Lost another movie.. just the beginning thanks to Rick and company

[DetBill]

In Cleveland for the week and they are already boasting on their news and radio broadcasts that they have lured the movie "The Avengers" with Robert Downy Jr from Detroit /Michigan. They are so glad as they "want the jobs and publicity "these ventures bring. They stated that Michigan governor Snyder is in the process of eliminating most film credits so this a great opportunity for Cleveland /Ohio to pick it up. The news commentator stated. "What are they thinking up there?? I heard they were doing a good job with the film industry but we are more than glad to take it over" "We are very glad to show the industry what Cleveland has to offer and a very friendly business climate". Good old Michibama and our backwards ways will get us no where down the road. What a major step backwards for our city and state, just unbelievable. We really need to lobby this before it totally explodes in our faces.

[Det_ard]

I'm glad I checked your profile before commenting because I was going to ask you if you understood how costly the tax credit approach is to the state. Since you're a CPA you probably understand it quite well, which is great because I don't get how giving a 42% refundable tax credit to film makers is a sustainable approach.

[rjk]

I don't know how Ohio is getting over on Michigan since their budget allowed for $30,000,000 [[$10M/$20M) over two years for movie rebates.

If the concept is sound I don't understand why most states have a cap for the amount of money spent on rebates.

Ohio's budget will be realeased soon and we'll see how much money Kasich wants to spend on these movies. Financially speaking they're in worse shape than Michigan.

[1953]

I've been looking at these credits as a public investment in a new industry. If we think of them as such, they won't necessarily pay for themselves today; if they work, however, they will pay for themselves handily in years to come.

We might decide that there is little long term likelihood of attracting the film industry to Michigan on a more permanent basis and its not worth our money. On the other hand, we might decide to tailor our "investment" to an industry that could locate here more easily, like the video game or recording industries.

1953

[detmsp]

I've been looking at these credits as a public investment in a new industry. If we think of them as such, they won't necessarily pay for themselves today; if they work, however, they will pay for themselves handily in years to come.

I don't see this as an investment for years to come... as we have clearly seen, the second you stop throwing money at the industry, it completely disapears. Why aren't we using this money to lure companies to set up something more permanent [[ie, HQ, manufacturing facility, distribution center)?

[iheartthed]

I don't see this as an investment for years to come... as we have clearly seen, the second you stop throwing money at the industry, it completely disapears. Why aren't we using this money to lure companies to set up something more permanent [[ie, HQ, manufacturing facility, distribution center)?

Outside of California, New York, Illinois... and maybe Georgia... there aren't many states that have TV shows from a major network's studio fully produced locally. How many actors and production staff on Detroit 1-8-7 pay Michigan taxes? Heck, would the Chrysler Super Bowl ad have even happened without the film credits???

The tax code probably does need to be addressed, but the method has left a bit to be desired. We're talking about a government here, not a corporation where investors react immediately in both positive and negative ways to quarterly financial reports.

[R8RBOB]

I don't know how Ohio is getting over on Michigan since their budget allowed for $30,000,000 [[$10M/$20M) over two years for movie rebates.

If the concept is sound I don't understand why most states have a cap for the amount of money spent on rebates.

Ohio's budget will be realeased soon and we'll see how much money Kasich wants to spend on these movies. Financially speaking they're in worse shape than Michigan.

You're talking about John Kasich. The same John Kasich that pissed away millions of dollars to build high-speed rail in his state. The same John Kasich is eager to kill worker rights. Kasich is going to more thrifty than Snyder when it come to tax credits for the movie industry. I serious doubt movie makers will be flocking to Cleveland or anywhere else in Ohio anytime soon.

[FlyingJ]

I serious doubt movie makers will be flocking to Cleveland or anywhere else in Ohio anytime soon.

Maybe Marvel[[& some guy named Sam Raimi) were happy with their past experiences shooting there;
http://spiderman3cleveland.blogspot.com/

BTW, one of the shots in this sequence took 2 & a half years of CGI alone, so it's not like anybody made a snap decision about the place

[Mr. Houdini]

Michigan is quickly becoming a bigger laughing stock than it has been for the past four decades or so. Sad.

[SaintMe]

Good old Michibama and our backwards ways will get us no where down the road.

