Michigan losing millions in film business money

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DETROIT – The remake of the 1976 movie Sparkle is being shot in Detroit this week, and a call went out to local actors looking for extras. The problem is, there might not be too many more major films being shot in the Motor City or anywhere else in Michigan for a while.

In February, newly elected Gov. Rick Snyder announced that apart of the sweeping budget cuts he was implementing he would eliminate business credits awarded for films shot in the state of Michigan. The $25 million that was set aside would be moved to the 21st Century Jobs Fund, thus capping the incentive.

“Gov. Snyder should have left it alone and taken a wait-and-see attitude toward it,” said Charmaine Green, an independent filmmaker from Muskegon Heights. “It typically takes a few years for a new industry to become self-sustaining. Having the business background that (Snyder) has, he knows this.”

The state first adopted the incentives in April 2008 under an initiative by former Gov. Jennifer Granholm. The Michigan film production tax credit provided a refundable tax credit equal to 30 to 42 percent of qualifying production expenses incurred during any phase of production for films and television series produced in the state.

“For every tax dollar that was spent to provide the 42-percent tax incentive to Hollywood filmmakers and producers, six dollars came back in return,” said Green, who is also a Muskegon Heights city councilwoman. “I see that New Orleans and Atlanta are reaping the benefits of film production because they have similar incentives. The jobs are headed South now in regards to films.”

It isn’t just the south that is benefiting from Michigan’s decision to drop the incentive. Ohio and Illinois have seen an increase in films being shot while Michigan has already lost out.
The movies that were in production at the time the cap was placed were able to finish production. Last year, according to the Michigan Film Office, 50 TV and movie productions were completed in Michigan.

The upcoming George Clooney film The Ides of March, was shot at the University of Michigan campus in Ann Arbor. The recently released Hugh Jackman film, Real Steel, was filmed in parts of Detroit, Grand Rapids, and Jackson, and was the most expensive film shot in the state since the advent of the incentives at a reported $80 million.

Parts of all three Transformers movies were also shot in downtown Detroit. The comedy film 30 Minutes or Less and the action film Setup — starring 50 Cent and Bruce Willis — were both filmed in Grand Rapids.“The film credit was extremely important,” said Jessica Gilmore, a production assistant and independent filmmaker from Detroit. “Some people have said that it wouldn’t have helped the people who work in Michigan’s film industry, but even if it didn’t, it definitely would have brought money to the businesses in our state. It also would have facilitated our growth as a film industry.”

Shortly after the cap went into effect, numerous pending projects bailed on Michigan. The superhero blockbuster, The Avengers, was set to film in Detroit but quickly backed out and chose to film in Ohio instead. Earlier this week, Iron Man 3 pulled out of Michigan, opting to film in North Carolina instead.

The MFO offered $20 million to Marvel, matching North Carolina’s offer. But, according to State Sen. Randy Richardville, Marvel chose North Carolina because it guaranteed the money, while Michigan’s deal was contingent on legislative approval.

Richardville, a Republican from Monroe, said that Iron Man 3 could have generated as much as $60 million in direct spending in the state. In July, Snyder signed legislation to allow more flexibility and smaller credits within the incentive program.

“It has a bad effect on the economy in regards to jobs lost, creative talent leaving the state and entrepreneurism which is the starting point of great ideas that ultimately bring about business and creates jobs,” Green said.

The new law gives the MFO the ability to negotiate the size of the credits it offers to movie, television and video game producers under the cap. However, the state has only $1.4 million left to award by 5:00 p.m. today, which the end of the fiscal year.

So while movies such as Sparkle will continue to shoot in Detroit, the state of Michigan stands to lose out on millions in revenue. It’s a tough pill to swallow for many filmmakers and actors who were looking to get a start.

“People are still making independent, small films, but those are more passion projects,” said Gilmore, who recently graduated from Wayne State University with a degree in film. “I understand where (Snyder’s) coming from, however, he should listen to the people of Michigan.
“I think Michigan is a beautiful place to shoot. There are so many areas here and there is also a lot of potential.”