TV, film jobs leave California in a rush
dailynews.com
By Troy Anderson
Staff Writer
Daily News
02/15/2009
It started when Clint Eastwood went to Michigan to film "Gran Torino."
Since then, George Clooney, Cuba Gooding Jr., Hilary Swank and other movie stars have made the pilgrimage to make movies in The Wolverine State.
Now, the phones are ringing off the hook in the "Hollywood of the Midwest," where Los Angeles film and television crews are flocking to take advantage of filming incentives - something the state of California doesn't do.
"We're not the new Hollywood," said Mark Adler, director of the Michigan Production Alliance, a trade organization that supports film and video production.
"There are 35 other states that have incentives. But that's why the work is running away from California, just as the work ran away from the entire U.S. film industry when Canada released their incentives in the early part of this decade."
In April, Michigan Gov. Jennifer Granholm signed into law the most aggressive film incentives in the nation, offering cash refunds of 40 percent or more to film and television companies that spend more than $50,000, said Michael Shore, spokesman for the Michigan Economic Development Corp.
Since that time, the Michigan Film Office has approved incentives for 73 film productions, up from three in 2007. Of those, 32 have already been finished. Three companies, Wonderstruck Studios, Motown Motion Pictures and Stardock Systems, plan to invest more than $156 million to build studios. If all the projects go into production, the state will see more than $436 million added to its economy.
At a time when Hollywood is celebrating its 100th birthday - the city's first movie, "In the Sultan's Power," was filmed in 1909 - the number of production days for feature films hit a record low of 7,043 in 2008, according to Film L.A., the nonprofit organization that coordinates filming permits in the city and county.
That's the lowest amount since the organization began keeping statistics in 1994 and nearly half of the peak of 13,980 in 1996.
"It's a continuing trend we've seen over the last decade," said Todd Lindgren, vice president of communications at Film L.A. "It's definitely a result of California's loss of competitiveness when it comes to feature films and other film productions. The incentives offered by other states are having an impact on our signature industry."
And while some of Hollywood's biggest names are traveling to Michigan, New York, New Mexico, Louisiana and other states to make movies, Lindgren said he's only aware of a few "big-budget studios" planning to shoot films in the Los Angeles area this year. In these other states, movie and television production companies are building studios and universities and colleges are offering special training programs.
"There has been an incentives arms race among states to try to come out with the most generous incentives," Lindgren said. "In the last couple weeks, the New York film office and the New Mexico film commission released studies ... demonstrating that production incentives are bringing in more tax revenues than they are giving out in incentives. They are working."
Last year, the state of New York raised its film and television tax credit to 30 percent of qualified costs, which was three times larger than the credit it replaced.
"More than 125 projects (feature films, television pilots and television series) have taken advantage of the increase in the tax credit program," said Lisa Willner, spokeswoman for the New York State Governor's Office for Motion Picture and Television Development.
Meanwhile, the percentage of studio feature films shot in California has dropped from 66 percent in 2003 to 31 percent last year, said Amy Lemisch, executive director of the California Film Commission.
"The concern we have is that when studios are doing a feature film they will only budget the movie in locations that are offering incentives," Lemisch said. "So what we are seeing is very often California is not even considered as a viable location anymore."
Although the entertainment production capital of the world generates $38 billion a year for California and employs 250,000 people, experts say the incentives offered in other states are increasingly luring filmmakers away from Hollywood.
Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said California needs to become more competitive.
"People in California are just sort of sitting back, not understanding the implications of this, and if we're not careful, this is another industry that could slip away from us, just like aerospace did," Kyser said. "The rubric in Sacramento is, `Oh, we can't do these incentives. It's just welfare for the big corporations.' But they don't understand how the industry works."
Although Hollywood does consist of several large movie and television studios, many entertainment companies are smaller firms spread not only throughout the county, but the entire state, Kyser said.
"Why are other states offering these incentives?" Kyser asked. "It's because it creates jobs and tax revenues. This is the message they have been trying to get through to the people in Sacramento - `It's not going to cost you more money. It's going to bring money to you."'
The growing concerns about the Golden State's lack of competitiveness comes as the U.S. Senate recently removed a provision from President Barack Obama's economic stimulus bill that would have allowed film projects started this year to qualify for a 50 percent write-off.
"The American people will be nauseated by the numerous and shameless special interest projects that have been slipped into this bill despite President Obama's call to keep this bill free of earmarks, including a $246 million earmark to bail out Hollywood when Hollywood just enjoyed its biggest January ever," said U.S. Sen. Tom Coburn, R-Okla. "This is insulting to the millions of American families who are struggling to make ends meet."
Assembly Assistant Majority Leader Paul Krekorian, chairman of the Select Committee on Preservation of California's Entertainment Industry, said he and other legislators have made numerous attempts to persuade fellow lawmakers to pass legislation offering filming incentives in California. Krekorian said many other states have had double-digit growth in film production in recent years, largely at California's expense.
"It's tragic that over the course of the last dozen years (so many) states have seen the wisdom of providing film and television production incentives and California, home of the film and television industry, has failed to remain competitive," Krekorian said. "I've had the honor of pursuing legislation to try and correct that, but so far we've not been able to succeed."
But as the state's elected officials continue to address a $42 billion shortfall, Krekorian said he plans to reintroduce legislation that would provide the entertainment industry with filming incentives in California. During the budget discussions, the leaders of the Assembly and Senate have discussed the possibility of a filming incentive package as part of Gov. Arnold Schwarzenegger's economic stimulus plan, Krekorian said.
The governor has proposed targeted tax credits ranging from 20 to 25 percent at the film and television industry to help keep production in California. The governor has noted that every $100 spent on production in California generates $285 in economic output.
Under the tentative budget agreement announced last week, officials said filming incentives may be offered in California.
"The governor has been very clear that any state budget solution must have four elements: spending reductions, revenue increases, making government more efficient, and stimulating the California economy through job creation and helping California families stay in their homes," said Schwarzenegger's spokeswoman Camille Anderson. |