You know that Obama isn't the Governer of Michigan, right?

[adamjab19]

To go along with what detmsp has stated:

I feel these incentives are part of a codependent relationship. Kind of like a girl with a druggie boyfriend. She buys him his drugs and knows it's wrong but says, "but he still loves me...." Sure these incentives bring money and jobs but how real and concrete are they? What is the true longevity of this industry coming to Michigan?

There was an article in the Freep a couple weeks ago when this budget was mentioned. It interviewed people planning on trying to get incentives for movies or shows shot in michigan. I believe there were 4 or 5 potential customers. 3 or 4 of them said, without any apology, they would just find a new spot to shoot if they didn't get the incentive. Just like that they would move on. Not, we would be sorry for the local economy, we would be sorry for the new businesses that were recently set up, or we sure would miss Michigan. Nothing. Just up and gone.

While this may be a decent investment now, and the growth certainly has been exciting, who is to say that in 2-3 years some other desperate state offers 45% break or whatever is higher than Michigan and we see our second industry melt down in less than a quarter of a century?

And honestly if these incentives had not been in acted a couple of years ago would our economy gotten any worse? Has it gotten dramatically better? I'm not sure really, but I am also not sure if we would have ever missed them in the first place. And really has this even been a tremendous boost in our economy overall? All I hear about is projected income still and it's been over 2 years. Sure it's been real for a handful of catering companies, people that have been able to help out on the sets or someone that has rented a condo to a star for a few months but that's all I have seen/heard about. Oh and some film studio who still hasn't gotten their shit together to open yet. Maybe we can woo the film industry from some other slouchy state in a few years when things are rightsized for us.

I would say maybe he could give a little more to the film industry but why? They'll just run away when that little more is gone anyway.

[warsaw7]

You know that Obama isn't the Governer of Michigan, right?

I think he is referring to combing Michigan and Alabama stupid.......

[DetBill]

Yes I am referring to our state combining the attributes of Michigan and Alabama, sadly. I am not the first one to use this adjective lately, as its most appropriate considering the direction we are going on.
Also, to address a earlier question, Yes I am a CPA. a budget specialist for the last 11 years by the way. and any good analysis not only looks at immediate cash flow [[ wish has been good in the the recent year on this btw), but also start up costs needed , projected revenue flows, expansion needs, anticipated return and both postiive and negative scenarios. This venture scores quite well on all of these, Michigan should be proud of its progress in such a short period of time, As for the 42 percent tax credit, thats exactly what it is,, a tax credit which inturn in most scenarios causes more investment. If Governor Snyder is such a good businessman he should know start up capital is always needed as is start up time, We are doing very well, [[ up till now on this front). Diversification is badly needed in Michigan, This is probably the most successful industry we have attracted in such a short period of time that is not directly manufacturing. Earlier one addressed the non measurable element of positive publicity, Lets not even go there,, Its enormous and only a fool would underscore that. There seems to be a common comment from some in the papers and here that we "dont need them hollywood types here" , You are so missing the boat , its not about them, its about expanding our horizons for diversity and using this industry [[ a very popular one at that) to our advantage. We have spent several years building the necessary framework here, most of those individuals have no concept of what has been developed here to this point. To walk away from this development is quite unbelievable.
Furthurmore for the doubters on here that Ohio is doing this , The WKSU/NPR local news broadcast today airing at around 5 pm today in Cleveland is proof postive for the naysayers . Just a lovely segment how the cleveland tourist bureau and film society is ecstatic over inheriting this from Michigan and Detroit, and, how they are getting overwelming support on this from the civic [[Cleveland), County, [[Cuyahoga) and State [[ Ohio and yes a new Republican governor) on this,,and they feel this is just the beginning . Made me quite ill to even listen to this,, Obviously they all see the benefit in a swift second. Cleveland has many similar problems to Detroit as does Ohio to Michigan yet they strongly want to make this work, In short, they get it,,and they will, The have some very intelligent people there,, Many, many in this state dont, and quite frankly won't ever. To make matters worse WKSU reports that the whole percussionist section of the Detroit Symphony is gone now,, and guess who hired a couple of them - the Cleveland Symphony. I d say we need to roll up our sleeves in this town and get involved.

