When it comes to the movie business, the state of New Mexico is trying hard to live up to its “Land of Enchantment” motto.
Its 15% tax incentive rebate program for production costs helped land the lion’s share of location work on the Paramount/Sony remake of “The Longest Yard.”
And now the state is about to find out whether its 3-year-old strategy of becoming a direct investor in films will pay off.
When Paramount opens “Suspect Zero” on Aug. 27, New Mexico could see profits in its coffers if the film is a hit. After break-even, or $50 million in worldwide box office, the state receives 2.5% of “Suspect Zero” box office revenues. The figure kicks up to 3% if domestic B.O. tops $90 million.
That’s a big if, but the plan is a bold one. New Mexico officials believe it’s the only such program in the U.S.
The pic, which stars Aaron Eckhart and Carrie-Anne Moss, was the state’s first venture into film investing. It invested with Intermedia and Cruise/Wagner in “Suspect Zero” in 2001, providing a $7.5 million interest-free loan toward the pic’s $27 million budget.
It followed with a $4.7 million guaranteed interest-free loan on NuImage’s “Blind Horizon,” a thriller toplined by Val Kilmer, in which the state has 5% profit participation. Borrowers can use the loans for films shot in the state, provided that the crew is comprised of at least 50% New Mexicans.
Greg Kulka, director of alternative investments for New Mexico, says the program has loaned out about $40 million so far and has helped give the state a base of three complete fully trained film crews.
“We see that as key to giving producers a comfort level about coming here,” he says.
Even more intriguing may be the fact that New Mexico still has another $50 million to loan out in hopes of striking box office gold.