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Posted May 31, 2008, 5:15 PM
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Join Date: Aug 2006
Location: Austin
Posts: 2,272
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This topic was the feature story in last week's Austin Chronicle
http://www.austinchronicle.com/gyrob...d=oid%3A627424
Abandoning the Nest
Hurt by the state's inadequate incentives program, Texas film crews take flight
May 23, 2008
BY JOE O'CONNELL
Filming of There Will Be Blood near Marfa was in its second day when Daniel Day-Lewis fell down a mine shaft and broke two ribs. Few in the Texas film industry will be surprised that Raigen Thornton, a jovial bear of a man, was there in an instant to render aid. The veteran set paramedic and his satellite-equipped truck always seem to be nearby, ready and waiting. But this time the patient is the film industry itself, and Thornton hasn't got a bandage big enough to stop the bleeding.
Consider the facts: Between 1998 and 2006, Hollywood studio films had combined production in Texas of more than $530 million, averaging eight or nine films a year, according to Texas Film Commission figures. The entire year of 2007 eked out a mere $300,000 for the few days that A Mighty Heart landed in Austin. Even independent films are veering from the Lone Star State, with a drop in numbers from 37 tracked by the Texas Film Commission in 2006 to nine in 2007. It's no big surprise who the culprit is: States like neighboring New Mexico and Louisiana offer heftier incentives to entice Hollywood to come a-calling.
More on that later. For now, here are the figures that concern Thornton and his fellow film crew professionals: Between 1998 and 2006, those Hollywood films produced more than 8,300 temporary crew jobs. In 2007, it was 20. Ouch. The independents created almost 8,500 temporary crew openings during the same time frame – almost 1,800 in 2006 alone – but only 461 jobs in 2007. Double ouch.
This year won't be nearly as dismal, says Ken Rector, business manager of the International Alliance of Theatrical Stage Employees Local 484, the union of film crew workers in Texas. Terrence Malick has been filming long-planned epic The Tree of Life in Smithville, and Platinum Dunes is lensing a Friday the 13th reimagining in Central Texas. But Rector believes the uptick has much to do with the threat of an actors strike and the associated rush to production. Rector says the slowing of the Texas film industry is resulting in, conservatively, a 10% loss of the state's trained, rested, and ready crew base each year but potentially as high as 25%. IATSE Local 484 claims more than 600 members, but overall crew and peripheral workers in Texas is perhaps closer to 3,000, not including actors, says Steve Belsky, the local union's president.
Thornton feels that pain. Like much of Texas' film crew, he wouldn't be mistaken for an A/V geek or a stereotypical artsy hipster. Instead, he's a San Saba native and Round Rock High grad who worked as a police officer in Odessa before training as a paramedic. He's patched up people everywhere from Kuwait, during the war there in the early Nineties, to offshore oil rigs where he aided divers. But he had kids back in Texas and wanted to be home nights. Movies were the answer. His first feature was Frankie Starlight, shot on the King Ranch in 1994. "They were paying cash," he says of that first gig. "It was interesting and different. It wasn't quite as good of money as working offshore, but I could stay in my own bed."
Friday Night Lights was his personal godsend. He returned to Odessa to work the 2004 film on a set protected by guys he'd served with on the police force there years ago. Then the NBC series landed in Austin, oh so close to his home in Granger, and he seemed set. But the Writers Guild strike halted the show, which managed to eke out a third season through an NBC deal with DirecTV but won't resume production until July. Plus, Kick the Can, a smaller film he'd hoped to work on in the interim, was pushed back due to financing woes. With the slowdown in the Texas film industry, all of the other film paramedic positions are taken, and he's left scrambling for another job to pay the bills. "It's my whole life," Thornton said of the film/television work. "I've been doing this longer than I worked street EMS before. People don't come to Texas as much. I used to work all over the state. I've probably worked in half the counties in the state. Now it's down to a few."
Blame Canada. And maybe Oklahoma. In 1997, Canada enacted film incentives legislation that, combined with the then-weak Canadian dollar, sent shock waves through the U.S. film scene. Suddenly runaway film production was a major concern, and first to go were the made-for-television films, a mainstay in Houston, which in 1995 had been the state's production leader, drawing projects with combined budgets of more than $60 million, while Dallas and Austin were right behind at $52 million and $57 million, respectively. Soon, Houston was lucky to attract $10 million a year while Dallas, with its solid crew base, began to rely more and more on commercial shoots and industrial films. Austin pulled way ahead in the 2000s, averaging more than $100 million in production a year for the first half of the decade on the strength of the Austin Film Society's Austin Studios, homeboys like Richard Linklater and Robert Rodriguez, a reputation as a hip and fun college town, diverse locations, and an ever-expanding crew base. But then, on May 23, 2001, Oklahoma Gov. Frank Keating signed into law the Compete With Canada Act, which offered a sales-tax exemption or a 15% rebate on money spent in the state and created the first state film incentive program. It wouldn't be the last.
