The Santa Fe County Commission voted unanimously Tuesday to guarantee a $10 million loan from Los Alamos National Bank to the developers of a private film studio slated to be built off N.M. 14 near the state prison.

The volumes of legal documents approved by the commission Tuesday included authorization of a substantive change in the ever-changing deal between the county and the film-studio developers.

Under the terms of the new deal, the approximately $19 million project will be funded by a $10 million loan from Los Alamos National Bank and a $10 million Local Economic Development grant from the state of New Mexico.

The new terms relieve the county of its previous agreement to loan studio developers $6 million for the project. But the county will still be obligated to guarantee $6.5 million of the $10 million loan and make payments of up to $500,000 per year on the loan should the studio developers default.

County Attorney Stephen Ross said the county would never be liable for more than the loan payment amounts in any given year.

The county's previous agreement to donate about $3.5 million worth of infrastructure and water rights to the project in the name of job creation and economic development still stands.

County Commissioner Harry Montoya asked several pointed questions during the discussion leading up to Tuesday's vote.

"In light of the fact that Albuquerque Studios just went through foreclosure, what guarantees do we have that we are going to be successful in this endeavor?" Montoya said, referring to the fact that the eight-stage Albuquerque Studios filed Chapter 11 bankruptcy last week.

Ross pointed out that the question wasn't strictly a legal one, but speculated that if the Albuquerque-based studio folded, there would be more demand for studio space in the state.

Ross added that Santa Fe is a popular destination for Los Angeles-based "talent" because of its proximity to Los Angeles, and he quoted a recent study that stated that every film job creates 2.5 supporting jobs.

"The proponents of this project are, as you know," Ross said, "very, very well known, very ethical and professional film producers. They have a good reputation in L.A. They are Hollywood insiders. One might argue that the folks at Albuquerque Studios are not."

Jason Hool — whose father and partner Lance Hool once played Little League baseball with Gov. Bill Richardson when the two were growing up in Mexico — said one of the main differences between the projects is location.

"Santa Fe, as we all know," Hool said, "is highly desirable compared to Albuquerque."

Hool said he and his partners — who include Democratic Party chairman Javier Gonzales — also plan to "start modestly and grow organically as the demands warrant."

But Montoya asked, "What are we going to do with a film studio if this doesn't work out?"

Ross responded that the county would have to "take that situation as it arose. We could take the studio back and run it or hire someone to run it," he said. "Short of that, I'm sure any situation that would arise would involve a period where you try to work things out with the studios and the banks and all the people involved."

Jason Hool said once the documents are signed — at a closing scheduled to take place in two to three weeks — construction will begin immediately, perhaps as soon as August or September.

The Hools have been working to develop the film studio for years, and it appears that Tuesday's vote has put them one step closer to rolling film.

But one thing that could slow the project is a lawsuit filed by three Santa Fe men challenging the legality of the county's original deal with the developers.

That lawsuit — which was filed before the Hools obtained the $10 million loan — claims the county's previous agreement violated the state's anti-donation clause.

Ross said when the suit was filed that the county disagreed with allegations made in the document, and later said that the fact that the developers had obtained the private loan would make it a moot point. But the suit is still pending, with a hearing scheduled for Aug. 23.

Contact Phaedra Haywood at 986-3068 or phaywood@sfnewmexican.com.