A company slated to build a $40 million eco-friendly film studio south of the city lost its place in line to be considered for a $5 million state economic-development loan because it hadn't yet ironed out an agreement with its bank.

The $12 million in the Smart Money Loan Participation Program fund is lent on a first-come, first-served basis to projects authorized by the Legislature. In some cases it provides funding for an entire project. In this case the state money would have been used to lighten the load on the primary lender for an approximately $24 million construction loan on the project.

The New Mexico Finance Authority tentatively accepted the project for the Smart Money program in February with the understanding that Santa Fe Studios had a deal "ninety-five percent" worked out with Los Alamos National Bank," according to NMFA Chief of Programs Marquita Russel. But despite several deadline extensions, she said, the film studio and the bank still hadn't reached a solid enough agreement to meet application requirements.

"I needed a final commitment so we were sure we were committing the funds to a project that was ultimately going to go forward," Russel said.

Santa Fe Studios president Jason Hool did not return a phone call seeking comment for this story.

Because the $5 million loan is such a large part of the program's available lending capacity, Russel said, fund administrators could not continue to keep the money on hold waiting for the studio and bank to finalize their terms.

Russel said Santa Fe Studios can reapply but several other project representatives are "circling" in anticipation of getting some of the available money.

The Santa Fe Studios project is still slated to receive an approximately $10 million economic-development grant through a different state program.

Santa Fe County has also agreed to partner with the studio on the project — by footing the bill for about $3.5 million worth of infrastructure. County officials did not return calls seeking updated information about the project Monday.

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