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Snyder capped the total incentive payout for 2011 at $25 million as part of his budget-cutting proposal in February. As of last week, the Michigan Film Office had $15.8 million in film project incentives approved for the year, “with $65 million worth of incentive applications currently pending,” according to Michelle Begnoche, a spokesperson for the Film Office.
“We are continuing to operate within a budget of $25 million for the year,” said Begnoche. However, she said it was premature to conclude that the incentives would run out well before the end of the year.
West Michigan residents who have been involved with the region’s erstwhile movie industry are pessimistic.
The threatened shrinkage of the movie incentives, which was debated in the Legislature last week, now is “directly affecting me. I was all built up for it and now it’s gone,” said David Lowing of Lowing Light & Grip Inc., a Wyoming company in business since 1985 in sales, service and rental of lighting equipment for film and video productions. Among movies Lowing has been involved with is “The Chaos Experiment,” shot in downtown Grand Rapids in 2008 and one of the first local movie productions in response to the incentives.
Last year was a very good year for the movie business in West Michigan, said Lowing.
“We spent almost all the money we took in on additional equipment to serve the business better, which is now just sitting here on a shelf — as we say in the business, growing hair,” said Lowing.
He said five feature films had been planned for shooting in the Grand Rapids area this year. “It would have been a year to actually make money, and now we’re barely holding on,” said Lowing.
Lowing also was critical of proposed changes in the movie incentives law that would result in additional requirements regarding applications for the incentives. “It’s really overkill. We already had a great system of monitoring and auditing, which caught a lot of problems,” he said.
“The way I understand it, a producer has to come in and sit in front of a panel and get drilled on why this project is good for Michigan,” he said.
The proposals for a permanent cap on the total annual incentive payments, which are in the form of refundable tax credits on 40 to 42 percent of production costs, has “scared a number of people off,” according to Hopwood DePree. “They’re not sure if they’ll qualify, or if they even have the time to go through the process of qualifying.”
DePree is a movie producer and co-founder of TicTock Studios in Holland. Two of his latest films are “What’s Wrong with Virginia?” (scheduled for release soon) and “Tug,” released in 2010.
DePree is also a member of the Michigan Film Office Advisory Council, which includes documentary film maker Michael Moore of Traverse City and other people around the state whose business or organizations are involved with movie and television productions.
The Advisory Council sent a letter in May to the governor and Legislature, urging the preservation of “a meaningful film, television and digital media incentive program for the citizens of our state.”
“As a panel of industry experts, we submit to you that the proposed $25 million cap … will eliminate Michigan as a serious competitor in this fast-growing industry,” states the letter. “On the other hand, we believe a competitive, predictable and fiscally stable program will not only generate significant economic impact, it will help fulfill several of the Governor’s stated goals: create jobs; reverse the brain drain; build new infrastructure; and promote tourism.
“In its first three years, we have seen this burgeoning industry help diversify our economy, create thousands of jobs, revitalize Detroit, cast Michigan in a positive light on an international scale and lift our spirits.”
Nyberg worked as unit production manager on “The Chaos Experiment” and later had jobs on “The Gun,” a Curtis Jackson film, and “Touchback,” starring Kurt Russell, which was filmed largely in Coopersville.
Nyberg said a production company had been interested in shooting a film this year in the Coopersville area. The screenplay is actually set in Minnesota but the movie incentives had them interested in Michigan. Nyberg said it appears the movie will be shot in Minnesota after all, due to the potential cap on the Michigan incentives.
“If it stays at $25 million” — the cap proposed by Snyder — “that’s bad enough. Any lower would be just awful,” said Nyberg. “Twenty-five million for the year is pretty bare bones.”
According to the Michigan Film Office annual report for 2010, released March 1, 119 applications for film industry tax credits were received in 2010, and 66 were approved. A total of 58 film and digital media projects were actually shot during the year, resulting in more than $293 million spent in Michigan. Producers of those projects were awarded a total of $115 million in incentives from the state of Michigan.
On May 20, the state Film Office announced that “Freaky Deaky” has been awarded a film incentive of $2.8 million on $6.9 million that will be spent shooting in Michigan. The movie is based on a novel by Detroit native and New York Times bestselling author Elmore Leonard. The announcement states that the 10 projects approved so far for incentives in 2011 “are expected to create 1,121 Michigan hires, with a full-time equivalent of 256 jobs.”
The most expensive film approved for the Michigan incentives so far is “OZ,” which has gone into production at the new Raleigh Studios in Pontiac. It is a Walt Disney production, directed by Michigan native Sam Raimi, which was approved late last year for an incentive totaling $39.9 million based on the $104 million the producers are expected to spend in Michigan.
Raleigh Studios also has received a movie industry infrastructure incentive of $10.7 million from Michigan, equivalent to 25 percent of the investment. In addition, the studio is in a Renaissance Zone, providing an estimated property tax savings of $9.6 million, according to the MEDC announcement May 17.
“It is fitting that ‘OZ’ will shoot at Raleigh Studios Michigan where a former GM facility has been transformed into a symbol of a new industry taking root in the state,” said Carrie Jones, director of the Michigan Film Office.