Michigan

Michigan to court Hollywood with hefty incentives

"Michigan has a great work force, great locations and now this great incentive," said Gov. Jennifer M. Granholm, who pushed for the legislation as part of a stimulus plan to boost jobs in a state that has been buffeted by layoffs in the auto industry. "We are rolling out the red carpet for the film industry."

Michigan, home of the automotive industry, is raising the stakes in the nationwide competition for Hollywood's lucrative film jobs.

In what it bills as the most generous film incentives program in the country, the Great Lake State is announcing today that it will begin offering a 40% rebate on production spending to filmmakers, as well as tax credits for companies that invest in new studios.

"Michigan has a great work force, great locations and now this great incentive," said Gov. Jennifer M. Granholm, who pushed for the legislation as part of a stimulus plan to boost jobs in a state that has been buffeted by layoffs in the auto industry. "We are rolling out the red carpet for the film industry."

So are many others. Dozens of states offer a barrage of rebates, tax credits and training programs designed to carve out their share of Hollywood's entertainment pie.

The move underscores California's vulnerability to so-called runaway production. Unlike most other states, California does not offer film incentives to keep its signature industry at home. That has cost the Los Angeles region thousands of feature film jobs in the last decade as producers have taken their projects to cheaper locales in foreign countries such as Canada and increasingly to states such as New Mexico and Connecticut.

Despite having a former movie star in Gov. Arnold Schwarzenegger, California officials have been unable to agree on how many, if any, sweeteners the industry deserves.

By contrast, Michigan's incentive package was overwhelmingly approved by the state legislature and is expected to be signed into law today by Granholm.

Michigan is hoping to duplicate the huge success that states such as New York, Louisiana and New Mexico have had in growing their film businesses through incentives. For example, production spending in New Mexico, which offers a 25% rebate on spending, has jumped tenfold since 2004 to about $500 million.

Michigan, which has hosted such films as "8 Mile," starring rapper Eminem, and the Tom Hanks gangster movie "Road to Perdition," currently draws only about $2 million a year in film production.

"We felt we needed to grab everyone's attention by having such an aggressive package," Michigan state Rep. Bill Huizenga said. "This is now the new gold standard for any incentive program."

Under the new program, producers would get 40 cents back for every $1 they spend on filming (double the existing rebate) and qualify for an additional 2% spending rebate if the film is shot in certain communities. The rebate covers salaries of crew members and above-the-line talent up to $2 million per person.

Additionally, the new law would provide a 25% tax credit for companies that invest in new film and digital media studios and would cover 50% of on-the-job training expenses for Michigan residents working as crew members.

Such incentives are appealing to film producers such as Hopwood DePree, a Michigan native who is converting a recently shuttered Reddi-wip factory in the city of Holland into a film studio. DePree, who lobbied for the film program, said some of the laid-off factory workers would be retrained as crew members for his upcoming film.

"The types of skills that these manufacturing workers have can easily translate into below-the-line crew positions," said DePree, who produced and starred in the independent film "Rhinoskin."

"I think it's going to be tremendously successful."

Re:Michigan to court Hollywood with hefty incentives

I read lopezdash's posting and it made me wonder...  if a digital media studio such as the one that creates Spout, or small multimedia web firms constitute the "digital media studios" and would be eligible for the 25% tax break quoted in the article.

Michigan has a number of small creative film, video and web multimedia production companies around, many of which have won local and national awards for productions in the area.  I think it would be great if Michigan could capitalize on the creative intellectual property in the area, much of which has been ignored by the mainstream in the adoration of the auto industry.

I am hoping that this takes off, and does advantage the small creative technical firms in the area as it is just what is needed to get not only the visual creative arts going in the state, but the technical, visionary impetus to allow Michigan's citizens to dream the great dreams of the teens and early twenties that seem to get squashed on the transition to adulthood.

Re:Michigan to court Hollywood with hefty incentives

aaronlrichards:

Further information is available at a Grand Rapids, MI meeting called AimWest.  Here is the info:

Marketing the Film Industry
in West Michigan:

A Conversation with Rep. Bill Huizinga!

Wednesday, June 4th

Location:

Urban Institute of Contemporary Arts (UICA) (map) 

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).  If you would like to register for this event, click here.

 

     

Re:Michigan to court Hollywood with hefty incentives

aaronlrichards:

I read lopezdash's posting and it made me wonder...  if a digital media studio such as the one that creates Spout, or small multimedia web firms constitute the "digital media studios" and would be eligible for the 25% tax break quoted in the article.

Michigan has a number of small creative film, video and web multimedia production companies around, many of which have won local and national awards for productions in the area.  I think it would be great if Michigan could capitalize on the creative intellectual property in the area, much of which has been ignored by the mainstream in the adoration of the auto industry.

I am hoping that this takes off, and does advantage the small creative technical firms in the area as it is just what is needed to get not only the visual creative arts going in the state, but the technical, visionary impetus to allow Michigan's citizens to dream the great dreams of the teens and early twenties that seem to get squashed on the transition to adulthood.

That's an interesting question, and one I'm going to definitely look into.

But I don't think the firms themselves qualify for the tax credit; instead the movie production company/studio applies for the tax credit for the monies spent in the filming and production of a film.

But your question gets at the central benefit of the incentives program: the significant increase in private investment in the state.  Not only is it designed to increase the number of productions filmed on location in Michigan, it is designed to attract production facilities, grow industry activities that support film production, create jobs, and train workers for those jobs.

Re:Michigan to court Hollywood with hefty incentives

lopezdash:

aaronlrichards:

I read lopezdash's posting and it made me wonder...  if a digital media studio such as the one that creates Spout, or small multimedia web firms constitute the "digital media studios" and would be eligible for the 25% tax break quoted in the article.

