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GRDadof3

Michigan Film-Making Projects/Tax Credits

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A new romantic comedy starring Hilary Duff is going to be shot in West Michigan, according to the Press today. Not a big production, but it's being made by TicTock Studios out of Holland.

http://blog.mlive.com/grpress/2008/04/hila..._be_filmed.html

I split this off into a new topic. In addition to the Hilary Duff and Joe Montagna movies being shot in West Michigan, there's this development story on the front page of today's Lansing State Journal:

Lansing movie studio plan could draw the biggies

CityCenterStudios1.jpg

CityCenterStudios2.jpg

This is a direct result of the State's tax credits recently passed for movie production.

http://www.urbanplanet.org/forums/City-Cen...ios-t46533.html

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Though not exposure for Grand Rapids, check out the development story on the front page of today's Lansing State Journal:

Lansing movie studio plan could draw the biggies

CityCenterStudios1.jpg

CityCenterStudios2.jpg

This is a direct result of the State's tax credits recently passed for movie production.

http://www.urbanplanet.org/forums/City-Cen...ios-t46533.html

We should move your post to its own threat about the movie tax credits.

I swear (and I should have paid more attention to this) that I've been hearing politicians from one aisle or the other (again, not sure who) basically complaining that we're giving too many tax breaks and we should cut them back.

I think the argument they're making is that all these movies are being made here but not paying taxes.

Did anyone else catch this? It seems completely asinine to me... they wouldn't be here but for the tax breaks...and at least while they're here, they're spending money (sales tax, hotel rooms, food, rental cars, etc).

Anyway, did anyone else hear that? I haven't bothered to Google this yet, but seeing this proposal in Lansing has me thinking: If we roll back that film credit, will this thing ever get built?

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We should move your post to its own threat about the movie tax credits.

I swear (and I should have paid more attention to this) that I've been hearing politicians from one aisle or the other (again, not sure who) basically complaining that we're giving too many tax breaks and we should cut them back.

I think the argument they're making is that all these movies are being made here but not paying taxes.

Did anyone else catch this? It seems completely asinine to me... they wouldn't be here but for the tax breaks...and at least while they're here, they're spending money (sales tax, hotel rooms, food, rental cars, etc).

Anyway, did anyone else hear that? I haven't bothered to Google this yet, but seeing this proposal in Lansing has me thinking: If we roll back that film credit, will this thing ever get built?

Yes, suyday, I have read criticisms of this new film tax credit. I'll have to see if I can dig up some of it.

Don Grimes of the University of Michigan is one critic:

http://blog.mlive.com/annarbornews_opinion...on_moviebi.html

There's also a film studio in the works for Southeast Michigan:

http://www.mlive.com/movies/index.ssf/2008...dio_eyed_f.html

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Is anyone going to this event?

"Marketing the Film Industry

in West Michigan:

A Conversation with Rep. Bill Huizinga!

Wednesday, June 4th

Location: Urban Institute of Contemporary Arts (UICA)

Networking Time: 5:30 p.m.

Panel Discussion: 6:00 p.m.

Join us to discuss West Michigan's burgeoning film industry with State Rep. Bill Huizinga. As a sponsor of legislation that incentivizes the production of movies and TV shows in Michigan, Rep. Huizinga is closely involved with the growing interest in Michigan as a new film-industry hot spot.

Rep. Huizinga will discuss:

The incentives offered to film producers

The impact to our local economy

Opportunities for existing businesses

Supporting a new film industry in West Michigan

Please bring your questions and contribute to the conversation, as we explore the many facets of this new and exciting opportunity!

The event is free for aimWest members. $20 for non-members (cash or check)." ~

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Is GR going to miss the boat on this? Why allow Lansing to beat us to the punch? I wonder if it has anything to do with the conservative community not wanting any "R" rated movies being made in the community?

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Funny how existing businesses (you know, the people who actually live in and support all Michigan businesses) had more taxes shoved up their azz this year with the ill concieved MBT and then moviemakers come from outside the state and get around 50% of their production costs paid for by you and me, the Michigan taxpayers. It's nice that we are doing that. We will sell some food and rent some hotel rooms. Then they will take all of their profits back to where they came from. Seems brilliant to me.