Jourdan Henderson perhaps epitomizes the young crew worker attracted to Austin, the cool film boomtown of recent vintage. The Kerrville native graduated from Texas A&M-Corpus Christi and decided to take a baby step into the film industry by moving to Austin instead of Los Angeles. "Growing up, I really loved movies and television, and I always watched the behind-the-scenes stuff," she says. "It's just the fact [that] it's something people go to as an escape. You work so hard on it, and I actually get to see what I do on the big screen. It ends up being rewarding." Her first job was as a production assistant on Spy Kids 2, but she quickly developed a career as an art department coordinator on Austin films. Her duties include tracking budgets and getting clearances but change rapidly from day to day, a pace she enjoys. The lull between films became her big concern, but a few commercials filled the gaps, and she has never had to take a job outside of the industry. "One year in Austin we had five films going on at one time," she recalls. "It seemed like it was going to happen, but our balloon deflated quickly." Her friends in the industry began to scatter. One started designing furniture, another took a bakery job, and yet another did dispatching for a cattle company. Henderson instead left for film work outside of Texas. She has spent four months of the last two years in Austin and is currently on location in Boston. She says the projects available in Austin now would largely require her to take a pay cut. "I'm not done until the end of August with this project," she says. "I want to see what's happening in Austin. I don't think I'll give it up completely, but I may have to give it up as a permanent residence. It's a decision I'll have to make by the end of the year."
Texas finally joined the incentives race in 2007, when the film industry banded together as the Texas Motion Picture Alliance and convinced the Legislature to approve a two-year program funded at $10 million a year, with an additional $2 million set aside for creation of a state film archive, crew training programs, and administrative costs. It came after a 2005 program that was approved without funding by the Legislature and offered a scant 5% rebate (the original bill asked for 20%) and included a befuddling, bemusing clause that precludes payment for films that "portray Texas or Texans in a negative fashion."
Belsky, the outspoken union president, admits that even that wasn't easy to come by. "It was by the skin of our teeth that it passed," he says, despite a lack of any real opposition.
New Mexico reacted to the news by upping its 20% incentive to 25%, the same amount offered by Louisiana. New Mexico has seen a leap in film production from $1.5 million in 2001 to $80 million in 2003 to about $400 million in 2007, while Louisiana claims an economic impact – a hazier figure to pin down than a direct spend – of about $600 million in 2007. New Mexico takes it a step further than most states by also offering interest-free loans for as much as $15 million in return for a share of profits. Texas, meanwhile, relied on $67 million from television shoots and close to $110 million from commercials, corporate films, sports broadcasts, and animation to keep the industry alive in 2007. Another $108 million came in from a growing video-game industry, according to Texas Film Commission figures.
The worst-kept secret in the Texas film scene is that an increase from a 5% to a 15% incentive is the goal for the 2009 Legislative session. Bob Hudgins, head of the Texas Film Commission, admits that the current incentive level is primarily attracting commercial shoots, which fall under the radar of Louisiana and New Mexico incentives, and is perhaps helping keep some television work here. The industry's savior the last two years has been filming of the television shows Prison Break in the Dallas area and Friday Night Lights around Austin. Despite incentives, Prison Break is moving production to Los Angeles this year to follow a new plotline. So far, 95 completed projects, including the two TV series, have applied for Texas film incentive funds for a pending payout of $6 million. Of the applications, 72 are for commercials. "The reason we haven't used as much as we've had available," Hudgins explains, "is frankly because our 5 percent is not competitive with what other states are doing."
Belsky's dream is to build the crew union up to 900 members and attract eight to 12 productions with budgets of $15 million or more a year. He's less sure about the need to build more studios like Villa Muse, the large studio project that promises to break ground this year in Texas, just no longer in Austin (Villa Muse failed to come to an agreement with the city; see "Villa Muse Rolls the Credits," News, May 9). "There's an ancient proverb: 'If you build it, they will leave,'" says Belsky. "You can see it out there. Arizona built studios, and, poof, they were gone." And, yes, movie studios are popping up in both New Mexico and Louisiana.
