Colorado not high on Hollywood's list

Why can't what happens in Colorado stay in Colorado?

Last year's Jennifer Garner film "Catch and Release" was set in Boulder but shot only 10 days there.

Samuel L. Jackson's "Resurrecting the Champ" was set in Denver, but the production spent a mere two days filming in the state.

And last Christmas, the peaceful town of Gunnison was wiped off the map in the horror flick "Aliens Vs. Predator: Requiem." Though the film's producers went to the trouble to get the names of actual Gunnison businesses and streets, the movie was shot entirely in British Columbia.

More than 400 movies have been shot in Colorado, but nearly as many were set here and shot somewhere else.

It's simply dollars and cents, said Kevin Shand, executive director of the Colorado Film Commission, which promotes filmmaking and works to bring film production to the state. Though the Canadian dollar is now on par with its U.S. counterpart, provinces like British Columbia still offer filmmakers hefty incentives to shoot there. So do such states such as New Mexico, Utah, Wyoming and Montana. Colorado has its own incentive program, but it just doesn't measure up, dollarwise, Shand said.

"We've got pretty much everything a production company needs - we're just not competitive on the business end of it," Shand said. "The movie business is no longer locationdriven, it's incentive-driven."

A bill introduced in the Legislature this year would have made $25 million in transferable tax credits available to filmmakers. Under the proposal, a production spending $100 million in the state would get a 25 percent transferable credit worth $25 million and could then resell the credit to local companies facing hefty tax bills - similar to the state's conservation-easement credits. But the measure failed in the House Finance Committee on a 6-5 vote March 18.

"Potentially, this could be the ruin of the film industry in Colorado," Shand said.

Opponents, including Rep. Kevin Lundberg, R-Berthoud, and Rep. Doug Bruce, R-Colorado Springs, said putting so much money into promoting a single industry is unwise.

The state film commission itself, Shand said, may be out of business by this summer, since it's operating with money from a grant that runs out shortly and the failed bill would also have funded the commission.

There's no chance of another measure this year, he said.

Meanwhile, other states are handing out millions of dollars to bring in the Hollywood gold.

New Mexico's film-incentive program brought that state $142 million in film productions in 2007. That's up from $1.5 million Hollywood took to New Mexico in 2001. Plus, the industry is putting down roots as companies like DreamWorks have opened offices there.

"No Country For Old Men," which won the Oscar for best picture this month, was shot in New Mexico, as were "3:10 to Yuma," "Transformers," "Indiana Jones and the Kingdom of the Crystal Skull," "Wild Hogs," "The Longest Yard," and more.

"They have project after project after project," said Colorado Springs film commissioner Kim Griffis. "It's really hard to compete with that."

Add up the numbers and the New Mexico Film Office says Hollywood was responsible for $475.5 million in economic impact in 2007.

"New Mexico right now is pretty much the big dog," Shand said.

"Incentives" is the top item on the menu at the New Mexico Film Office Web site, and New Mexico offers some of the most lavish available: film production companies get a 25 percent rebate on everything they spend in the state that's taxable - including the taxes themselves. If a company spends $100 million and pays an additional $7 million in taxes, it will get a check for $26.75 million from the state government.

Plus, film companies can get interest-free loans for up to $15 million, in return for the state getting a share of any profits. If that's not enough, films can get a 50 percent rebate for salaries that go to on-the-job training of New Mexicans for advanced crew jobs.

When you add up Hollywood's direct and trickle-down effect on New Mexico's economy, the incentives more than pay for themselves, said Lisa Strout, director of the New Mexico Film Office.

"We feel that it's not just revenue neutral, that it's a positive," she said. "We truly believe that in order to go on for generations, which is the whole point, that you make sure that you're feeding your economy to make it healthy, as opposed to being a drain on it."

New Mexico's program may be the model, but it's not unique, and it's being eclipsed by more generous states. Forty states now offer substantial incentives: Louisiana offers a 25 percent tax credit, Arizona gives tax credits of up to 30 percent and Michigan just passed a 42 percent rebate (a rebate is a direct payment, while tax credits can generally either be used by the company itself or sold to a local company to offset its tax bill).

Those states offer much more than Colorado does.

Under the existing incentive program, passed in 2005, production companies get a 10 percent rebate on what they spend in Colorado in return for spending 75 percent of the film's total budget in state and hiring 75 percent of the crew in the state.

Because of the way movie economics work, a single, highly paid star or director's salary could skew the film's budget so much that meeting those thresholds would be impossible, Shand said.

Colorado also lags in the size of the pot, with a total yearly cap of $600,000. By comparison, Arizona's program has a $50 million yearly cap, and New Mexico has no limit.

Only two movies have taken advantage of Colorado's current incentive program. The producers of the independent film "Bring Me Men," who plan to begin shooting in May at the Air Force Academy, said the incentive was an important part of their financial plan.

"Studios are not going to look at a state that has very limited annual funding," said Joe Chianese, vice president for business development and production incentives at Entertainment Partners, a Los Angeles production services firm, in which pairing movie companies with state incentives is a growing part of the business.

"For our company as well as the industry, production incentives are a key factor in whether or not a production gets made and where it gets made," Chianese said.

The incentives business, meanwhile, is escalating. When New Mexico started its program in 2002, it offered a 15 percent rebate and loans capped at $7.5 million. That was considered generous at the time, but the state felt the need to up the ante only three years later. Louisiana raised its credit from 15 to 25 percent.

There are now only three states that don't offer film incentives, and one of them, Alabama, plans to introduce incentives this year. And the federal government offers a 100 percent tax write-off for production costs on films between $1 million to $15 million to keep productions stateside.

The key thing, Shand said, is that most of the money a film spends locally comes from somewhere else, which is considered an economic stimulant. Filmmaking is a clean industry, he argues, and in these troubled economic times, Hollywood is nearly recession-proof.

"People still want to be entertained, even in bad times," he said.

Griffis, the Springs' film commissioner, said states have to pay to play. At a meeting of film commissioners from around the country in Santa Fe, incentives were front and center.

"We are being forced into a situation where incentives are incredibly important," she said. "We can still be competitive if people are looking for a definite location, but for those really big budget films - they can make anywhere seem to be any place they want it to be."

Not everyone, even in the film industry, thinks the movie biz is all it's cracked up to be, though.

"I know people who have other jobs that are worried about their futures, too," said Michael Wieben, who owns Big Dog Grip in Colorado Springs and has worked on everything from small commercials to big Hollywood features.

"If there's a state where they're not getting everything handed to them, like Colorado, then they don't come there," he said. "I don't think that's right - nobody else gets that."

But Pete Schuermann, a local director and editor who has shot independent films in Colorado Springs, said the film industry in Colorado is hobbled without incentives.

"Colorado has always had great talent," he said. "It all comes down to investors and investors willing to do the highrisk investment of filmmaking."