Falling Pilot Fees in LA!!! And, Film Tax Credit Boost!

L.A. to drop location fees for pilot shoots, first seasons

City council approves plan sponsored by mayoral candidate Eric Garcetti,

Posted: Tue., Feb. 26, 2013, 4:26pm
Hoping to win back production from cities like New York, the Los Angeles City Council on Tuesday gave the greenlight to a plan to waive fees it charges for TV pilot location shooting, with no charges for the first season of any project that is picked up for series.The plan was sponsored by City Councilman Eric Garcetti, who is engaged in a race for mayor that has seen contenders elevate the problem of runaway production as an urgent issue for the region as other states sweeten incentives to lure shows. Garcetti and other candidates, including City Controller Wendy Greuel and former radio host Kevin James, have been lining up prominent industry supporters and promoting their efforts to boost production jobs in the city.Garcetti and Greuel have been topping most polls, but they don’t have significant policy differences when it comes to runaway production. Instead, after Garcetti’s press conference, which was not arranged by the campaign but part of his council staff, Greuel’s campaign issued a statement that tried to highlight other types of differences, reflecting the increasing acrimony between the two candidates as the March 5 vote approaches.A spokeswoman for Greuel, Shannon Murphy, said that Greuel was “grounded by real world experience working in the industry,” a reference to her tenure as an executive at DreamWorks. Murphy also seemed to make light of Garcetti as a “storyteller-in-chief.””While being a good storyteller can get you roles on after school specials, we need a tough leader to revitalize our economy and bring Hollywood home.”

At a press conference at Sunset Gower Studios, Garcetti said that with the council’s approval of the waiver, producers who shoot pilots in Los Angeles “will not get a bill from the city.”

Garcetti noted that in 2006-07, Los Angeles was the home of 60% of all TV pilot production. That figure had dropped to 29% last year. One of the beneficiaries has been Manhattan, where Mayor Michael Bloomberg has been promoting the city as a production hub, spurred by the state’s incentive programs.

The city of L.A.’s permit fees, designed to pay for the costs of services like staffing on-set police and fire officials, came to a total of $231,000 in 2011-12 for pilot production, according to City Administrative Office Miguel Santana, who said the figures were “infinitesimal” compared overall production costs.

Yet even though there is some doubt as to the impact, Garcetti said that he wants “L.A. to lead the way, but we need Sacramento to step up.” He is calling for the state to lift the $100 million per year cap on production incentives, and to expand the categories eligible to large movies, premium cable projects, commercials, video games and documentaries.

He said that the fees can add up to significant amounts, with the location manager for “The Closer” estimating that fees can get up to $20,000 per episode. Garcetti has appeared in cameos on the show, and his father, former District Attorney Gil Garcetti, is a producer. He added that the cost to the city for waiving the fees is more than made up for by the jobs and economic impact generated by one-hour dramas, which employ more crew members and are more likely to shoot on location than comedies. The fee waiver for the first year of production is intended to ensure that pilots stay in L.A. for series, and not simply set up shop in other states or Canada.

At the press conference, other production personnel talked of problems convincing major feature film producers to shoot on location in the city. Chris Baugh, location manager for “Argo,” said “I am starting to see people who have never made a feature film in Los Angeles. In fact, they are afraid to. They are concerned that it is too expensive and too difficult.” He added, “It may not be long before all executive producers may not have the experience of filming in Los Angeles, and that is a scary thought. We have got to turn this around now before that happens.”

Producers of independent movies also have complained of the high cost of permits issued by FilmL.A., the non-profit entity set up in the 1990s to streamline production permitting in Los Angeles County.

Contact Ted Johnson at ted.johnson@variety.com

‘Breaking Bad’ bill would boost New Mexico film incentive!!!

By Richard Verrier, Los Angeles TimesFebruary 27, 2013, 5:00 a.m.

Supporters have dubbed it the “Breaking Bad” bill.

For five seasons, the AMC TV series has been a hit for the cable network and an economic boon to the state of New Mexico, where the drama starring Bryan Cranston is set and produced.

Now that the series is shooting its final season, however, New Mexico is attempting to beef up its film incentive to attract new dramas to help restore the state’s position as one of the leading destinations for film production outside of California.

PHOTOS: Hollywood Backlot moments

State legislators recently unanimously approved a bill that would boost New Mexico’s TV production refundable tax credit to 30% from 25%. The incentive works like a rebate, giving filmmakers credit toward what they spend on crews and vendors in the state. To qualify, TV productions would have to film at least six episodes in New Mexico and hire local crews.

The credit also allows producers to bring in outside crews so long as they make a good faith effort to hire in state and contribute to local job training programs. Producers of feature films also could get an additional 5% rebate on what they spend to hire local crews.

If the state Senate and New Mexico Gov. Susana Martinez approve the bill, it could be passed as early as the spring, raising the competitive stakes for California, which offers a tax credit of 20% to 25% of qualified spending. The proposed legislation comes at a time when Los Angeles already has seen a sharp falloff in production of one-hour dramas and television pilots because of competition from New York and other states.

The proposed legislation also is intended to put New Mexico in a more competitive position relative to other states, especially Georgia, Louisiana and New York, that already offer a 30% credit.

New Mexico still attracts some big productions — “The Avengers” and “The Lone Ranger” filmed there — because of its proximity to L.A., its local crew base and varied geography. But it’s no longer considered the chief rival to California as it was five years ago, when Gov. Bill Richardson, a Democrat, aggressively courted the film industry with rebates, loans and job training programs. Massive new production facilities sprouted, and several vendors and support companies followed suit.

PHOTOS: Hollywood Backlot – ‘Breaking Bad’

The state’s film business fell off sharply after Martinez, a Republican who vowed to curtail government spending, proposed big cuts in the program in early 2011. Eventually, Martinez backed away from plans to gut the film and TV credit, but the state imposed new restrictions on the incentive, including a $50-million cap on annual tax credits.

Film spending in New Mexico in fiscal 2012 dropped nearly 20% to $225 million compared with fiscal 2011, according to the New Mexico Film Office.

“Any time a state makes public claims they may not support the program, it makes the industry very nervous,” said Joe Chianese, a senior vice president at Entertainment Partners, which advises the industry on film and television tax credits. “These [proposed] changes are very positive and it demonstrates that they are very supportive of the industry.”

Matt Rauchberg, senior vice president of Albuquerque Studios, which emerged from bankruptcy in September 2011, strongly backs the “Breaking Bad” bill.

“The last year was pretty slow,” said Rauchberg, adding that “Breaking Bad” takes up two soundstages while six others are vacant. State lawmakers have a “perfectly clear understanding of the benefits of the film industry and they want to do anything they can to bring it back.”



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