The New Grey’s Anatomy Spinoff Is Moving to New Mexico After California Incentive Efforts Fall Short

By Kyra Greene

For more than two decades, Grey’s Anatomy has been part of the architecture of American television. Its characters have changed, its stories have evolved, and its universe has expanded beyond the hospital where it began. But as one of television’s most enduring franchises prepares for another chapter, the most consequential development may be happening far from the screen. The next Grey’s Anatomy spinoff is moving production to Albuquerque, New Mexico, after efforts to secure California’s film and television tax incentives proved unsuccessful. The franchise is growing, but the state that helped build its production history will not be home to its newest series.

The distinction is important because this is not a story about a struggling television property searching for a less expensive way to survive. ABC is moving forward with the untitled spinoff, created by Shonda Rhimes and Meg Marinis, the current showrunner of Grey’s Anatomy. The new drama will follow medical professionals working at a rural West Texas medical center, extending the franchise into a different setting while preserving the character-driven storytelling that has defined it. Shondaland and 20th Television are producing the series, with Rhimes, Marinis, Betsy Beers and Ellen Pompeo serving as executive producers. The decision to film in New Mexico represents a change in where that expansion will generate production activity, not a retreat from the franchise itself.

That difference sits at the center of a much larger economic conversation unfolding across the entertainment industry. California remains home to major studios, production facilities, creative talent and generations of institutional knowledge. Yet possessing the infrastructure to make television does not automatically guarantee that new productions will use it. Studios must evaluate budgets, available incentives, scheduling requirements and the practical cost of keeping a production operating over time. A series can be creatively connected to Hollywood while its financial calculations point elsewhere.

For Shondaland, the effort to remain in California was not merely theoretical. During an October 29, 2026, California Assembly committee hearing in North Hollywood, Beers described the company’s attempts to secure a tax credit for the new series. According to her testimony, ABC initially applied during the summer, expecting the production’s employment potential and Shondaland’s long history in the state to strengthen its application. The project was unsuccessful. Beers said the production was denied because it did not meet the state’s expectations for job creation and that the company’s history of sustaining California television employment was not taken into consideration.

The producers pursued another opportunity, but Beers said they were subsequently informed that the relevant application round would not accommodate new series. That distinction matters. The first unsuccessful application and the later inability to compete as a new production were not necessarily identical administrative decisions, even though both contributed to the company’s unsuccessful effort to secure an incentive. The uncertainty affected production planning, staffing and scheduling. Originally expected during the 2026–27 television season, the spinoff is now planned for the 2027–28 season.

Beers described the initial rejection during her testimony in direct terms. “We were denied credit due to the fact we were not providing enough jobs for the state to consider us an asset. None of our past history or track record were taken into consideration.”

She later explained the consequences of the effort to remain in California. “We lost personnel, we lost a lot of time, and we lost money trying to find a way to stay where we have always been. Now we are filming in Albuquerque, where they have been wonderful to work with, but we want to be here.”

Those words reveal something that can become obscured in discussions about production leaving California. The assumption is often that companies relocate because they have already decided they would rather work somewhere else. In this instance, the producer’s public account describes a company that wanted to remain, pursued the available incentive process and ultimately established production in another state. That does not establish that tax credits were the only factor in the final business decision. It does establish that the incentive process was central to the producers’ explanation of why the project left.

There is also a practical dimension to keeping a television franchise geographically connected. Marinis is responsible for the original Grey’s Anatomy while co-creating and executive producing its new spinoff. Beers explained that proximity between the productions was important to the showrunner’s ability to manage both projects. Moving the new series to New Mexico introduces a geographic separation that the producers had hoped to avoid. In this case, remaining in California offered an operational advantage beyond the familiarity of existing studios and crews.

California’s incentive system is designed to encourage productions to spend money and employ workers within the state. Its structure necessarily requires decisions about which projects qualify and how limited public resources are distributed. Following a major expansion in 2025, the annual program allocation increased from $330 million to $750 million, while the base credit for eligible productions rose from 20% to 35%. Those changes represented a substantial effort to improve California’s competitiveness against other production markets. But a larger program does not eliminate the fundamental problem of demand exceeding available funding. When more productions seek credits than the program can accommodate, some projects will proceed without support, postpone decisions or consider other locations.

The Grey’s Anatomy case illustrates the consequences of that selection process for an established television producer launching a new series. A production with a recognizable franchise, experienced creative leadership and the backing of a major television studio still faced uncertainty over whether it would receive an incentive. The state’s evaluation system measures projected economic benefits under its established criteria; it does not automatically prioritize a company’s historical presence or the commercial success of its previous productions. That distinction creates a legitimate policy question: how should an incentive program account for the potential long-term employment generated by returning television producers with established records?

