Las Cruces could put $1.3 million toward finishing NMSU's Arrowhead Studios film complex under a proposal before the City Council on Monday, Nov. 2.
The resolution, on the council's Nov. 2 agenda, would authorize a memorandum of understanding between the city and the NMSU Board of Regents, Organ Mountain News reported. The one-time payment would be due within 30 days of the agreement taking effect.
The money would go toward interior improvements at the 36,400-square-foot studio complex at Arrowhead Park. That includes the soundstage, production offices, a construction mill and other studio infrastructure.
Why the extra money
The project launched with $15 million from the New Mexico Economic Development Department (NMEDD) through the state's Media Arts Collective initiative in late 2024. That funding covers site development and the shells of two buildings, according to the council agenda packet.
But additional design work and consultations with film industry representatives pushed interior costs higher. Without more funding, city documents say the soundstage and supporting buildings would have to be shrunk, potentially leaving the facilities unable to handle full-scale productions meeting industry standards.
NMSU sought an additional $3.9 million, split equally among the university, Doña Ana County and Las Cruces at $1.3 million each. As of an August correction published by Organ Mountain News, the NMSU Board of Regents had not committed the university's share or authorized the agreement needed to accept Doña Ana County's proposed contribution.
The money comes with strings
The proposed agreement includes several oversight provisions. NMSU would submit quarterly financial and construction reports documenting expenditures, invoices and the remaining balance of the city's contribution. Annual reporting to the City Council is also required.
The city would retain audit rights. It could seek recovery of funds used for unauthorized purposes.
The agreement also gives city staff and officials access to the completed studio for municipal media production at low or no cost when reasonable.
The council's agenda summary states the action would not amend the city budget. The agreement still makes the city's obligations subject to sufficient appropriations and authorizations.
Project background
The NMSU Board of Regents approved the project in June 2024. The complex includes a commercial soundstage and production-support facilities at Arrowhead Park.
State Sen. Jeff Steinborn, executive director of Film Las Cruces and a leading advocate for the project, helped secure the original state funding, according to Organ Mountain News' August reporting. The project broke ground in September 2025.
At the groundbreaking, Wayne Savage, executive director of Arrowhead Park, said NMSU would be one of few universities to place film and digital media programs alongside industry partners. "We're excited for the impact this will have not only for the trajectory of our students' careers, but for the economic impact in our local community," Savage said, according to the Las Cruces Bulletin.
NMSU has signed an agreement with Automatic Entertainment to operate the facility. The company is expected to produce its own films at the studio and lease space to other productions. The operating agreement covers a two-year development period followed by 10 years of operations.
NMSU has projected the complex could create about 200 full-time jobs. Those figures are projections, not guaranteed returns.
If the additional funding is secured, the interior spaces are expected to be completed by May 2027. Council members may approve the agreement, reject it or postpone action at the 1 p.m. meeting Nov. 2 in the City Council Chambers at Las Cruces City Hall, 700 N. Main St.
