A $50 million facility to help educate students and develop companies in the film and digital media industry is being considered by the state as a potential expansion to the Hawaii Film Studio near Diamond Head.

The state Department of Business, Economic Development and Tourism has produced a master plan and draft environmental assessment for the proposed project, which includes two sound stages and a parking structure for the University of Hawai'i and fledgling companies.

The master plan and environmental assessment are part of a broader effort to determine if the project is feasible at the state's Diamond Head film studio site leased to commercial film productions.

If the plan is deemed feasible, it still could be several years away from fruition because financing has not been arranged. However, the plan is viewed as a natural evolution for the university's roughly 5-year-old Academy for Creative Media, which already has turned out graduates who have started companies in film and digital media.

"I think this is the next level," said film producer Chris Lee, founder and director of UH's Academy for Creative Media. "The opportunity to do this is really important. It's a game-changer."

The proposed Film and Digital Media Center would provide the Academy for Creative Media with facilities such as classrooms, academic offices, a set-building facility, sound stages, computers and editing rooms.

Presently the academy, with 38 courses and about 600 students, including 100 majoring in creative media, has equipment largely donated by private investors but no dedicated facilities.

"We're sort of squatters," Lee said. "We're borrowing all that."

As proposed, the three-story center would accommodate an estimated 300 to 350 people at most, with about 100 people there at night. A two-story parking structure would be built on the site of an existing 100-stall lot fronting 18th Avenue, giving the Hawaii Film Studio campus 259 parking spaces.

Another focus for the Film and Digital Media Center would be to incubate startup companies in digital media.

"As a digital media incubator for private companies, the state of Hawai'i will encourage entrepreneurial opportunities and expand the state's creative industry," DBEDT said in the environmental assessment. "The state's goal is to attract new film and media production opportunities to support the economic development of Hawai'i's creative industry."

The idea for the project goes back roughly five years, emerging through discussions between Lee and state agencies including the Hawai'i Film Office.

The project site largely occupies 1.9 acres within the 7.5-acre Hawaii Film Studio property adjacent to Kapi'olani Community College. The site contains four old office buildings and the film studio's original sound stage, built in the mid-1970s by CBS for "Hawaii Five-0." For years, it has been used primarily for storage because of its condition. The old structures would be demolished.

DBEDT obtained a $180,000 federal Economic Development Administration grant to help produce a master plan and feasibility study for the project. Another $180,000 in state matching funds was raised, in part, by Lee taking a 90 percent salary cut.

In the late 1980s, the site was part of a master plan to expand the film studio with two modern sound stages, production offices and other facilities. An environmental impact statement was produced, but only one sound stage was added in the early 1990s while the balance of state-approved funding for the project lapsed. A $7.3 million upgrade in 2006 added new production offices and set construction facilities approved by the Legislature in 2002.

Hawai'i film commissioner Donne Dawson said there is still a need for at least another sound stage for commercial productions, but the state intends to let the private sector fill that need.

Currently, ABC's TV show "Lost" uses all the facilities at the Hawaii Film Studio. In the past, multiple productions have competed for the space and have been forced to find and convert warehouses for filming — an unattractive situation for luring film and media productions to the state.

A little more than two years ago, Los Angeles-based developer SHM Partners arranged to lease 22 acres in Kapolei for a planned film production complex with four sound stages, office space and set construction facilities.

The project also calls for longer-term space for production-related companies and facilities for UH's Academy of Creative Media.

SHM is still pursuing its plan, but has not announced a timetable for development or a financing deal. A SHM representative could not be reached for comment yesterday.

Lee said the Film and Digital Media Center was modeled after elements of similar projects at Mainland schools, including the University of Southern California, Chapman University in Orange, Calif., and the American Film Institute in Los Angeles.

Hawai'i's film and television industry had its fourth-best year in 2008, generating $146 million in spending as dozens of projects were shot here.