The original dig on our two neighbors when they enacted film incentives was that they didn't have a crew base to support it. Over time they have developed one, says IATSE Local 484's Rector, through training new people and recruiting established workers, many from Texas, others from California seeking to leave the rat race. "They're short on diversity of locations, but they have the crew base now," Rector says. He muses that the last Oscars would have showcased a Texas filmmaking powerhouse if our state had incentives to keep Texas-set stories like No Country for Old Men from New Mexico and Charlie Wilson's War and The Great Debaters from Louisiana. He believes 50% or more of the work opportunities for Texas crews have gone elsewhere since the state incentives game started being played in earnest. He and Belsky aren't opposed to piggybacking onto New Mexico's incentives program, to Texas' advantage, and made a recent trip to El Paso to promote training of new crew members along the Texas-New Mexico border, with El Paso providing the big city look for films shooting in nearby Las Cruces.
Louisiana has proved that incentives are mightier than the storm. New Orleans was on track to be a major U.S. film hub when Hurricane Katrina tore it apart in 2005. Into the void stepped Shreveport, a former oil town now best known for its riverboat gambling. With a population somewhere between Waco and Corpus Christi, it has fashioned itself now as Hollywood South. Jerry Henery, a film construction coordinator from the Terrell, Texas, area, now keeps an apartment in Shreveport, claims dual residency, and is looking at buying land there after more than 20 years in the Texas film business. "I've basically been working in Shreveport for the last three or four years," he says. "There's been no work in Texas. Last year I was [in Texas] for two months. The two years before that I wasn't there at all except for holidays." He brings with him to Louisiana a construction crew of four and sees familiar Texas faces in other departments, like paint and props. "Lots of people are doing the same thing with dual residency," he says.
Jeff Nightbyrd glimpsed the film industry's Louisiana future and opened a second office of his Austin-based Acclaim Talent in New Orleans in early 2005. When Katrina hit, the city of Shreveport offered him free offices there until he found the space he wanted. Since then, he's also opened the Actors' Cafe, bringing to Shreveport a touch of the arts scene of the "weird" Austin. Nightbyrd, a longtime Austinite (and occasional Austin Chronicle contributor), thinks Shreveport took advantage of New Orleans' loss in a way savvier Texas cities might have. "Austin could have jumped on it," he says. "The improbable thing is Shreveport did. Strangely this has become the third film production center in the country. Los Angeles, New York, and Shreveport? That's absolutely jaw-dropping. We have more than 30 films on our boards, and they're shooting three Hollywood films right now in a city about the size of Waco – actually a little larger than Waco. I've had people doing table reads with Denzel Washington and Forest Whitaker." In one cruel twist, Shreveport is doubling for New Orleans, still considered an iffy filming location, in Microwave Park, a story set among post-Hurricane Katrina gangs.
Most Texas actors aren't relying on films to survive, says Linda Dowell of the Screen Actors Guild's Dallas office, so they aren't seeing the need to move out of state like crew hands are. "We experience a number of performers commuting back and forth for day play or weekly parts," she says. "We see it in all parts of the state. Most of our talent have not moved, but we see them go over for auditions, sometimes second auditions."
When Nightbyrd first considered opening a Louisiana office, he spoke to Mark Smith, former director of the Louisiana Governor's Office of Film and Television Development. "My first impression was, 'Damn, this guy is smart,'" Nightbyrd says. "He had a vision." Smith also had a corruption problem and pleaded guilty to accepting bribes and accepting inflated film expense reports for film projects. He reportedly diverted about $10 million from the incentives program to fund three Louisiana music festivals. Louisiana offers filmmakers state income-tax credits, not straightforward payments like in New Mexico, which means the 25% credits must be brokered, reducing the actual amount claimed by filmmakers. Hudgins of the Texas Film Commission says 18% is a more realistic take in the end.
Nightbyrd thinks Louisiana's main advantage is one that Texas can't overcome: It's smaller both in geography and population, so coming to a consensus on funding film incentives proved easier. Meanwhile, Texans in areas not normally known for film production are harder to convince. "The state will never pass a meaningful incentives bill," says Nightbyrd. "Why? Only two cities will benefit – Dallas and Austin. Why would Texarkana vote for something that doesn't benefit them?" He has long said the cities must be the ones to offer competitive incentives in Texas. "The deal is that Austin used to be the center of independent film," he says. "The city could have generated their own program."