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Funny how existing businesses (you know, the people who actually live in and support all Michigan businesses) had more taxes shoved up their azz this year with the ill concieved MBT and then moviemakers come from outside the state and get around 50% of their production costs paid for by you and me, the Michigan taxpayers. It's nice that we are doing that. We will sell some food and rent some hotel rooms. Then they will take all of their profits back to where they came from. Seems brilliant to me.

Personally, I don't look at it that way. We taxpayers are not paying for their production costs, because they wouldn't be producing here without the incentives (very unlikely anyway). We're just taking less taxes than would normally be taken. If there were no tax incentives, and the production companies were taxed at full levels, it would still be zero, because they would film elsewhere. A larger percentage of zero (without the tax incentives) is still zero. I see it more like deeply discounting the convention center in order to get more conventions here, in order to get the spinoff benefits. Most of the movie studios are not actually setting up a "business" here, except the two proposed production facilities in Lansing and Southeast Michigan. And in those cases, the profits/payroll/etc. would stay here.

The MBT is a separate issue IMO.

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Hmmmm tax credits spuring economic development....any lawmakers paying attention?

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Personally, I don't look at it that way. We taxpayers are not paying for their production costs, because they wouldn't be producing here without the incentives (very unlikely anyway). We're just taking less taxes than would normally be taken. If there were no tax incentives, and the production companies were taxed at full levels, it would still be zero, because they would film elsewhere. A larger percentage of zero (without the tax incentives) is still zero. I see it more like deeply discounting the convention center in order to get more conventions here, in order to get the spinoff benefits. Most of the movie studios are not actually setting up a "business" here, except the two proposed production facilities in Lansing and Southeast Michigan. And in those cases, the profits/payroll/etc. would stay here.

The MBT is a separate issue IMO.

Unless I understand it incorrectly, it is not really a tax incentive. It is a subsidy incentive on up to 42% of a productions overall costs.

As I understand it, the incentive works like this: Film production costs of, say, $10 million qualify for a $4.2 million check from the state treasury.

If I am correct and the above example is correct, it's crap.

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FYI, this comes from the latest newsletter from the West Michigan Film and Video Association (obviously, an organization with a vested interest in the tax incentives), but it does offer some useful information:

Good and Bad News at the Commerce Committee Meeting

On May 27 the House Commerce Committee met in Lansing. They had three bills to discuss before the last item on their agenda - an update on the film incentives. They dispatched the testimony on the three bills in a half hour and spent nearly two on the film incentive update - a most instructive meeting! Janet Lockwood was there to fill the committee members in on what's been happening so far.

The most important issues of good news/bad news were detailed:

The film incentives are the most successful tax incentive ever seen in terms of stimulating business with immediate results. Out of 100 scripts submitted to date, 44 are still in the approval process, 21 have been approved by the Michigan Treasury, for budgets totaling $47 - 50 million. The projected spending by the end of this year is for somewhere around $228 million. NOT ALL REBATES ARE FOR 40-42%. Some are 30%, some are less.

Despite the dramatic, immediate and successful response to the tax incentives, some agencies and individuals are claiming the Michigan budget can't handle the rebates. Even legislators are second-guessing their once-unanimous votes. In other words, critics are claiming the tax revenues collected from film budget spending will not exceed or match what the state will owe to filmmakers.

There is a vacuum in reporting the impact to date from the "multiplier effect" of film budget spending in Michigan - in part because most major film companies haven't gotten beyond the scouting stage here. However, testimony from several attendees at the committee meeting spoke to businesses such as furniture companies, car rental services, janitorial and real estate that have received heavy cash infusions and have even been saved from bankruptcy due to the early spending from film companies setting up production offices here. These stories need to be told to halt the push to "correct" the film incentives.

Michigan Filmmakers are eligible for all incentives, no exceptions. However, "Infrastructure" is interpreted to mean "bricks and mortar" i.e. buildings, not equipment. Therefore, applications for incentive support to purchase/upgrade to (for example) 3D post-production, a new crane, camera lenses, etc. will be denied at this time. Chair Meisner said this could be considered further, but there are bigger fish to fry at the moment. Read on.

Now the bad news: First of all, the Michigan Treasury has decided that commercials do not qualify for the incentives. Commerce Committee Chair Andy Meisner spoke forcefully to the point that the legislative intention was that commercials would be included in the incentive package. Janet Lockwood was asked to comment and responded, "I have all the influence on this of my cat," indicating equally as forcefully that she can do nothing to impact this situation. The matter must be resolved by the legislators and Treasury. At this moment, the next course of action seems to be further hearing, perhaps with representatives from Treasury.

