Location report: New Mexico

With hefty tax rebates and state-of-the-art facilities, the state is poised to become a leading production center.

New Mexico is getting a new look: The once-sleepy home of hippie artists and everything New Age has reinvented itself as Hollywood Southwest. An aggressive tax rebate, flourishing production infrastructure and 90-minute flight proximity to Los Angeles are among the enticements that have fueled a nearly 40-fold growth in the state's annual production revenue, from $3 million in 2002 to a projected $117 million this year.

New Mexico locations recently have doubled for downtown Dallas (for the 2004 crime-drama movie "Suspect Zero"), a Minnesota coal mine (where Charlize Theron toiled to an Oscar nomination in 2005's "North Country") and a back-alley Mexican bordello town (for Ang Lee's acclaimed 2005 hit feature "Brokeback Mountain"). This year alone, the state has been home to DreamWorks' planned July release "Transformers," directed by Michael Bay; CBS' $27 million miniseries production "Comanche Moon," based on a Larry McMurtry novel and set to air in November; and the Coen brothers' take on Cormac McCarthy's Western novel "No Country for Old Men" for Paramount Vantage, to name but a few.

"We're the end of the Rockies, the end of the Plains, and we have architecture from the 1800s to cutting-edge modern, red rock, white rock, earthships, alpine terrain and six of seven climate zones," says New Mexico Film Office director Lisa Strout, adding that the state can "double for major metropolitan cities and the moon (and is home to) very film-friendly tribal lands."

When executive producer Thom Mount scouted locations for Brad Isaacs' upcoming road-trip movie "A West Texas Children's Story," he, too, landed in New Mexico -- even though none of the film is set there. Mount admits that the 1960s coming-of-age drama initially was set to shoot in Texas, but when a financial-participation element fell through there, he moved the $3.5 million production to New Mexico, largely to capitalize on the state's 25% tax rebate.

"Other states pursued us -- Louisiana and North Carolina pursued us," Mount says. "They have aggressive rebates, too, but New Mexico had exactly the right blend of scenery: It'll double for Texas, Baltimore, Tennessee, Georgia and Oklahoma."

With the "Story" shoot based in Albuquerque, Mount notes that, "so far, New Mexico has been unbelievably film-friendly, and I say this with a certain begrudging admiration because I'm on the film commission in North Carolina. I wish our system in North Carolina was as streamlined and as film-friendly, and I'll be trying to learn lessons in New Mexico and apply them in North Carolina.

"It's wonderful also that there's a depth of crew now in New Mexico, lots of people who have been on five or six shows and want to move up," he adds. "The minute you build that depth in your indigenous work force, then you're golden."

Says Mount of his Universal-based Whitsett Hill shingle, which has a distribution deal with Warner Bros. Pictures, "We know we'll be back for another (project) in the next 12-18 months."

Mount is not alone in his enthusiasm for working in New Mexico, for which the state motto is "Grows as It Goes." Since Gov. Bill Richardson took office in 2003 and made filmmaking a priority, the state has been home to more than 50 film and TV productions.

Tim Allen, Tommy Lee Jones, Jennifer Lopez and Jessica Simpson are recent additions to New Mexico's "working class," and Alan Arkin, Gene Hackman, Val Kilmer, Shirley MacLaine and Julia Roberts are among other luminaries who have made New Mexico home, snapping up adobe ranches. Delirious with the activity, a local paper recently dubbed the state "Tamalewood."

Slated to begin filming next month is James Mangold's high-profile remake of the 1957 Elmore Leonard-penned Western feature "3:10 to Yuma." Headquartered in Santa Fe, the planned 2007 Fox release, starring Russell Crowe and Christian Bale, centers on a small-time rancher who assumes custody of a captured outlaw awaiting a train to Yuma, Ariz., where the outlaw is set to appear in court.

Los Angeles-based attorney and dealmaker extraordinaire Peter Dekom is on retainer with the state and advises those who dole out its production tax rebate, which only recently was upped to 25%.

"For New Mexico, with 2 million (residents), to become competitive with every other state is amazing," Dekom says. "We're like at the top of the food chain."

In addition to tax rebates, New Mexico offers a film-loan investment program by which nearly 20 projects have received as much as $15 million apiece, with participation in lieu of interest.

