In an effort to keep low-budget film and TV shoots in Hollywood, the Los Angeles City Council agreed in principle Friday to set up a revolving loan program that would provide gap financing to projects costing $5 million or less.
By an almost-unanimous vote of 14-0 — councilman Nate Holden was absent — the board voted to set up a study group that would explore the idea.
“The departure of movie and television production from Los Angeles has impacted thousands of motion-picture industry workers who have been left out of work,” the council’s motion began. “Favorable exchange rates and a variety of government subsidies have created a compelling financial argument for producers to take their projects to Canada and elsewhere.”
Cody Cluff, president of the Entertainment Industry Development Corp., which helped draw up the new plan, called it a signal to the production community that Los Angeles is committed to keeping the industry where it belongs.
An EIDC study on production flight during the 1997-98 TV season indicated that more than half of the MOWs aired were produced outside the U.S., mostly in Canada.
Conceptually, the proposal would use the city’s favorable credit rating to help secure lower interest rates for small-budget productions based primarily in Los Angeles. Only projects with a distribution contract would be eligible — the contract would be used as collateral — and a completion bond would be required to ensure that the city incurs no financial risk.
Councilman Mike Hernandez, who chairs the City Council’s economic development committee, said the proposal is about jobs.
“As policymakers we can’t sit on our hands while our constituents are losing their jobs,” he said. “When a movie-of-the-week goes to Canada, everyone loses — our crews, vendors — everyone. This industry is worth $30 billion to this region. In economic development terms, in human terms, you can’t ignore what is happening around us. We all have a stake in this industry.”
Participants in the study group will include the city’s chief administrative officer, its legislative analyst and members of the mayor’s and city attorney’s offices. They will report to the council’s Community & Economic Development Committee within 60 days.