Mexico tries to grab runaway production dollars from Canada

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Mexico offers tax breaks, rebates in attempt to grab runaway production dollars from Canada Mexico struggles to compete with Canada in drawing runaway productions, primarily because Hollywood producers find the filming incentives up north more attractive. Factor in fears of escalating drug-related violence and last year's swine flu outbreak and it has made matters even more difficult in recent years.

In all fairness, though, Mexico provides a much safer work environment than many people might imagine. What's more, a new $20 million tax-incentive program addresses the nation's need to establish itself as a more desirable locations option.

Mexico's export agency ProMexico announced the program in March. It allows for tax rebates of 7.5% on projects that exceed the amount of 70 million pesos ($5.7 million), providing foreign shingles contract local production services. Producers also can write off an additional 10% of money owed on value-added tax.

"The message is that there is a 17.5% rebate for foreign productions," says Manuel Sandoval, ProMexico's head of strategy and innovation.

Presenting the film incentive several months ago at the former Fox facility Baja Studios, Mexico president Felipe Calderon said the program aims to elevate Mexico as "the capital of Latin America cinema." But considering that an average Mexican feature-film budget runs around $2.5 million and the incentive clearly targets large-scale projects, the program is more prone to position Mexico as Latin America's capital of runaway production, if indeed it proves successful.

Carla Reygoza, coordinator of Mexico's film commission, says the program already has generated interest from Hollywood studios Disney and Universal.

"I think we will start to see concrete results once the funding becomes available in June," she says.

Baja Studios, an oceanside facility built for the filming of James Cameron's "Titanic," hopes results come sooner than later, as it was forced to reduce its rates by about 30% because of the economic slowdown. Other water-related shoots hosted at the Baja California studio include "Pearl Harbor" and "Master and Commander: The Far Side of the World." Baja Studios director Luisa Gomez de Silva says Disney was making use of the facility late last year in preparation for "Captain Nemo: 20,000 Leagues Under the Sea," but the project has been put on hold.

On offer at the studio are exterior and interior tanks with a combined volume of more than 20 million gallons. It also provides stages for dry shoots, which have been used to film commercials, music videos and television programs.

Another key production facility looking to benefit from the program is Mexico City's Estudios Churubusco Azteca, one of Latin America's largest film studios. Churubusco has 10 stages ranging in size from 1,200 to 1,800 square yards and also offers a complete package of production and postproduction services. Among the Hollywood projects that have been filmed there are "Man on Fire," "The Air I Breathe" and "Resident Evil 3: Extinction."

Last year stood out as a particularly slow year for Mexico locationswise and the only large production being hosted here currently is Mel Gibson's prison drama "How I Spent My Summer Vacation." Gibson is shooting in the Gulf Coast state of Veracruz, where he also filmed the action/adventure "Apocalypto."

-- Jonathan Hecht
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