Mel Brooks' $45-$50m musicalrevival of his 1968 classic The Producers will become the first major film production to shoot at New York'sgigantic new Steiner Studios, the purpose-built studio backlot about to openacross 15 acres of former shipbuilding yards on the Brooklyn waterfront.

Steiner owes its success inenticing the movie version of Brooks' recent Broadway smash, which is entitled TheProducers: The Movie Musical, to the introduction of New York State's film and TVproduction incentive scheme.

That tax credit scheme,which was signed into law today by Governor George Pataki at a press conferenceheld in one of Steiner's new soundstages, is expected to shave some $3m-$4m offthe film's eventual budget.

Brooks, whose Brooksworks willproduce the film for Universal and Sony, says the incentive programme wasinstrumental in preventing his studio project from migrating north of theborder to Canada. Or elsewhere.

"The horrible truth is thatwithout this tax break, this film would probably be made in Kabul - or whereever it is cheapest," mused Brooks, whose screenplay will stay faithful to the stage-showhe co-wrote with Thomas Meehan.

The State's new four-yearscheme offers a fully refundable tax credit equal to 10% of all below-the-linecosts incurred while shooting on facilities that contain a soundstage of 7,000square foot or larger - a provision that will steer most production towardsSteiner Studios, and its two older counterparts in the neighbouring borough ofQueens, Kaufman Astoria and Silvercup Studios. There is a $25m cap on the taxcredit for each calendar year.

Beyond the State scheme, theCity of New York is looking to chip in with an additional 5% tax credit - plusfree film advertising on municipally-owned bus shelters, phone kiosk and streetbanners worth 1% of NYC production costs- under a measure still awaiting finalapproval. That complementary scheme is capped at an annual $12.5m.

To be eligible for all thevarious credits, film and TV productions must complete at least 75% of theirstage work in New York, a requirement designed to prevent more films fromsimply shooting exteriors in Manhattan and then defecting to more favourabletax climates for all their interiors and post-production. Some films, such asParamount's The Honeymooners and Alfie, have even tried to replicate the streets ofManhattan on location in Europe, specifically the cities of Dublin, Manchester and Liverpool.

With pre-production due tostart in four to six weeks, cameras are scheduled to start rolling on TheProducers: The Movie Musical on Feb21st under the direction of Susan Stroman, who also directed andchoreographed the Broadway phenomenon that inspired this film version.

Nathan Lane and MatthewBroderick will reprise their respective stage personas as Max Bialystock andLeo Blum, playing alongside Nicole Kidman as Ulla and Will Ferrell as FranzLiebkind.

The production is expectedto take up three of Steiner's five new soundstages, including the largest one,a towering 27,000 square foot column-free space that is billed as the largestpurpose-built stage set in North America outside California.

First mooted five years ago,the state-of-the-art Steiner Studios should finally open for businessofficially in a matter of weeks. Total cost of construction, which involvedtearing down hulking structures that were home to the largest navalconstruction facility in the US during World War II, is put at $128m.

Of that total, the Cityitself, under mayor Michael Bloomberg, invested about $28m in infrastructureimprovements at the Brooklyn Navy Yards, which occupies an entire 300-acretract of crumbling industrial land along the East River between the Manhattanand Williamsburg bridges.

The rest of the studio'sinvestment was privately raised by the facility's overall developer, SteinerEquities Group, led by the father-son team of David and Douglas Steiner.

Douglas Steiner is chairmanof Steiner Studios, which will be run on a day-to-day basis by president andCEO Jay Fine. Together they hope to provide work for an initial 1,000 newemployees and lay the foundations of a new media city that will be thepermanent address to several local film-related companies.