When it comes to justifying to taxpayers why their money is helping to subsidize local film production, it helps to have an Oscar winner you can point to.
In New Mexico’s case, 2007 was an especially good year. The state can claim partial responsibility for 14 Oscar nominations, including best picture honoree “No Country for Old Men” (with “3:10 to Yuma,” “In the Valley of Elah” and “Transformers” rounding out the ballot).
For Gov. Bill Richardson, that kind of performance is a point of pride, not because he likes winning (he does), but for the simple fact that it indicates progress.
“New Mexico used to be very prominent when it came to filmmaking, and then for the last 20 years, we fell asleep,” Richardson says, sitting comfortably in his Albuquerque office (his real base of operations is 45 minutes north in Santa Fe). “We started out slow, but now it’s reached the point where we’ve made about $1.8 billion in state revenues.”
Richardson’s office just announced the 100th film to collect on its 25% rebate (“Run for Her Life”). Twenty-two of those pics further benefited from the state’s no-interest production loan. And though other states have stepped in with more aggressive programs (most recently Connecticut, New York and Michigan, whose tax credits range from 30% to 42%), Richardson isn’t fazed by the competition.
New Mexico was first, and the state’s plan was engineered to create a long-term, sustainable industry, with extra incentives for productions that advance local talent. As a direct result, an entire infrastructure has sprung up where only a loosely organized wisp of film professionals existed before, many of them refugees from Hollywood who’d taken to the more relaxed New Mexico way of life. Today, the state boasts more than 1,800 professionals and the largest crew base outside Los Angeles and New York, a community deep enough to support at least six productions.
“Legion” co-producer Steve Beswick, shooting at the College of Santa Fe’s Garson Studios, estimates 95% of his 160-person crew are locals, most of them already quite polished: “A lot of the crew has worked on big movies with big heads of department — big production designers, big d.p.s — and they’ve learned a lot from them. The construction crews here are as good as I’ve seen around the world.”
Another plus: New Mexico’s scenic landscapes can be ideal for productions in search of dramatic vistas. For instance, the Jim Sheridan-directed “Brothers” alternates between domestic scenes and war-torn Afghanistan. But they can prove frustrating for pics that require more than mountains, deserts and pueblo-style architecture.
Still, even those options are rapidly evolving. In the last year alone, the eight-stage Albuquerque Studios facility went from non-existent to completely booked — and just in time. A competing eco-friendly studio has cleared the governmental hurdles to build six more stages outside Santa Fe, backed in part by a potential $10 million investment from the state.
At a time when the national economy is in question, New Mexico is the rare state whose finances are in the black. But rather than sit back and rely on the region’s natural resources (one of which is clocking upward of four bucks a gallon at the pump these days), Richardson has looked to lure new ventures.
And though it may be true the governor made courting Hollywood business a priority from his first week in office, the groundwork was actually put in place by his predecessor, Republican Gary Johnson — a detail that makes his party-jumping support of the plan all the more exceptional.
“I’m an unusual kind of Democrat,” Richardson admits. “I am for tax incentives and tax cuts, and I did this not just for film, but we did it with renewable energy, we did it with manufacturing. That’s why we’re getting all these companies moving in here.”
New Mexico won Tesla Motors away from California (“Your governor’s a little mad at us,” he jokes) and attracted Virgin’s Richard Branson to set up his galactic tourism operations at a new spaceport planned near Truth or Consequences, N.M.
Richardson’s film initiative has been so successful that a number of other states jumped on the bandwagon. IATSE Local 480 business agent Jon Hendry, who helped draft the legislation that defined New Mexico’s plan, is no longer surprised when he recognizes his unique phrasing repeated in other states’ books.
“I write as a Scottish lawyer,” Hendry says. “So I laugh when I see some of my language in their plans. Some bill drafter up in Michigan just took our law and copied it. Arizona, too — they admit this.”
Competing state incentives are a boon for many cost-conscious independent producers, who chase such deals to maximize their investments. “Legion” producer David Lancaster wrapped “Middle of Nowhere” in Louisiana before coming to New Mexico and is now eyeing Michigan or Vancouver for his next project.
The Judd Apatow-produced Old Testament-era comedy “Year One” shot 10 weeks in Louisiana and three in New Mexico. “Incidentally, we chose our New Mexico stuff more for landscape than tax incentive,” says producer Clayton Townsend. “We were trying to capture what would be the ancient Middle East in the time of the Bible.”
Louisiana offered a sweeter deal, extending its 25% transferable tax credit even to salaries for out-of-state talent, with an extra 10% awarded if local labor is used. The disadvantage of such a system: To collect, producers must find brokers to buy their shares at a fraction of their value. In Connecticut’s case, productions must identify a qualifying subchapter S corporation that will receive the credits up front — not a task for the casual filmmaker.
“We have a 25% rebate, but it’s direct cash to the crew,” explains Eric Witt, head of Richardson’s media arts development initiative. “Productions prefer that, because we literally write you a check.”
Rather than adjusting incentives to stay ahead of competing states, Richardson and his advisers adopt the philosophy that there’s enough work to go around, relying on New Mexico’s strong infrastructure and striking locations to attract such major productions as the “Indiana Jones,” “Terminator” and “Transformers” sequels.
It’s only natural that some films will get away, such as Disney’s Albuquerque-set, Salt Lake City-shot “High School Musical” franchise. By not stressing such cases, the state film office is free to shift its attention to wooing overseas productions. Earlier this month, Richardson and Witt traveled to Spain and France to court companies eager to take advantage of the weak dollar. Others, including a Bollywood musical that approached Hendry about shooting in the state, are proactively reaching out to New Mexico.
If anyone is missing out in the equation, it would be Hollywood itself, where lobbyists have been stonewalled trying to convince the California Legislature to adopt an incentive program.
Vince Gilligan, creator of AMC’s “Breaking Bad,” wrote the pilot, about a high school chemistry teacher-turned-crystal meth cook, to take place in California’s Inland Empire. At Sony’s suggestion, he relocated the show to Albuquerque to take advantage of the state rebate.
According to Gilligan, the shift brought out an interesting new aspect of the show, which focuses on how science can be used for both good and evil: “New Mexico is a state in which there is a higher per capita number of Ph.D.s than any other state in the union. There’s the Los Alamos laboratory where the atomic bomb was invented, and there’s the Sandia National Laboratory in Albuquerque.”
Albuquerque was actually the original home of Microsoft back in the ’70s, and Richardson hopes to boost the state’s standing as a tech hub with his supercomputer initiative. The plan will yield the world’s fastest nonclassified computer, to be housed at the Intel fabrication plant in Rio Rancho with portals at all the major research universities and other designated centers throughout the state.
That could go a long way toward addressing a frequent criticism: that the state offers limited post-production resources. In most cases, footage must be sent back to Los Angeles to be processed, edited and mixed (to maximize the rebate, “Legion” cut in office spaces adjoining the Garson Studios sets). With bandwidth intended for commercial use, the supercomputer could potentially support visual effects or animation processing.
Rendering power can be a precious resource for companies such as Sony Imageworks, whose New Mexico mirror site is temporarily housed in Albuquerque’s downtown Qwest building. To address the issue, Santa Fe Studios hopes to provide an access hub (as well as potential scoring and post-production space) when the facility opens in late 2009.