Candidates promise more biz, but can city offer incentives?
Candidates for Los Angeles mayor are luring stars and moguls for money, but seeking the votes of the Hollywood rank-and-file with the promise to lure more production back to the city.
But even as the contenders talk up the issue of runaway production, there are doubts about just how much can be done at the city level to keep a movie or TV show in L.A.
Councilman Eric Garcetti is proposing a “film czar” to guide producers through red tape as well as a plan to waive city fees for TV pilots that shoot in the city. City controller Wendy Greuel is calling for further streamlining the permit process and pointing to her work on the California Film Commission. Radio talk host and entertainment lawyer Kevin James is promoting a “Los Angeles Production benefit,” in which indpendent film producers can access a city database of crew members who are available to work at an “adjusted rate.” Councilwoman Jan Perry has proposed ongoing surveying of other cities, like New York and New Orleans, as a kind of barometer to see what they are doing to lure production away.
Yet while producers welcome any effort to streamline the process — on the idea that time is money — some question whether it actually is the breaking point in whether a production stays in the city. “The city isn’t in a position where it could offer major incentives that would make a major difference in the cost of production,” said Kevin Klowden, managing economist and director of the California Center at the Milken Institute. He doesn’t dismiss what the city can do at the bureaucratic level, like offering police and fire services at discounted rates on business taxes and fees, and doing what it can to speed the permit process through FilmLA. But they do not create as much of a lure as state incentives, and the real issues in the state incentives are that we don’t offer enough of them,” he said.
There’s also the more vexing problems of labor costs and neighborhood cooperation, he noted.
“In the end, a lot of [bureaucreatic efforts] has been tried, and it it may help, but he longterm reputation for the city comes down to how quickly can things get done,” he said.
The candidates have made a point of supporting and expanding the state’s production incentive, recently extended for another two years yet capped at an annual $100 million, a sum that is quickly snapped up.
While runaway production may not be foremost on the minds of many donors, even within entertainment, it has popped up in mayoral debates, like a forum sponsored by KABC-TV and the Pat Brown Institute of Public Affairs on Monday. Producers of lower-budgeted productions and TV movies are especially vocal about the cost of permits and of paying for city police and fire personnel to supervise on set. “It is a lot of money for a small project,” said producer Michael McGuire, who pointed to an $800 permit he recently paid to shoot an independent film not on public property, but at a private home in Encino. “I don’t see why they can’t waive that.”
The issue took on renewed importance last year, when FilmLA reported that less than half of primetime dramas were being shot in Los Angeles, while drama pilot production fell. Overall, Film LA reported that pilots show in Los Angeles amounted to just 29% of the total, far and away the most being comedies that are don’t carry the same economic punch as one-hour shows.
On Feb. 26, the City Council will weigh Garcetti’s proposal to waive fees for TV productions filmed in the city, as well as fees for the first year of a pilot that is picked up for series. In a report last month, City Administrative Officer Miguel Santana estimated that the impact on the city’s general fund would be a mimimum of $231,000 and an unknown larger amount for the first year of production. He added that the waiver of fees would conflict with a city policy requiring “full cost recovery” for all fees charged by the city.
“Given the nominal amount city fees represent of overall production costs, it is unlikely that this waiver in and of itself would be the determining factor for filming on location in the city versus another location,” he wrote.
Rather, he said that the central issues that pilot producers use in choosing where to film are the availabiity of incentives and production infrastructure.
Garcetti, however, told KNBC last year that “if we can spend a little money waiving those fees and making Los Angeles the most film friendly and cheapest place to film a pilot, then we think that we’ll have a good chance of taking those middle class jobs that are part of Hollywood and keeping them here.”
He also is calling for Sacramento to lift the $100-million-per-year that is given to production credits, and to expand the categories of productions that are eligible.
Greuel, meanwhile, is promoting her position as a member of the film commission and its role in securing the state’s production tax incentives, which were launched in 2009 even as the state was in a budget crisis. She also pledges to further streamline the permit process, which is handled for the city and the county by FilmLA, and for more reductions in business taxes. Since 2004, the city has reduced rates for entertainment productions, and established a tax exemption for the first $300,000 earned by creative talent in the industry. She and Garcetti, then council president, pushed for the measures, along with a 15% reduction in the business tax.
James, meanwhile, held a press conference in January to announce his endorsement from the Bring Hollywood Home Foundation, a group promoting measures to solve runaway production. He has said that his proposal also would match unused studio production space with independent productions, at a discounted rate but with an option for first-right-of-refusal on a film’s distribution rights. Although his proposals may meet skepticism from unions, who say they already provide low-budget contracts, James said that the model for his proposal was the way that “The Bronx Bull” amassed a crew and shot on the Universal lot.
Perry also believes that state production tax credits should be extended “as long as possible,” and that the frame for the benefit should be made to account for the several years it often takes a movie to go from inception to production.
She also talks of an “evolving need to compete” with other cities, and said that she would work with international consulates to promote Los Angeles’ creative community.
“This is our industry,” Perry says, adding, “We cannot afford to lose it and watch it slip away.”