Another serious concern: The State Chamber of Commerce has resolved that the film incentives are "indefensible." This position taken by a major representative of business in the state is driving concerns that the film incentives will be curtailed before they are even given a chance to pay off. Thankfully, here in West Michigan, our Chamber Coalition is squarely on the record for supporting the incentives. It is probably worth your time to check in your community on where your chamber stands on this matter.

Additional details will be posted in the future. Stay vigilant! Collect good news and let's keep sharing it via the list serve and community press releases. It is CRITICAL that communities see their futures tied to this industry! And stay in touch with your legislators if you want them to listen to you when the chips are down - if you haven't written that thank you letter on behalf of passage of the incentives, this might be the time to do so - and remind them of your thoughts on the commercial inclusion issue. - Deb Havens

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Michigan Filmmakers are eligible for all incentives, no exceptions. However, "Infrastructure" is interpreted to mean "bricks and mortar" i.e. buildings, not equipment. Therefore, applications for incentive support to purchase/upgrade to (for example) 3D post-production, a new crane, camera lenses, etc. will be denied at this time.

Furthermore, the Michigan Treasury has decided that commercials do not qualify for the incentives.

Exactly. In its current interpretation, there is nothing in the law that encourages Michigan residents to invest in the equipment that is necessary to support significant growth in Michigan film making. According to the Commerce Committee, equipment does NOT at this time qualify for the incentive. Which is why the studio facility (the bldg shell itself) at the top of this thread could get built by someone who is crazy enough to take the risk, but it is very unlikely to ever get filled with all the equipment that is actually required to light, shoot, process, edit and ultimately produce a film. I can assure you that all this equipment is way more expensive than the building - and that without equipment, that facility is doomed from the start. As a result, this tax legislation is totally ineffective in its current state. And... the malaise this "incentive package" has now descended into is the direct result of star-struck, misinformed legislators trying to quick-fix a symptom while refusing to pursue a more comprehensive treatment that might truly cure the ailment that lies behind those symptoms.

I will save you my really lengthy diatribe on this topic and give you the simple truth on this issue: for Michigan to attract "feature" film production in any significant volume it MUST have a healthy, vibrant, "commercial" (non feature film) production environment in place that is capable of supporting the additional (albeit sporadic) volume of work "features" could bring to Michigan over the long term. As stated above, this law does very little if anything to help existing IN-STATE commercial film makers expand their technical capabilities... and its current interpretation specifically excludes the non-feature "commercial" production projects that these enterprises need and count on to succeed and grow. This is why this legislation is woefully misdirected.

Allow me to explain. Even though "features" receive a lot of media attention and boast of "big budgets", the simple truth is that they collectively represent only about 15 percent of the total money spent on film making in the US each year. The remaining 85 percent of that money is spent on commercial, corporate and documentary production. While it is exciting to read headlines about a "feature" or famous actor coming to Michigan, the fact is that a feature shoot rarely lasts longer than a few short weeks. The crew and equipment necessary to support "big features" MUST have a way to make a living the remaining 40-48 weeks each year. Commercial (non feature film) production is how that happens. It is simply impossible for any of this infrastructure to survive on feature films alone. Every legitimate film making professional and production facility operator in this state who has managed to survive this economic downturn will tell you this.

This "incentive package" is basically a cart before the horse scenario. As proof: I am now receiving calls from a growing number out of state film makers who mostly complain about the lack of abundant studios, production facilities and abundant production crew here in Michigan. I am forced to tell them that this Michigan "incentive package" has created absolutely no incentive for me or my peers to invest our hard earned money in major expansions of our existing production capabilities - and that we, as seasoned industry professionals and responsible business owners, cannot jeopardize the long term survival of our businesses on the "promise" of a few weeks worth of work each year from a few out of state "features" - especially in a period of serious economic instability and tight credit. When I explain this to these callers, most are very quick to acknowledge that Michigan's incentive package is indeed flawed. The few that don't understand this dilemma go on to say other things that quickly reveal their desire to "come here - make a fast buck at the expense of someone else - and get out quickly".

