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This story first appeared in the March 20 issue of The Hollywood Reporter magazine.
When Warner Bros.’ family flick Dolphin Tale came out in 2011, it grossed more than $96 million worldwide and bolstered tourism in Florida by more than $2 billion, much of that grand sum benefiting an economically depressed area around Clearwater. The boost was seen most dramatically at the Clearwater Marine Aquarium, where the film’s real-life story of a rescued dolphin took place. Attendance rose from 76,000 visitors the year before the movie to more than 750,000 the following year, says David Yates, director of the aquarium and an executive producer on the film.
When Yates and other producers set out to do a sequel in 2013, they expected to get state tax incentives. Unfortunately, Florida had run out of new funding for its program. The $296 million allocated in 2010, expected to last through 2016, had been expended or promised in three years, and efforts to add funding had failed to pass for two consecutive legislative sessions.
What has happened in Florida speaks volumes about how the competition for Hollywood dollars outside of Los Angeles has escalated to often crippling levels in some states. There was a time, back in the 1970s and 1980s, when Florida was “Hollywood East” — even without subsidies — and jockeyed with New York state for the second busiest film and TV shooting schedule outside California. And why not? Florida offers year-round sunshine, diverse locations and an infrastructure that boasts 100,000 skilled entertainment workers.
But by the early 2000s, nearly 40 states and many countries were offering incentives to attract productions. As Florida’s funding ran dry, so did the production pipeline. Dolphin Tale 2 got made only after the state passed a bill outside the incentive program allocating $5 million to the movie. Some anticipated projects dropped out, and Dolphin Tale 2 was able to tap an additional $5.5 million of incentive funding. But that was the end of line, it seems.
“I hear it every day: Producers want to come here, but they’re forced to take projects to other states and, at times, rewrite them to fit those locations because of the dollar-to-dollar values,” says Michelle Hillery, president of Film Florida and deputy film commissioner in Palm Beach County. So much so that Edward Stamm, a vice president at ARRI Rentals (which leases cameras and equipment) tried to get Florida politicians to pay attention as he saw ARRI’s business in Miami dropping. Late last year, Stamm’s bosses in New York relocated him from Miami to Atlanta, now one of Florida’s main competitors.
Stamm spoke to film commissioners and state legislators about the problem and heard about return-on-investment concerns and competing industry demands, but he is convinced there is another factor: disgust over an earlier failure.
In 2009, the state awarded $20 million to Digital Domain, with two Florida municipalities putting up another $62 million to bring a major postproduction facility to Palm Beach. Some of those dollars went to create the Digital Domain Institute to train workers, but when the company went bankrupt in 2012, Florida’s investment was lost and the training school shut down. “That’s also when [the state] stopped financing the incentives,” says Stamm.
John Lux, COO of Ideas, a design company in Orlando that has been a subcontractor on Dolphin Tale, USA Network’s Graceland and other productions, says that between 2010 and 2013, his company worked on more than 20 projects that received incentives. “In the last 18 months, since tax credits have not been available, we’ve worked on just three projects,” says Lux. He hopes a new bill in the state legislature providing about $42 million annually for five years can turn things around. “If it doesn’t pass,” says Lux, “it will be catastrophic.”
Florida Sen. Nancy Detert, a key legislator behind the latest effort, says too many of her fellow “citizen legislators” still think it is “some kind of tax giveaway.” She hopes to have a bill to Gov. Rick Scott in time for funding to kick in July 1. “It’s absolutely crucial,” says Detert. “Hollywood is seen as a ‘glamorous’ industry, which masks the fact that production is a great business with good-paying jobs. A lot of Floridians have been forced to work in Georgia. They’re sick of going back and forth.”
More than this, the flight of entertainment workers is an economic threat with long-term implications. “A lot of people in the business have drawn a line in the sand,” Lux says. “If we don’t get money this year, many will need to put their houses up for sale.”
On March 11, Lux, Hillery and others plan to rally production and tourism backers in Tallahassee before legislators. “We have to get this thing replenished this year,” warns Hillery, “or we lose the core of our infrastructure.”
CORRECTION 3/12 10 a.m. – John Lux is COO of IDEAS. His title was incorrectly stated as CEO in an earlier version.
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