On the other hand, Rector says the real potential beneficiaries of a larger Texas film incentives program are not the large cities. "You go to a small town where a movie is shooting, and everyone is happy," he says. "The value of a dollar is much higher than in Dallas and Houston." Those areas outside of the larger cities get a boost in the current Texas incentive to 6.25% as underutilized areas. Plus, Rector claims Texas is offering a larger incentive, but film studios are not regularly taking advantage of it – an 8.25% manufacturing sales-tax rebate that is seldom talked about, because it requires filmmakers to keep track of retail purchases.
But even with those added amounts, Texas is offering far less than other states. Michigan recently approved an eye-popping 40% incentive, and New York, aiming to fend off film losses to neighboring Connecticut, matched that state's 30% incentive. Even the industry's base in California is feeling the heat. Gov. Arnold Schwarzenegger is urging an increase in that state's incentives to keep the studios filming at home, while others there are concerned about giving away too much during tough economic times. Gary Bond of the Austin Film Office recently attended a Locations Expo in Los Angeles, where the ever-growing incentives were the main topic of discussion. "You wonder about folks not being able to quite justify the incentives they're offering," he says. "It may level off before very long. There's only so much money coming back. Do we end up with the old cotton allotment where we pay people not to make movies?"
Belsky sees a future for the Texas film industry "if the planets align." But he believes the threat is very real. "I don't want to overstate the urgency because of fear of crying wolf," he says, "but we're on the cusp of it turning so far away from us. Every additional increment we fall behind these other states as they build up their infrastructure, it's that much harder to say we still have something to offer." Belsky sees hope through Hudgins, who replaced respected longtime Texas Film Commission leader Tom Copeland in 2006. "Tom Copeland was everybody's godfather," Belsky says. "I was nervous when he left, but this guy Bob Hudgins is so sharp, so motivated, and so on point. If everything he's trying to do comes together, it won't be too late."
Out in Granger where Thornton lives, that urgency is very real. Even in the country, film permeates his life. One day a few years ago, his wife caught some young boys peeking in the kitchen window. They were in search of the area house used in Platinum Dunes' recent Texas Chainsaw Massacre remakes. "It [was] a great career change for me until now," Thornton says. "Until we started losing shows. I was able to stay at home most of the time and watch my family grow. It's not going to pay the bills with all of the movies going away."
Also see this associated piece from the same edition of the Austin Chronicle:
http://www.austinchronicle.com/gyrob...d=oid%3A627425
The United States of Savings
How Texas' incentives stack up
The Texas Film Commission crunched the numbers to compare what kind of incentives each state offers for a $20 million production. Of the country's filmmaking hubs, Texas came in dead last.
Michigan
Total Return: $8 million
Income Tax Credit:
• 40% cash rebate, across the board, on Michigan expenditures, with a spending threshold of $50,000.
• Add 2% if filmed in Michigan core community.
• Capped at $2 million salary per employee counted in project's expenses, including out-of-state workforce.
• Labor and crew: 40-42% resident, 30% nonresident.
New York
Total Return: $6-7 million
Refundable Tax Credit:
• 30% of eligible production expenditures including payroll.
• Production must film at least 75% of total stage work on a qualified NY soundstage.
• Funded at $60 million per year until 2012.
• NYC provides additional 5% tax credit up to $30 million annually for filming in NYC.
• Separate fund of $42 million for commercial producers provides same 10% credit without soundstage qualification.
Connecticut
Total Return: $6 million
Business Tax Credit:
• 30% for qualified digital media and motion picture production expenses (including pre- and post-) incurred in Connecticut.
• Must exceed $50,000 in spending to qualify. Includes goods, services, and labor.
• Credits are transferable and carry forward for three years.
• No annual or per-production cap.
New Mexico
Total Return: $5 million
Refundable Tax Credit:
• 25% of eligible New Mexico production and postproduction costs including wages.
• Must choose income-tax credit or sales-tax exemption for each expenditure.
• 50% reimbursement of wages for on-the-job training of New Mexico in advance below-the-line crew.
Film Investment Program:
• Interest-free loans/equity investment up to $15 million per project.
Louisiana
Total Return: $5 million
Tax Credit:
• 25% of total production expenditures (including payroll, except portion of any salary over $1 million) for projects spending at least $300,000 in Louisiana.
• Credits are transferable and can be carried forward for 10 years.
Labor Tax Credit:
• Payroll to Louisiana residents receives an additional 10% credit.
Texas
Total Return: $1 million
Motion Image Industry Incentive Program:
• 5% grant of in-state production expenditures, including wages paid to Texans.
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