Don’t complain about the recession to Wally Schlotter.

San Diego’s film commissioner reports that despite the downturn–the sour economy and the fiscal crisis afflicting state and local governments–his Southern California community experienced its strongest year ever as a production center in 1992.

Twenty-five million dollars flowed into San Diego County from production companies shooting feature films, TV series, telefilms and commercials–more than twice the $ 11 million level of 1991, according to his research.

What he described as “an explosion,” has occurred, in part, because of the San Diego Film Commission’s efforts to make the community more attractive to filmmakers. That involves not charging filming fees when special services aren’t required and routinely holding round tables between film commission officials and producers to iron out potential problems or determine special needs.

Schlotter thinks the economic slide may have actually helped San Diego. “Before (the recession) when a producer wanted to go to Sri Lanka, they went to Sri Lanka,” says Schlotter. “Now, they have to be more careful about the way they spend their dollars.”

At present, there are two TV series based in San Diego, CBS/USA Network’s late-night “Silk Stalkings” and “Renegade,” a syndicated series about a motorcycle riding bounty hunter from Stu Segall Prods.

It’s also attracted six TV movies and four feature films in the last 12 months.

Schlotter heads one of the several film commissions in the six-county southern California region that are fighting hard. Their goalis to keep all production–100%–inside the local area.

But while these commissions are demonstrating a new, more aggressive spirit, harsh reality is making their challenge difficult. California, the state that once considered itself recession-proof, is facing trouble.

The Office of Legislative Analyst, in Sacramento, a nonpartisan advisory, projects an $ 8.8 billion budgetary shortfall in 1993-94. Despite an anticipated economic recovery, some state economists believe there will be a deficit through 1996.

Where does that leave film commissions? Counting their pennies. Even those that don’t receive most of their funding directly from the state are feeling the pinch through the ripple effect that extends to county and city governments.

The tiny Santa Barbara County Film Council saw its modest budget slashed by $ 10,000, about one-third, to around $ 20,000, over the past two years. The $ 372, 000 annual budget of the San Diego Film Commission has been frozen since 1991.

After cutting the California Film Commission’s nine-person staff by two in fiscal 1991-92, the state legislature considered cutting that organization’s $ 860,000 annual budget in half. It didn’t happen, but no one knows if the CFC will escape cuts in the deficit-ridden years ahead.

California, particularly Southern California, and in particular Los Angeles, still receives the preponderance of location filming anywhere. No other region–not in the United States, nor any place in the world–comes close.

The California Film Commission reports that in 1992, 319of the 450 feature films shot in the United States went before the cameras in California. Its closest competitors–New York and Florida–are distant seconds and thirds, with 43 and 16 feature film starts, respectively.

At the same time, the CFC reports California holds at least a 90% share of prime time TV production.

California may still be the U.S.’ undisputed production hub, but local labor leaders continue to rail about production jobs leaving the state. TV movies seem to be leaving California at a faster clip than other sectors of the business–a reflection of new cost-consciousness on the part of TV producers.

A Peat Markwick study commissioned by the California Chamber of Commerce and the California Film Commission in 1987 estimated that California lost $ 2.9 billion annually in production to rival states. Since then, California has stabilized its grip on filming, improvements that CFC attributes to enhanced filming conditions and the impact of the recession.

CFC director Patti Archuletta acknowledged that the harsh economy is a factor: “Studios have never been as bottom-line driven as they are now,” she says.

Others at the CFC talk in a manner reminiscent of Detroit automakers on the subject of Japanese competition. “We must understand that if you take a production to Canada, you are taking food off the table of your compatriots,” says deputy director Melissa Higgins.

There is even talk in California about possibly introducing special financial incentives to producers. CFC’s Archuletta said Governor Pete Wilson has expressed interest in exploring possible incentives, such as a research and development tax credit, a small business tax credit, or sales tax exemption, for example.

But adoption of anything along these lines will only happen if it doesn’t undercut the state. “At a time of budget concerns, we’re trying to find a balance. What can California offer that will not affect the tax base?” says Archuletta.

Producers who take their productions outside California have their reasons. Shoots that go to Canada, for example, do so, primarily because of the savings afforded by the difference in the value of the country’s two currencies, offering U.S. producers an estimated 20% savings. Canadian crews are largely non-union, a further cost-savings.

Stephen J. Cannell Prods. shoots a number of its TV series in Canada, as does ABC Prods. with its “Jack’s Place” series. Spelling Entertainment shot the now-cancelled series for Fox, “The Heights,” in Canada.

Oher factors frequently cited in the reasons behind the so-called “runaway production” trend: Los Angeles’ high labor costs, excessive regulation, costs of police and fire protection, the high price of renting production facilities and the costs of film permits.

Some producers complain that Southern California, particularly Los Angeles, is over-exposed because so many movies and TV series having been shot there. Producers may go to other regions simply to capture a different look, an alternative to the visual landscape of meandering freeways and sienna hillsides made familiar around the world through movies and TV.

