Extra dollars coming to Michigan film industry

Posted on May 25, 2012

Michigan’s ailing movie industry has won a key victory by getting Gov. Rick Snyder to agree to double the money spent on film grants. But industry players warned that this one-time injection of additional dollars won’t be enough to regain Hollywood’s enthusiasm for the state.

“It’s a good thing but it is not the way you build an industry,” said James Burnstein, a University of Michigan professor and Hollywood screenwriter who helped lead the push for film incentives a few years ago. “Hopefully it’s a first step.”

The budget agreement unveiled Wednesday in Lansing would double the state’s film grants to $50 million in the new fiscal year that starts in October, up from $25 million. The higher cap, which must still be approved by legislators, is far less than the $100 million that the industry had been seeking, and it is available for only one fiscal year.

But the extra money would make it a little easier for the state to attract more big-budget films, something it is struggling to do this year. These kinds of movies are crucial for the survival of the $80-million Raleigh Michigan Studios in Pontiac, whose seven sound stages have been empty since January.

“This industry is here for a long time and we will grow it,” said Linden Nelson, who as head of the studio and one of its owners thanked Snyder and Sen. Majority Leader Randy Richardville, R-Monroe. “We hope to be able to use this money to attract other projects to the state.”

In February 2011, Snyder shook up the industry by putting a $25-million annual cap on film incentives, less than a quarter of the $115 million awarded in 2010. From April 2008 until the end of 2011, these incentives took the form of tax credits worth up to 42% of production expenditures, the highest in the nation. Those credits were replaced in January by grants worth up to 35% of production spending.

The cap, the reduced incentive level and other factors have sharply curtailed filming in the state. So far this year, the Michigan Film Office has received 15 applications for the film grants, compared with 66 in the first five months of 2011. It has approved only one incentive, a $79,000 grant for a small movie that will be filmed in Petoskey in June. Contrast that with last year, when eight productions that were approved for the incentives had wrapped up filming by mid-June.

Bigger films that came to Michigan last year included Walt Disney’s “Oz the Great and Powerful,” which spent $105 million filming at Raleigh Michigan Studios, and “The Five-Year Engagement,” which spent $18.5 million in Ann Arbor and Detroit.

“Fifty million will definitely help attract more business to the state,” said Joe Bessacini, vice president of film and TV production incentives at Cast & Crew Entertainment Services, based in Burbank, Calif. “The damage has been done but it’s to be seen whether it can be rectified or not.”

“A lot of people are going to have to take another look at Michigan,” said Scott Robinson, who as head of production at Los Angeles-based Freedom Films brought five movies to the state in recent years but now uses Louisiana for most of his films. “Making movies there was a great experience.”

Leading states for movie production such as Louisiana, Georgia and New York allocate money for film incentives over a multi-year period, which gives Hollywood the stability it needs to make long-term plans. But in Michigan, the money set aside for its film grants is now decided every spring during state budget negotiations.

Location manager Dave Krieger, who has worked on projects like “The Ides of March,” applauded Richardville for his persistence in trying to increase the grant funding. But he said, “Until we can consistently offer an incentive that employs three or four working crews and we can assure Hollywood it isn’t a yearly battle for funding, Michigan won’t again become a top location for filmmaking.”

Industry insiders are predicting a handful of productions will be filming in the Detroit area this summer. The Film Office is expected to announce shortly that it has approved incentives for a few productions, including a Warner Bros. movie about a killer tornado called “Category 6” that plans to spend $41 million in the state.

But this level of activity is much lower than during previous summers when as many as 12 projects were filming simultaneously around the state and five others, including “Transformers 3,” were preparing to go into production.

The reduction in film work has hurt hundreds of workers in the industry and many local businesses, all of whom had benefitted from the millions spent by production companies in the state each year.

“It’s definitely slower,” said Kate Bennett of Rochester Hills, a 32-year-old costume designer who was hired by four movies in 2011 but can’t find any work so far this year. “I’m really frustrated.”

Bennett and others in the industry are waiting to see how much work they will be able to get this summer. Cal Hazelbaker, business representative for Local 38 of the International Association of Theatrical Stage Employees in Detroit, expects four movies to be filmed in metro Detroit in the next three months.

“Everybody is anxious to get back to work,” he said.

Katherine Yung & Julie Hinds, Detroit Free Press