Like a rising tide lifting all boats, the increase in filming activity has had a significant effect on the state's infrastructure. New Mexico's crew base has swelled from 100 in 2002 to 1,200 at present -- enough to man five full crews split between Albuquerque, a metropolis with 470,000 residents that is only a 11?2-hour flight from Los Angeles, and state capital Santa Fe, an art-and-adobe town of 70,000 located about an hour's drive north. Film permits are free in Albuquerque and cost only $25 a day in Santa Fe, and the process for obtaining police, fire and parking personnel usually is streamlined into a one-stop exercise.

Perhaps best of all for the state's budding production sector, in July came news that a permanent local infrastructure is taking hold as ground broke on Albuquerque Studios, a $74 million, 28-acre Hollywood-style backlot that will include eight soundstages, space for set construction, postproduction suites, offices and retail space. The project is backed by Pacifica Ventures, which owns Culver Studios in Culver City, and its first two soundstages are slated to open in January, with the rest opening by May or June.

"Los Angeles and New York will always be primary centers for film and TV, but Albuquerque can be the third-largest -- it can be very, very significant," Pacifica chairman and chief financial officer Hal Katersky says. "It can be bigger than Vancouver eventually: It's got better weather than Vancouver, it's closer (to Hollywood and New York), and the incentives are as good, if not better."

Albuquerque Studios vp Nick Smerigan is equally confident. "I think it'll (generate) every bit of $400 million-$500 million a year, once it gets rolling," he says. "Once people feel comfortable with the service they're getting, then it will be a destination for film and TV. We'll definitely be competitive with Vancouver from the standpoint of business leaving California and coming into Albuquerque."

Adds producer Christopher Racster, who shot Robert Cary's $1 million independent drama feature "Save Me" in New Mexico this summer: "I could see this becoming a 'little Vancouver' in terms of how much production could end up here. It's amazingly beautiful, and it can be Anywhere, USA."

One of New Mexico's biggest production success stories is its relationship with the indie shingle Lionsgate. In addition to shooting the third season of its ABC Family drama series "Wildfire," for which a New Mexico horse ranch doubles for one in central California, the company recently filmed Greg Coolidge's planned Oct. 6 comedy feature release "Employee of the Month" in New Mexico and is drafting plans for a $15 million soundstage complex in Rio Rancho, north of Albuquerque.

"Wildfire" executive producer Lloyd Segan notes that without tax incentives, his show could not afford to shoot in New Mexico, "no matter how beautiful the backdrop is."

Lionsgate also began shooting last month on Sci Fi Channel's $20 million miniseries production "The Lost Room," set to air in December. "We were able to get a lot of bang for our buck in New Mexico," Lionsgate senior vp television and finance Mark Manuel says. "For $20 million, we could get more than $20 million in value -- in locations, in permits, in availability of fire and police, in availability of the film commission."

Designing such a film-friendly environment is the purview of Eric Witt, Richardson's director of legislative and political affairs and media industries development. Previously vp finance at Dino De Laurentiis Communications, Witt came with a strategy.

"First we wanted midsize indie productions, then larger studio productions, then repeat business -- particularly from the studios -- then TV series that would help us build the crew base, then building out the physical infrastructure," he says. "With the new Albuquerque Studios, postproduction is part of their plan -- editing, scoring, effects, the whole deal."

Filmmaking has not been this good to New Mexico since the state's 1980s-'90s heyday, which began with the 1985 feature "Silverado" -- an oft-repeated story goes that the movie's processing lab complimented cinematographer John Bailey, asking which filters he had used, and drew the response, "None at all; the skies really look like that" -- followed by 1988's "The Milagro Beanfield War," the 1989 miniseries "Lonesome Dove," 1991's "City Slickers" and 1994's "Wyatt Earp." The latter project propelled New Mexico's 1994 film production revenue to $62 million.

This time, the business seems here to stay. "We're committed to having the most aggressive incentive program in the country for the long term, whether it's a combination of tax rebates, 0% production loans, our crews having mentorship support or the use of state lands," Witt says.

Equally crucial is the business savvy of Dekom, who vets every production loan made by the state. "The first thing we look at is: Who is guaranteeing the principal back if it doesn't earn out?" he says. "Is there a bona fide guarantor of the principal?"

New Mexico's production future thus looks solid -- or even sunnier. "We've been growing at an annualized rate of 20%, and we expect that trend to continue," Witt says. "And with the studio facilities coming in, we expect that growth to even increase."