[adamjab19]

Good points Detbill but I guess there is still some shellshock from the last industry that shit the bed here. The movie industry just seems to fickle to try and set up any type of permanent shop here. OK let's say that there is some permanent shops set up here....it gaurantees jobs now but what if Ohio gets a bit slicker and slyer and up the ante on their tax breaks/refunds/incentives whatever? I still think the movie industry would be gone in a second. No solidarity from them.

Furthermore how long can Michigan offer this 40% refund/incentive/break? While the people of this state may start reaping the benefits of a new industry how long until the government starts getting some of THAT money into their pockets?

[Detroitej72]

Someone has to pay for the lost tax revenue from the business [[welfare) tax cuts.

[bartock]

Someone has to pay for the lost tax revenue from the business [[welfare) tax cuts.

Amazing to me that so many of those criticizing the across-the-board business tax cuts are the same ones crying over the loss of film credits.

[detmsp]

Outside of California, New York, Illinois... and maybe Georgia... there aren't many states that have TV shows from a major network's studio fully produced locally. How many actors and production staff on Detroit 1-8-7 pay Michigan taxes? Heck, would the Chrysler Super Bowl ad have even happened without the film credits???

I'm not doubting that all of this spending has created jobs. It just seems that it has created nothing but temporary jobs and as such cannot be viewed as a long term investment. Why not spend tax money on creating more permanent jobs?

Look at what has happened recently... Incentives for movies are in question, and the industry bolts and the jobs are lost. Incentives for brownfield sites and historic buildings are in question and did the book cadillac shut down? Did any of the jobs created by previous brownfield tax credits get lost as a result? No. Those incentives were long term investments, the film credits aren't.

[iheartthed]

I'm not doubting that all of this spending has created jobs. It just seems that it has created nothing but temporary jobs and as such cannot be viewed as a long term investment. Why not spend tax money on creating more permanent jobs?

Look at what has happened recently... Incentives for movies are in question, and the industry bolts and the jobs are lost. Incentives for brownfield sites and historic buildings are in question and did the book cadillac shut down? Did any of the jobs created by previous brownfield tax credits get lost as a result? No. Those incentives were long term investments, the film credits aren't.

The Book Cadillac was rehabbed almost 5 years ago; it's not shutting down. But how many other Book Cadillac type of rehabs will we see in the future?

I think we agree that long term tax credits aren't a good policy. But these aren't meant to be long term... And when you've got an apparent winner why unnecessarily sacrifice it in order to make an ideological point? Why couldn't he just say "we'll offer this much money until we get our tax code straightened then we will renegotiate"? He could justify the temporary favortism by the amount of growth that the industry has shown over the past several years in the state.

How much tourism interest has been generated in Detroit because images of the city are being broadcasted around the globe? How many convention decisions have been tilted in the favor of Detroit after 111 million people saw the city displayed during a 2 minute Super Bowl ad? Again, I'm not saying that the governor is wrong in his ultimate goal, but the execution is a bit left to be desired.

ETA: I'm viewing this from outside the Detroit bubble. I live in New York. I notice when I see Detroit in media, and I'm seeing it a LOT. The people that I work with and socialize with who know I'm from Detroit always mention it when they see the city depicted somewhere. It's usually "wow, I didn't know Detroit had that" or "Detroit looks nice", "Detroit's a real city", etc. That kind of exposure is invaluable. The film industry is just another competitive advantage that Detroit and Michigan has right now that it could use to turn itself around. Chicago would never fumble away an advantage like that. And it's well documented that migration patterns, especially foreign immigration, tend to favor locations where immigrants are most familiar. And immigrants become most familiar with American cities through the media. Just sayin'...

[adamjab19]

I think we agree that long term tax credits aren't a good policy. But these aren't meant to be long term... And when you've got an apparent winner why unnecessarily sacrifice it in order to make an ideological point?

That's the point. If the tax incentives are not permanent what will make the industry permanent when the money is gone? Hollywood will not pay more to make shitty movies just because there is a local economy attached to it.

[iheartthed]

That's the point. If the tax incentives are not permanent what will make the industry permanent when the money is gone? Hollywood will not pay more to make shitty movies just because there is a local economy attached to it.