Michigan has a number of small creative film, video and web multimedia production companies around, many of which have won local and national awards for productions in the area.  I think it would be great if Michigan could capitalize on the creative intellectual property in the area, much of which has been ignored by the mainstream in the adoration of the auto industry.

I am hoping that this takes off, and does advantage the small creative technical firms in the area as it is just what is needed to get not only the visual creative arts going in the state, but the technical, visionary impetus to allow Michigan's citizens to dream the great dreams of the teens and early twenties that seem to get squashed on the transition to adulthood.

That's an interesting question, and one I'm going to definitely look into.

But I don't think the firms themselves qualify for the tax credit; instead the movie production company/studio applies for the tax credit for the monies spent in the filming and production of a film.

But your question gets at the central benefit of the incentives program: the significant increase in private investment in the state.  Not only is it designed to increase the number of productions filmed on location in Michigan, it is designed to attract production facilities, grow industry activities that support film production, create jobs, and train workers for those jobs.

I think the program is good to bring these companies in but it may have some bad effects on the budget of the state and on some funded programs. Ex. http://blog.mlive.com/peterluke/2008/05/movies_go_over_budget_all.html

Maybe the money that it brings to the local economy will offset some of that but maybe Michigan will go more in the hole.

Re:Michigan to court Hollywood with hefty incentives

corvine:

lopezdash:

aaronlrichards:

I read lopezdash's posting and it made me wonder...  if a digital media studio such as the one that creates Spout, or small multimedia web firms constitute the "digital media studios" and would be eligible for the 25% tax break quoted in the article.

Michigan has a number of small creative film, video and web multimedia production companies around, many of which have won local and national awards for productions in the area.  I think it would be great if Michigan could capitalize on the creative intellectual property in the area, much of which has been ignored by the mainstream in the adoration of the auto industry.

I am hoping that this takes off, and does advantage the small creative technical firms in the area as it is just what is needed to get not only the visual creative arts going in the state, but the technical, visionary impetus to allow Michigan's citizens to dream the great dreams of the teens and early twenties that seem to get squashed on the transition to adulthood.

That's an interesting question, and one I'm going to definitely look into.

But I don't think the firms themselves qualify for the tax credit; instead the movie production company/studio applies for the tax credit for the monies spent in the filming and production of a film.

But your question gets at the central benefit of the incentives program: the significant increase in private investment in the state.  Not only is it designed to increase the number of productions filmed on location in Michigan, it is designed to attract production facilities, grow industry activities that support film production, create jobs, and train workers for those jobs.

 

I think the program is good to bring these companies in but it may have some bad effects on the budget of the state and on some funded programs. Ex. http://blog.mlive.com/peterluke/2008/05/movies_go_over_budget_all.html

Maybe the money that it brings to the local economy will offset some of that but maybe Michigan will go more in the hole.

I think you're right.  Only time will tell really.  The whole immediate costs vs. short/long-term benefits isn't easy for some to swallow, particularly when it cuts into other social services we value as essential (such as education).

The main piece of legislation calls for a report on the tax credit's effectiveness to be delivered no later than March of each year following this one.  So we'll know next year.

Re:Michigan to court Hollywood with hefty incentives

aaronlrichards:

I read lopezdash's posting and it made me wonder...  if a digital media studio such as the one that creates Spout, or small multimedia web firms constitute the "digital media studios" and would be eligible for the 25% tax break quoted in the article.

Michigan has a number of small creative film, video and web multimedia production companies around, many of which have won local and national awards for productions in the area.  I think it would be great if Michigan could capitalize on the creative intellectual property in the area, much of which has been ignored by the mainstream in the adoration of the auto industry.

I am hoping that this takes off, and does advantage the small creative technical firms in the area as it is just what is needed to get not only the visual creative arts going in the state, but the technical, visionary impetus to allow Michigan's citizens to dream the great dreams of the teens and early twenties that seem to get squashed on the transition to adulthood.

I will try to look through the bills for a specific definition, but I'm not a tax lawyer so I wouldn't be able to say for sure whether small companies could apply for the tax credit.  But the credit is for money spent not for monies earned, so if a Michigan web development company creates a website for a movie filmed here in Michigan, the company benefits from the client they wouldn't have had otherwise and the film studio can apply for the tax credit.

From the Michigan Film Office:

2008 Incentive Bills Package

The 15 bills include:

HB-5841  - 40% - 42% Credit for production companies - *Main Piece* Amends MBT

HB-5842  - Phases out existing motion picture credit

SB-1170  - Technical bill - avoids an amendment by reference. Amends PA 122 of 1944

HB-5844  - Allows production co. to claim the 40% - 42% credit against income tax. Amends the Income Tax Act

SB-1173  - Tax credit for investment in film production infrastructure. Amends MBT

SB-1174  - Extends MEGA credits to production companies. Amends MEGA Act

HB-5848  - Allows for MSF loans for qualified film industry productions. *Main Piece* Amends MSF Act

SB-1176  - Gives production co. a worker job training tax credit. Amends MSF Act

SB-1177  - Enhance MFO & Transfer to the MEDC. Amend MSF Act

SB-1178  - Free use of state property. Amends Management and Budget Act

HB-5852  - Free use of state property. Amends MI Military Act

HB-5853  - Free use of state property. Amends NREPA

HB-5854  - Free use of state property. Amends PA 286 of 1964

HB-5855  - Free use of state property. Creates new Act

SB 1183  - Technical bill - changes HAL act to reflect the transfer of the MFO. Amends HAL Act

Re:Michigan to court Hollywood with hefty incentives

I heard that the incentives don't apply to commercials, which some people are upset about. And yes, lets hope that this does boost the economy and that the government wont recall these incentives.