Behind the Scenes at Medient's $700 Million Georgia StudioPlex
Wednesday, May 28th, 2014
In March 2013, Medient Studios (MDNT) announced a deal with the Effingham County Industrial Development Authority to develop a movie studio, entertainment facility and campus in Effingham County, Ga. Medient plans to create over 1,000 jobs and spend an initial $90 million on the 1,500 acre property. The company’s CEO, Manu Kumaran, calls the project a “Disneyland meets Googleplex mega campus.”
The project’s plan is to use state tax credits and regional suppliers to create an “environmentally conscious and self-sustainable campus that will include the application of solar and hydro technologies.” When completed, the development’s final cost is estimated to reach $700 million.
Some in the financial community have predicted that the project was doomed from the start. Construction of Medient’s StudioPlex has been delayed for a variety of reasons including Medient’s inability to secure financing. Medient’s finances are shaky at best and their movie projects consistently lose money. In March, Medient awarded the general contractor role to a newly minted company with only noted experience in low income housing.
On July 15, 2013 Medient’s stock price was $2.05 per share. Today the company is less than a penny stock closing at $.003 per share. According to their recent SEC filing, the company has no cash on hand.
The General Contractor Saga
Shortly after the deal was announced, local contractors jumped at the opportunity for the lead role on the massive project. Two highly acclaimed Georgia contractors told Georgia CEO that they walked away when Medient asked them to finance the initial $90 million phase.
In August 2013, Medient CEO, Manu Kumaran announced that B.L. Harbert International of Alabama would be the general contractor. This was big news for Medient - B.L. Harbert is a $500 million firm with projects all over the world. However, when that announcement was made, the agreement had not yet been signed. One source told Georgia CEO that Harbert backed out when it became clear that they would have to participate in financing the project.
In March 2014, Medient named Shore Development and Construction, LLC as the general contractor. The CEO of Shore Development is Jeremy Blackburn. Public records indicate the company was started in October 2013. However, the company has no web site, nor can any construction project bearing the Shore name be found.
Titan Atlas Global, Shore Development & Jeremy Blackburn
Mr. Blackburn is also the CEO of Titan Atlas Global, instituted just one month prior to Shore in September 2013. Shore Development and Titan are located at the same address in North Charleston, S.C.
In January, the Charleston newspaper The Post and Courier reported on Shore Development’s CEO. “Blackburn, a 41-year-old Utah native, has flown high in the business world, in real estate development, mortgage lending, insurance, and even founded a bank.” the article stated. “But he's also had a series of lows, including failed business deals in South Carolina, unpaid debts, allegations of fraud, and bankruptcy.”
Titan Atlas Global manufacturers building products made of insulated steel reinforced concrete mainly targeted to low income housing. Mr. Blackburn started a company with a similar name, Titan Atlas Manufacturing, in 2009, with Donald Trump Jr. as an investor. Titan Atlas Manufacturing was entangled in a costly litigation involving patent disputes and eventually closed in 2012.
In 2013 Titan was resurrected. After Mr. Blackburn’s bankruptcy discharged $6.4 million in debts, he was named CEO of the new company, Titan Atlas Global.
The Contract Between Medient and Shore Development
The contract is unclear about how Medient will compensate Shore Development. An SEC filing of the contract between the two firms indicates that financing could be involved. The contract says the form of payment will be negotiated. Has Shore Development agreed to finance or participate in financing Medient’s StudioPlex project?
One noteworthy item in the contract agreed to by Medient is that Shore Development is explicitly authorized to buy materials for the project from Titan Atlas Global. The contract states that all structures, plumbing, electrical or other material secured from other sources can be purchased through Titan and that Titan has the authority to add their markup. This provision appears to have the potential to make Titan a sole purchasing middleman between Shore Development and all other suppliers and subcontractors.
The roughly 1,500-acre bucolic property in Effingham is indeed beautiful.
Even if the Medient relationship fails, Effingham still has many options to capitalize on this development. John Henry, CEO at Effingham County Industrial Development Authority, told Georgia CEO that the parties are working on revising the development plans and milestones. The new plan should be complete in the next 30-60 days.
However, large sums of money have already been spent on this project. One example is the $115,000 commission Effingham paid to the real estate firm for bringing Medient to the county.
“We have a lease with Medient on this property and the capital infrastructure projects that we have undertaken are long-planned investments in the property,” said Henry. “We are confident in the Medient project and hope to see it come to fruition in the near future. Everyone is working diligently towards that goal.”
Several attempts were made to contact officials at Medient, Titan and Shore Development for comment in the past six days. To date, none has responded.