Thursday, March 26, 2009

The Film Tax Credits are Building an Industry Infrastructure that will Benefit Wisconsin in the Long Run

We've already talked about how film tax credits have transformed Louisiana in small movie-making haven, but since Wisconsin and Louisiana are two very different places it's a good idea to examine some of the differences. The first, and most important, difference was the 40% entertainment infrastructure tax credit that has since been discontinued.

This was clearly a large influence in getting film-makers to invest in making movies in Louisiana for the long term and seemed to attract quite a few interested parties during the period this tax credit window was open. This is something that's been neglected by the state's credit program, but is slowly developing, almost organically, as a result of more films being shot here in Wisconsin.

This is a pretty typical story in terms of smart business people catering to burgeoning demand:
When independent film production company Lightning Rod Studios needed green screen space to shoot its film Carnivorous a few years ago, it found space at RDImage, whose principals learned of the tax incentives being proposed to draw film industry investment to the state.

Later, after realizing there weren’t any large independent soundstages available in Wisconsin and when it became clear the film incentives would become a reality, the three began investigating what it would it take to open a movie studio on the property.
And they had good reason to believe there would be increased activity in the area -- just check out all of the projects that have expressed interest in coming to Wisconsin.

RDI was even thinking about expanding, but is now pulling back:
RDI Stages built a 5,000-square-foot sound stage in an existing building and bought a 17,000-square-foot facility because of the incentives, Rozina said. The company considered buying a third building but decided against it because of Doyle's actions, she said.
And they're not the only ones:

Video production company Pulse Communications in Green Bay started Pulse Studios in June. Studio President Jay Schillinger had planned to build a $60 million, seven-building production studio in Green Bay or Milwaukee, employing 500 people.

[...]

Schillinger would still do the expansion if the tax incentives are repealed, but at a slower pace.

RDI Stages cost $6 million dollars to build. The more we've been looking into the numbers that have been thrown around the tax credits the more we've more we understand the figures are exclusively production-related. A $6 million investment in the state's film infrastructure does not get counted in the figures put out by the Commerce Department because the studio wasn't producing anything last year -- even though they made an enormous economic contribution to the area in terms of construction jobs.

Now once movies start getting filmed at RDI the proprietors will start to see some of the tax credits coming back to them. Production companies will rent the space out and use RDI equipment and 25% of RDI's bill will (hopefully) be paid off with tax credits. That wasn't possible last year because RDI did not exist yet. Now that it does, it allows more money from out-of-state films to be spent in state and, just as importantly, it keeps Wisconsin film money in Wisconsin since homegrown filmmakers no longer need to hightail it elsewhere to for studio space. Furthermore, it serves as a lure for films who now can shoot indoors or outdoors in the area. If RDI is successful more studios will spring up to serve the demand or compete for business. This isn't complicated financial witchcraft here, just economics and customer service 101.

This has all happened without any infrastructure incentives, which shows that the productions credits have had a good deal of success in quickly developing the kinds of hardware, facilities and personnel that make a film industry possible. RDI didn't even need a 40% tax credit incentive to invest $6 million into the state's film industry -- they just want business. That should be a testament to just how badly film-makers want to do business here in Wisconsin.

Right now the film tax credits are bringing interested parties to Wisconsin and those films aren't just leaving with the state's tax credits, but they are leaving an infrastructure in their wake that makes the state more attractive to prospective film makers. These early films are developing a kind of institutional memory and technical expertise within the state that will make it more appealing to outsiders while enhancing the product of homegrown movies at the same time.

Wisconsin just can't get by on it's good looks alone and expect Hollywood directors to flock to her. This state's got a lot going for it scenery wise, but someone could just as easily shoot in Minnesota or Michigan if they wanted. What has to set Wisconsin apart is talent, it's ability to make movies -- and the more projects come here, the better the state gets at it.

1 comment:

Gwen Ann Wilson said...

This news is so alarming. Thanks for sharing anyway :) Please keep it up.
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