Michigan's Goldilocks Approach

2:00 AM PST 10/30/2012 by Matthew Fleischer

The state decided its film incentives, which brought movies like "Sparkle" and "Alex Cross" to its home turf, were too generous. Scaling back, the program looked too stingy. Now it has allocated $50 million, hoping it's got it just right.

The year 2010 was a banner period for Michigan's film production industry, but it also triggered a fierce debate over the value of incentives. Launched by former Democratic Gov. Jennifer Granholm in 2008, Michigan's generous program, offering as much as 42 percent in refundable tax credits on qualified production spending in the state, attracted such projects as DreamWorks' $110 million Real Steel and New Line's comedy A Very Harold & Kumar 3D Christmas. They were among a record 45 productions that flocked to Michigan that year, spending $293 million in the state.

But all that production meant Michigan had to pay out $115 million in refunds to Hollywood. Critics cited one study that found the state was getting back only 17.5 cents in taxes for every dollar it spent on incentives, while supporters brandished another study arguing that every dollar spent on incentives had a multiplier effect, generating $6 in economic activity.

When Republican Gov. Rick Snyder took office in January 2011, he applied the brakes, scaling back rebates from 35 percent to 25 percent while capping the state's entire commitment in its 2012 budget at $25 million.

Michael Moore, a member of the Film Office Advisory Council, said the program had been "decimated," and sensing a lack of political and financial support, Hollywood stayed away. "Weeks before it fell apart, I was involved in three studio movies. Then, suddenly, all three told me they were leaving the state," says location manager David Rumble. As a result, only eight productions have taken advantage of the program this year, with five more scheduled to do so before the end of 2012.

"It wasn't so much the actual incentives -- which we think are quite competitive -- as it was the $25 million cap that scared productions away," says Carrie Jones, outgoing director of the Michigan Film Office, whose two-year tenure just came to an end.

Realizing it was missing out on business -- The Avengers, for example, chose to shoot in Ohio instead of Michigan -- the state reversed course, allocating $50 million for the program in its 2013 budget.

"We knew we had some skin to bring to the table," says Margaret O'Riley, who stepped in as the film office's new director Oct. 29. "Our program's budget has been increased 100 percent from last year. What other state can say that? I think productions would be wise to take Michigan seriously."

Additionally, because producers shied away in 2012, the film program has been left with $8 million in unspent incentives that will be rolled over into next year. "It's really nice, from an incentive perspective, we can continue to roll balances forward," says O'Riley. "Some programs, if you don't use it, it's lost."

There are signs the state's renewed commitment will pay dividends in 2013. Endemol Studios and AMC Studios shot the pilot for Low Winter Sun, a new crime series executive produced by Chris Mundy (Criminal Minds), in Detroit. And Marshall Mathers, better known as Eminem, is producing the low-budget web series Detroit Rubber to run on premium YouTube channel Loud.

The message, says O'Riley, is that "Michigan is open for business."

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ELSEWHERE IN THE WOLVERINE STATE

Oz: The Great and Powerful: Sam Raimi's prequel to The Wizard of Oz filmed at Pontiac's Michigan Motion Picture Studios.

Jimmy Picard: Arnaud Desplechin's psychological drama about a World War II veteran, starring Benicio Del Toro, filmed in Monroe, which doubled for Topeka, Kan.

RoboCop: The remake of the 1987 sci-fi tale, starring Joel Kinnaman and directed by Jose Padilha, shot on locations throughout Detroit.

This Must Be the Place: Paolo Sorrentino's road movie, starring Sean Penn, made stops at Warren and Sterling Heights.

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