Peter Sussman, a partner in Atlantis Films, the operator of Cinevillage Studios in Toronto, said that city is a nice stand-in for New York, for example. It can offer a “calmer, tamer, softer and cleaner” location to harried producers , he said, in addition to the cost-savings from the exchange rate and labor. He also claims Canada has well-trained crews and technicians to meet Hollywood’s needs.

Beth Kennedy, exec director of entertainment industry affairs for the city of Los Angeles, is skeptical about the claims of rivals. The woman better known as the city’s “Film Czar” insists that most of the complaints about Los Angeles as a film location are perceptions, not reality.

The cost of renting location facilities on an average TV movie is estimated at about $ 70,000 in Los Angeles–significantly higher than costs associated with smaller markets, according to some.

“I don’t know if that’s true,” says Kennedy. “Maybe it’s just that Los Angeles people are more sophisticated about what they can get for their facilities (relative to other communities).” And it’s only in Los Angeles that a producer can find all kinds of services, virtually anything needed, to expedite filming, she stressed.

High permit fees? Kennedy contends they’re relatively reasonable given the collection of communities that make up Los Angeles, many of which require their own approvals.

And then there’s the problem of “location burn out”–the attitudes of locals toward filming. With so much filming going on around the city on any given day, many jaded Angelenos find it a nuisance.

Film Commission offices field calls from irate citizens grousing about inconveniences from the presence of production crews, such as blocked driveways and discarded trash.

The California Film Commission and other local film promotion organizations are trying to combat those kinds of problems by convincing production companies to adopt a 13-point, on-location code of conduct.

The CFC believes that if the industry followed those guidelines, it could eliminate such beefs. The CFC’s Code of Professional Responsibility for Filming on Location spells out do’s and dont’s for film crews, such as a pledge not to block driveways, toss trash, be noisy, wear rude T-shirts or bring pets to film locations.

The Walt Disney Co., Paramount Pictures, Warner Bros., Lorimar and Universal Studios have all adopted the code. Kennedy said that 20th Century Fox and New Line Cinema are considering embracing it as well.

Like an old married couple who care for each other but have forgotten how to show it after years of bickering, Kennedy speaks of the need for the entertainment industry and the city to appreciate each other.

“There’s a need to eliminate the arrogance and the indifference each had for the other–the industry’s taken the city for granted and the city’s taken the industry for granted,” she says.

Kennedy has initiated a series ofmonthly meetings between industry leaders and city officials to foster mutual understanding. There are now task forces to study significant location factors, such as fire, building and safety issues and inspections. Also relatively new is a hotline for companies to call if they find themselves embroiled in a conflict with an inspector. A supervisor will resolve the issue, without concerns about retaliation, promised Kennedy.

While Kennedy grapples with the policies and programs that will ease the strains between the entertainment industry and the city in the largest production center, heads of smaller film commissions in the area face lesser, but equally challenging, tasks.

With modest resources, most put their energies into developing production guides and streamlining the film permit process to make their areas more attractive to producers.

New competitors have joined the fray. In June, another southern California film commission came into being in the Inland Empire. San Bernardino/Riverside Film Commmission director Mark Dowling said civic leaders there recognized the region was missing an opportunity. “The area was being overlooked, because there was no one (for producers) to contact,” says Dowling.

It’s impossible to quantify the revenue that didn’t get pumped into the San Bernardino/Riverside economy because of the absence of production. But Dowling noted that when backers of the movie “Bugsy” first scouted locations for that film they considered San Bernardino desert areas for filming.

Ultimately, the producers chose to shoot those desert scenes elsewhere. Dowling estimated that that shoot put some $ 400,000-to-$ 600,000 into some other local economy during its estimated one month of filming.

The Santa Bernardino/Riverside Film Commission’s small $ 50,000 annual budget means the commission must be creative in its marketing programs. Dowling is putting together a production directory, and is considering staging fire safety seminars to educate locals.

Other smaller southern California film commissions are doing their best to keep up levels of service in the face of budget cuts. Sheila Kenny, Santa Barbara Film Commissioner, saw her Commission lose about one third of its funding over the past two years. While Santa Barbara wants the County Film Council to flourish, she said it’s been the loser in competition for funding with the library, police and other services.

The Santa Barbara Film Council has never had sufficient funding to advertise the region, she says. Its most pressing concern, acknowledges Kenny, is “staying alive.”

Likewise, Christie Silverberg, film liaison for Orange County, says the region hasn’t been able to do much in the way of promotion because of lack of funds. She put together a $ 5,000 brochure outlining what Orange County can offer producers.

About two years ago, Orange County implemented new policies to speed up the film permitting process to 72 hours. And there’s a push on now to cut that even further, to 48 hours.

All are hopeful that when the economy improves, they’ll be able to secure more dollars to introduce new programs and services.

“It’s foolish to think you can gain ground by staying the same,” concludes CFC’s Archuletta. “We can’t take this homegrown industry for granted.”

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