.

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The memo also outlines some additional details. New Zealand will host at least one official red carpet premiere, and a featurette on New Zealand will be included in DVDs and Blu-rays. And there's an offer by James Cameron and Jon Landau to serve as founding members of a new screen advisory board, which will provide advice and guidance to New Zealand screen and film makers looking to succeed internationally. Also, there will be marketing and promotion of New Zealand and its film industry alongside the three Avatar films, the transferring of technological know-how to New Zealanders, and the retention of screen production infrastructure in New Zealand that could be used for industry training.

There also is a commitment by both parties to grow the screen sector in New Zealand and to build a long-term and productive relationship between New Zealand and Lightstorm/20th Century Fox.

Cameron, who has been writing the films from his base on farmland that is a 20-minute helicopter ride from the New Zealand capital of Wellington, called the announcement a "historic day" for the film franchise.

"We had such a wonderful experience here making the first film, and obviously the result of all of the talent in New Zealand speaks for itself. It's a great pleasure for us to re-create that winning combination," local media quoted him as saying.

The confirmation that the new Avatar films will be made in New Zealand followed Prime Minister John Key's announcement that incentives available to both big-budget studio fare and local productions will be increased, with a single fund to cover all available production incentives.

The rebate on international film and television production rises from 15 percent to 20 percent, with an additional 5 percent available to international productions that will deliver "significant economic benefits" to New Zealand.

New Zealand's producer offset – a tax rebate of 40 percent for local productions – will be extended to larger-budget TV productions.

A two-tiered system means rebates will be given on film and TV productions up to 15 million New Zealand dollars qualifying New Zealand production expenditure (QNZPE), and equity will be provided on productions between $15 million and $50 million QNZPE.

The existing Screen Production Incentive Fund and Large Budget Screen Production Grant will be combined to form the New Zealand Screen Production Grant, an uncapped fund. Qualification for the incentives will be made on a points test, the details of which will be announced by the time the new incentives come into effect on April 1, 2014, after consultation with industry.

"These changes will help ensure a screen industry that is more sustainable, brings greater long-term economic benefits to New Zealand, and avoids the peaks and troughs that are solely dependent on large international productions," New Zealand economic development minister Stephen Joyce said in a statement.

"To support and develop our screen sector, the Government is altering our screen production incentives to both encourage more mid-size locally driven productions and attract more international productions while our own domestic industry develops – without engaging in a 'race to the bottom' mentality," he added.

"These changes will enable larger-scale New Zealand productions to be made as well as encouraging more New Zealand stories to be seen on screen," New Zealand Film Commission chair Patsy Reddy said.

"This sends a strong message internationally that New Zealand is competitive and that the screen sector is backed by the New Zealand Government," added Film New Zealand chair Julian Grimmond.

But while the focus of the announcements is on the Avatar films, with the expectation that they will be based in Wellington, where the first film was shot, industry members say the whole country should be able to benefit from the agreements, noting that the downturn in production has been biting hard in the country's largest city, Auckland.

"Film Auckland's Advisory Board are delighted that the government has recognized the current problems faced by our industry and have increased the incentives," Pete Rive, chairman of Film Auckland Inc. and president of Mili Pictures Worldwide said.

"We would like to ensure that the government going forward will consult fully with us and take advantage of our offer to advise on screen-related matters and how to grow and sustain our industry," said Rive. Film Auckland Inc. has been engaged with a broad cross section of the industry, he said, and has felt the pain of those companies and contractors whose businesses have been failing.

The announcements came as the second of Peter Jackson's Hobbit films, The Desolation of Smaug, also made in New Zealand, topped the U.S. box office with an opening weekend total of $73.7 million.