If you offer them the incentives and then work on bringing your corporate tax code into reality then the industry will feel more comfortable about setting permanent roots. Building studios, producing more TV shows locally... Hell, maybe even the next Oprah could be launched from a studio in Detroit.

[canuck]

If you offer them the incentives and then work on bringing your corporate tax code into reality then the industry will feel more comfortable about setting permanent roots. Building studios, producing more TV shows locally... Hell, maybe even the next Oprah could be launched from a studio in Detroit.

That is exactly the way to look at it. There are already big players who invest in studio spaces and
other infrastructure in metro Detroit. But the for Hollywood by Hollywood scenario isnt the end of story. There are plenty of capable would-be producers who can develop projects in the local economy. The difficult thing is to crack the distribution/financing of film. Tom Rosenberg who produced a couple of pictures in Montreal whose company is Lakeshore Entertainment had to run the company out of Los Angeles in spite of his obvious attachment to his native Chicago. Oprah Winfrey is definitely a great example of what can happen outside L.A. and New York. I think it's important to develop a robust industry from Hollywood product and alongside it, local producers would use the infrastructure and knowledge to initiate their own stuff. Whta happens is if you develop local technicians to a level where they manage as well as in other markets and let productions go, another cluster of know-how will migrate to where the action is. It is good for Detroit to regain the advantage it once had as a film center as a poster said once on another thread. When corporate films and advertisements were made in the area, that certainly was a strong presence in the economy.

http://www.raleighstudios.com/index.php?

option=com_content&view=article&id=7&Itemid=8http://www.cinepropictures.com/

[rb336]

I'm not doubting that all of this spending has created jobs. It just seems that it has created nothing but temporary jobs and as such cannot be viewed as a long term investment. Why not spend tax money on creating more permanent jobs?.

Look at that studio in Pontiac. that would have been permanent jobs. Surprised Snyder's bud Rakolta hasn't pitched a fit.

Ernst & Young, an independent, right-leaning firm [[based on political contributions) says for every buck we've invests through the tax credits, six have come back. 600% seems good to me

[detmsp]

Look at that studio in Pontiac. that would have been permanent jobs. Surprised Snyder's bud Rakolta hasn't pitched a fit.

Ernst & Young, an independent, right-leaning firm [[based on political contributions) says for every buck we've invests through the tax credits, six have come back. 600% seems good to me

What part of this are you missing? The incentives are gone and the work at a studio like this disappears. How is that permanent? These jobs only exist for as long as the state is paying 40% of the salaries!

[canuck]

What part of this are you missing? The incentives are gone and the work at a studio like this disappears. How is that permanent? These jobs only exist for as long as the state is paying 40% of the salaries!

What makes you think other industries are permanent fixtures, havent you noticed the disappearance of mainline industries in Michigan in the past little while? The film business is fickle and it creates millionaires on a whim. That is for sure. I work in film in Canada and can tell you that the rehabs of old office buildings into hotels or the brand new luxury hotels were helped along by a robust film industry in the nineties and early 2000's. Restaurants and Casinos benefit from it and there is a definite vibe when film happens in your city. The labor intensiveness is a plus for Michigan. Film Studios are worth building because the cost of leasing on a weekly basis is astronomical but worthwhile for film productions. So when a large studio half to a million sq ft is built and leased for a number of films during the first three years, the investment is already pretty much covered. So the tax return has to do with recouping top heavy costs by production companies. This is called below-the-line costs. The "talent" or "A-list actors" are considered above-the-line costs. So there are two things to ponder in the cost of a medium to big budget movie. That is why the labor intensive film industry can also benefit Michigan by generating local productions due to increased expertise and available infrastructure and rental equipment. Film schools gain more instructors, post-production companies develop from better budgets, and actors, scriptwriters who otherwise would move to one of the coasts can live and contribute to Michigan. California gives incentives too, dont kid yourself.

[Pam]

http://michiganfilmreel.com/2011/03/...d-for-lansing/

A rally is being organized for support of the film industry at the Capitol Building in Lansing on March 22, 2011.
The “6 for 1″ title comes from the recent study by the nationally regarded accounting firm Ernst & Young. For every dollar the state invests in the film industry, about $6 in economic activity results: people are hired, businesses are paid for goods and services, and people find a reason to live in Michigan! Details for the Lansing rally will be released as they are available