For the sake of brevity, I'll stop my comments short and offer a few alternative thoughts on how film making might be better served by legislative action. One significant way would be to find ways to diminish the burden of the MBT, property taxes (on equipment), payroll taxes, work comp, health care and all other often unreasonable small-to-medium sized business expenses that challenge existing IN STATE film production companies. Quite simply, tax laws are written in this state to mostly serve manufacturing style businesses and the other industries that support manufacturing. The unique challenges faced by service based businesses, especially the creative based industries, have been ignored for far too long. Fix these issues and creative professionals might actually have a fighting chance in this economy - and might even find themselves able to invest and grow their businesses as a result.

And doing something to help all the small to medium sized production companies in our state will help the even greater number of individual, sole-proprietor, "freelance" professionals who serve those production companies and who make up the vast majority of the film making industry. The state could also do a great many things to relieve the unique burdens faced by these self-employed people: health care, taxes, property values, banking, credit issues, etc. I can assure you that the freelance community is among the most underserved in our state when it comes to "employment benefits" and economic uncertainty. I haven't even mentioned all other peripheral trades like carpenters, truck drivers, etc - but they are clearly among this same massive group of low to middle income self employed people who continue to suffer the broader economic woes brought on by an incompetent and ineffective legislature.

Bottom line as it is currently written? This incentive package is in no way sustainable in any sense of the word. Existing film production companies and professionals in Michigan stand to gain very little from this incentive package as it is currently being applied. In fact, they are very likely to suffer collateral damage as they share in the budgetary tax burden this is likely to place on individual and corporate Michigan taxpayers as a whole. The only winners may be a few hotels, restaurants and car rental companies that might reap some short term benefit. But any reasonable person has to seriously wonder how many hotel rooms and cars will need to be rented (or doughnuts and boxed lunches will need to be consumed) to generate enough tax to off set the huge checks Michigan seems hell bent on writing to out of state film makers.

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Spot on, FilmMaker ! For the love of all things good and pure, please submit a piece to the GR Press, Biz Journal, Metro Times and anybody else that puts ink on paper and clear up all the jive about this program...

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Pete Secchia is trying to convince anyone that will listen that this is going to lead to GR being the new porn capital of the world.

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Pete Secchia is trying to convince anyone that will listen that this is going to lead to GR being the new porn capital of the world.

Does Secchia think that's a good thing or a bad thing?

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Does Secchia think that's a good thing or a bad thing?

Good question, lol.

Also, I should have said "Michigan" and not "GR", but the implication is the same I suppose.

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Do you have a quote? I find that hilarious if true.

Sorry, no quote, I heard it first hand.

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BREAKING NEWS ALERT FROM WWW.GRBJ.COM

Film Studio To Be Built In Former Shaw Walker Factory

The Grand Rapids Business Journal is reporting the New York developer of Watermark Center condos in downtown Muskegon at the former Shaw Walker furniture plant will also build a multimillion-dollar film production studio there, to take advantage of Michigan's film industry incentive payments.

Read more about this story at www.grbj.com.

huzzah.

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Pete Secchia is trying to convince anyone that will listen that this is going to lead to GR being the new porn capital of the world.

Don't worry, Secchia will flip-flop on porn like he did on the casinos. After years of fighting the tribes he now is in favor of making downtown Grand Rapids a gambling mecca.

Give him a few months and he'll come out in favor of porn too... :wub::yahoo::good::alc: (that's a lot of emoticons)

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His argument will be that since they'll be making porn down in Wayland, they might as well put the porn studio downtown so Grand Rapids doesn't miss out on the economic benefit.

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His argument will be that since they'll be making porn down in Wayland, they might as well put the porn studio downtown so Grand Rapids doesn't miss out on the economic benefit.

Exactly, AlexPKeaton...why should all that dirty porn money have to stay in The Valley? We should get us some of that too. :camera:

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They came to Grand Rapids for far more than shooting at the Calder. They've performed at the Intersection for like 6-7 years and new they would draw a great crowd to shoot the video with. Having been at the concert that night while they were shooting, there's no way they would've found a more pumped up, excited and rowdy (in a good way) crowd to showcase in their video. They wanted their video to show how exciting their live show is and that's why they picked GR & The Intersection (The video doesn't do a great job of showing this at all but that was the intent)

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