Arizona commissioned ESI Corp. to perform
an analysis of its film and video industry. The report showed that
employment in Arizona's film industry declined more than 26 percent
between 2000 and 2003. ESI recommended a comprehensive plan
establishing collaborative partnerships in the film industry,
facilitating and promoting local film-making, establishing incentives
with a return on investment, developing a marketing and promotion
strategy, and creating a film office website.
"Arizona was
experiencing a drain of industry talent, making it difficult to attract
projects," reports Judie Scalise, president of ESI Corp. in Phoenix.
"The Arizona Film Commission realized its efforts to attract business
could not alone turn the tide. They needed legislature help to create
an incentive and job training package to rebuild the state's film
infrastructure. Incentives alone don't do the job," she stresses.
"There must be a strong educational focus in all facets of multimedia
production."
"The film and television industry has a firm basis
in technology and entrepreneurship, thereby making it an economic
catalyst," says Arizona Film Commission Director Harry Tate.
"Incentives have supplanted locations as the number one consideration
for many production projects, after scripting considerations. In fiscal
year 2003, the film industry generated over $200 million in total
economic activity and supported more than 1,700 direct and indirect
jobs in Arizona."
With new legislation signed into law by
Governor Janet Napolitano in October 2005, Arizona seeks to rebuild its
declining work force and increase film industry revenues. In order to
qualify for tax credits, production companies must hire a required
percentage of its crew in-state.
"We had to reverse the trend,"
says Michael McGinn, president of the Arizona Film & Media
Coalition. "Arizona not only lost industry jobs and revenues, we lost
tourism dollars. With the new legislation, we are in a better
competitive situation to increase film industry interest in the state.
While it's still too early to assess the impact, we are excited about
the future."
"New Mexico's success started a rush of states to
recapture productions outsourced overseas," says Michelle Hartly,
executive producer of FilmWest Productions in Tucson. "In order to help
states determine industry needs and to help producers learn about
incentive programs, the USA Committee of the Producers' Guild of
America invited all state film commissioners and representatives for a
July 2005 forum in Los Angeles. Getting the film producers and state
film people on the same page is a big step in the right direction."
Not
all incentive programs have moved along smoothly. Louisiana has had to
regroup twice since instituting incentives that include sales and use
tax exemptions for production expenditures, employment tax credits, and
transferable investor tax credits.
"We were convinced that we
could attract a lot of the overseas production activity to Louisiana's
Hollywood South," says Tommy Kurtz, senior vice president of Jobs
Development for Greater New Orleans, Inc. "As a result of the 2002
legislation, $20 million of film production business grew to $400
million this year. This has rebuilt our film industry work force with
quality, high-paying jobs. Incentives are the hook, but you need a
trained work force, great locations, and the supporting sound/edit
stage infrastructure." Kurtz points out that "one of the features that
makes Louisiana's incentive program stand out is the transferability of
credits, allowing production companies unable to use all of their
credits to effectively sell those credits to companies that have the
ability to use them."
In 2005, Louisiana rolled back some of the
credits and tightened requirements that the credits apply to the work
performed in Louisiana. "We recognized that we were too generous in
rewarding film production work performed outside of the state and
brought those provisions back in line with the state's desire to build
our film industry infrastructure," Kurtz says.
Hurricane Katrina
forced the evacuation of film productions from New Orleans and other
locations. State film people worked hard to convince film production
people that the whole state was not submerged.
"Film industry
people have been very receptive to moving to other state locations. Our
film crews are busy and we are determined to keep as many productions
in Louisiana as we can," says Alex Schott, director of the Governor's
Office of Film and Television.
The efforts are paying off. The
production company for Warner Bros.' The Reaping, starring Hilary
Swank, moved to Baton Rouge to finish shooting. "Before we chose
Louisiana for filming The Reaping we looked at a number of world
settings," says Herb W. Gains, producer of The Reaping. "Louisiana gave
us a look far superior to other locales. The right combination of
financial incentives and creativity sealed the deal. After Katrina we
had a lot of thoughts about leaving. We did a damage assessment and
looked at options and came to the conclusion to stay in Louisiana to
keep people employed and working."
Long a favorite location for feature film
and television production companies, New York City fights for market
turf against Canadian and overseas locations. As a result of 2004
legislation, qualified film and television productions that meet a 75
percent requirement of work performed in New York can avail themselves
of a refundable tax credit (10 percent from the state and 5 percent
from the city).
To further enhance its competitive position,
Mayor Bloomberg initiated a 2005 "Made in NY" incentive program with a
15 percent tax credit for qualified productions, a marketing credit for
free advertising on city-owned media equal to 1 percent of New York
production costs, and a production company discount card for hotels,
car rentals, banking services, and goods and services from other
participating vendors.
"New York City's film and television
production industry employs 100,000 New Yorkers and generates $5
billion for our economy on an annual basis," says Kara Alaimo of the
NYC Mayor's Office of Film, Theatre and Broadcasting. "The `Made in NY'
incentive program has seen over $300 million in new film and television
production business since January 2005, with employment of 6,000 New
Yorkers.