The answer is not as simple as providing every production with a tax credit. Public incentives carry costs, and their economic returns remain subjects of debate. The amount of production spending attributed to an incentive program is not the same as the additional economic activity that would not have occurred without it. Some productions might have remained in California regardless of receiving support, while others may genuinely depend on incentives to make their budgets work. Understanding that difference is essential when evaluating whether public spending is producing the intended results.

Still, the economic impact of television production cannot be understood exclusively through a tax-revenue calculation. A continuing series supports employment across numerous occupations, from camera operators and lighting technicians to production designers, wardrobe departments, transportation crews and post-production professionals. Its activity can also generate business for equipment suppliers, catering companies, hotels and other local services. The scale of those benefits varies by production, and publicly available reporting on this particular spinoff does not establish how many California jobs or how much spending will be displaced. But the categories of economic activity at stake are real, and they explain why production location has become a consequential issue for regional economies.

New Mexico’s position in this competition is equally important. Albuquerque is not simply a substitute for Los Angeles. It is part of a state that has spent years developing its film and television production economy through incentives, infrastructure and relationships with major entertainment companies. For a production evaluating where to establish its operations, the availability of an alternative market changes the calculation. California is no longer competing only on the strength of its historic relationship with the entertainment industry. It is competing against jurisdictions that have made attracting production a deliberate economic development strategy.

That competition does not necessarily mean the entertainment industry is abandoning Hollywood. California continues to attract substantial production investment, and its expanded incentive program has supported new filming activity. In a November 2 announcement, the California Film Commission reported $8.25 billion in direct production spending associated with its expanded program, including $3.2 billion in qualified wages, along with more than 43,000 cast and crew jobs. Those are the state’s reported program figures, not an independent measurement of the program’s net economic return. They nevertheless demonstrate that California continues to secure substantial production commitments.

The challenge is that retaining some productions does not prevent others from leaving. A state can increase incentives, attract new projects and still lose individual productions when their applications are unsuccessful or their financial requirements cannot be met. That is the tension facing California: an industry with enormous creative and economic infrastructure operating within a market where production spending can move across state lines.

On November 2, Governor Gavin Newsom proposed another expansion of California’s Film and Television Tax Credit Program, increasing annual funding from $750 million to at least $1 billion. The proposal also includes additional support for independent productions, incentives for companies committing to multiple California projects, expanded eligibility for certain creative personnel costs and an extension of the program through 2040. These are proposed changes rather than enacted guarantees, and their ultimate scope will depend on the legislative and budget process.

The timing is revealing. California is considering another major increase in production incentives just as one of its most recognizable television franchises prepares to expand outside the state. The two developments reflect the same underlying reality: entertainment production is an economic activity that governments are increasingly competing to attract and retain.

For California, the question extends beyond whether its incentive allocation should be larger. It concerns whether the program provides enough predictability for companies planning productions months or years in advance, whether its selection criteria adequately recognize the potential value of long-running television employment, and whether the state can maintain its competitive position without committing public resources beyond what lawmakers consider sustainable.

For producers, the calculation is different but no less complicated. They must make decisions before a series generates revenue, often while coordinating schedules, hiring crews, securing stages and establishing the infrastructure needed to begin filming. An uncertain incentive outcome can influence when and where those commitments are made. Once a production establishes itself in another market, the resulting relationships and infrastructure may affect future decisions as well. That is a possibility worth examining, not an inevitable consequence of this particular relocation.

The Grey’s Anatomy spinoff makes these competing interests unusually visible because of the franchise’s history. This is not an unfamiliar production arriving in California to evaluate whether the state is worth the investment. It comes from a television enterprise with decades of experience producing in Los Angeles, supported by companies that understand the city’s workforce and facilities. Its producers publicly expressed a desire to remain. The project nevertheless moved.

The series itself will continue toward its next chapter. Audiences will eventually encounter new characters, a new hospital and a different corner of the Grey’s Anatomy universe. Most viewers may never think about where the cameras were positioned or which state’s workforce helped bring those stories to the screen. But for the people and communities whose livelihoods depend on production activity, those decisions have consequences beyond the television schedule.

Hollywood’s future will not be determined by a single tax-credit application, one television spinoff or one production move. The industry is too large, its economics too complicated and its creative infrastructure too deeply established for any individual example to explain the whole picture. What this case provides is a documented illustration of a broader shift: production geography is increasingly a financial decision that even longstanding relationships cannot settle on their own.

Grey’s Anatomy is expanding. The work required to create that expansion is going somewhere new. And for California, the larger question is no longer simply how to attract productions that have never called Hollywood home, but how to retain the ones that already do.