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LAS CRUCES 鈥� Movie studio 828 Productions is taking the city to court over its February decision to cancel economic incentives for the company and claw back $1.3 million spent on the project.

The lawsuit seeks judicial review of the City Council鈥檚 Feb. 2 vote to end its partnership with the studio, in which the city invested nearly $900,000 in capital outlay and $2.8 million in city funds. The council took action after the city鈥檚 Economic Development Department advised them the studio had submitted vague invoices for reimbursements under its 2023 project agreement, fallen short of job targets and failed to develop blighted properties it acquired 鈥� even defaulting on a major property for which $1.14 million in city money had been spent.

The lawsuit contends that the city did not allow the studio a fair hearing and is fighting the clawback provision, which 828 says would have 鈥渋mmediate and substantial financial consequences鈥� and requires due process of law, while the city maintains it lawfully terminated the contract because the studio didn鈥檛 deliver on its commitments.

At a Tuesday hearing in state district court, the city will ask a judge to dismiss the suit, saying the studio was in breach of contract and the city was within its rights to end it. The council took action after staff informed them the studio was billing the city but not making substantial progress on commitments in the agreement. The city also argues that the studio did not respond to requests for information by the Economic Development Department and was granted additional time to negotiate a revised agreement. The negotiations ended without a deal.

In 2022, 828 CEO Todd Lundbohm pledged to invest $75 million for a 300,000-square-foot production studio and other facilities, creating a minimum of 100 jobs. Since then, the studio has been involved in over a dozen movies filmed in Las Cruces and around New Mexico, including the modern western, 鈥淓ddington鈥� with Joaquin Phoenix and Emma Stone. 828 has reported 1,200 production jobs and millions of local spending, while reporting it had nine staff members at the end of 2025.

In February, Lundbohm told the city council that 828 had 鈥渟hrunk ranks鈥� from some building projects because of economic conditions, but was ahead of schedule on its targets for local production spending.

In all, the city is seeking to reclaim $1,137,570 spent on the property on which the studio defaulted plus 10% of all funding from the city.

Meanwhile, a state-funded $15 million movie studio on the New Mexico State University campus broke ground last September. 

828 has also lost a $3 million LEDA partnership with the state, which the city facilitated as a fiscal agent. In the aftermath of the city鈥檚 action in February, the New Mexico Economic Development Department said it would assess its agreement with the company. 

鈥淔ollowing that evaluation, the state has determined it will not continue LEDA funding for 828 Productions,鈥� EDD spokesperson Chris Chaffin told the Journal on Monday. 

Algernon 顿鈥橝尘尘补蝉蝉补 is the Journal鈥檚 southern New Mexico correspondent. He can be reached at adammassa@abqjournal.com.