More than 10 years into Louisiana film tax credits local industry still has ways to grow

Posted on October 6th, 2014 by Lenny Alsfeld

Josh Overbay’s left elbow pins a ratty piece of cardboard to a window as he uses his right hand to tear a piece of painter’s tape, attaching the makeshift blackout curtain to the wall of the LSU classroom. Behind him, six or seven film students unclasp and unzip the cases containing their film equipment to begin setting up a camera, lights and screens.

“That sound I told you never to make? It’s that one right there,” Overbay laughs gently as he adjusts a piece of equipment for one of his students.

The class, a practicum that offers LSU’s film students a hands-on experience with top-of-the-line cameras and equipment, is a patchwork of these kinds of lessons intermingled with the awkward moments of the learning process as both students and teacher get to know each other.

Overbay, a professional independent filmmaker is the university’s first-ever staff member dedicated to the school’s growing number of film students, and it’s only taken him a few short weeks to understand exactly where the flagship university’s program stands when it comes to homegrown filmmakers.

“We’re behind,” he said. “I think we’re really behind. … The impetus for (LSU’s film program) was very much to catch up.”

The theory behind introducing Louisiana’s film tax credit incentive program was to establish an indigenous industry that hadn’t existed before. There’s no denying the hundreds of millions of dollars of film business the state hosts annually, but without the incentives, that industry would crumble while our own homegrown filmmakers, writers and directors are still working to carve out a permanent place in that industry for themselves.

Louisiana officially introduced the tax credits in 2002, rolling out the red carpet for big budget productions and some major award-winners like “Django Unchained” and “12 Years a Slave,” which have been wildly successful in creating “Hollywood South.”

The state’s movie industry hit the billion dollar mark in recent years, and in 2013 outpaced California and New York for the No. 1 spot for movie production in the country, but not without controversy. Opponents of the program have repeatedly underscored their cost to the state and questioned what, if anything, the productions do for Louisiana’s national reputation. But without the credits’ continued existence, our indigenous filmmakers won’t have time to catch up to taking advantage of the enormous opportunities now on their doorstep.

Without more public buy-in and support of growing a local, homegrown movie industry, legislators could more easily decide to do away with the credits, and we’d be left with little to show except large, empty soundstages and film workers packing their bags for greener pastures.

“To build an industry — any industry — it doesn’t happen in a few years. It takes many, many years,” said Diego Martinez, the executive director of Millennium Studios in Shreveport. “It’s building infrastructure, education, encouragement, financing, all these things have to come into play, and they’ve slowly been coming into play.

“There are great people in this state pushing things forward to make things happen as quickly as possible.”

PUTTING MONEY WHERE OUR MOUTH IS

When Natalie Portman stepped up to the Kodak Theatre podium in February 2011 to receive an Oscar for her performance in “Black Swan,” she partially had a family in Houma to thank.

The Thompsons are the force behind Cross Creek Pictures, which has been one of the few Louisiana-born businesses to get in on the dollars and cents side of moviemaking. Partnering with professionals who know the industry well has resulted in a successful business, and Cross Creek has been a major backer on projects like “A Walk Among The Tombstones,” “Rush” and “The Woman in Black,” in addition to “Black Swan.”

The movie tax credits, however, were not what guided the family into the business. The Thompsons, who have a history in the oil and gas industry, saw a hole in the market created by the 2008 economic downturn. That being said, the family still count finding a Louisiana project among their priorities.

“We’re from south Louisiana,” said Timmy Thompson, CEO of Cross Creek Pictures and the senior vice president of business development at The Cross Group. “We are looking for the right project (to film in Louisiana) … but to date, we haven’t really found anything yet that would work for us.”

That kind of disconnect between the financiers and the filmmakers has been a problem since the industry began picking up steam in the state, according to Patrick Mulhearn, the executive director of Celtic Media Centre in Baton Rouge.

“If you have the people who have that kind of money to agree to only make those movies in Louisiana — it’s almost like a patriotism, this sense of pride in your state,” Mulhearn said. “Then we’d have something but, again, until somebody makes a commitment … that component is going to be missing.”

Creating a new industry takes more than dollars from the state budget — and there’s no arguing the film tax credits have accounted for a lot of them.

“We’ve put up roughly a billion dollars … since its inception,” said Greg Albrecht, the chief economist for the Louisiana Legislative Fiscal Office. “The net cost to the (state budget) is very large. It’s not a net gain. The decision is, is it worth spending the money on? … (State legislators) think it’s worth that, and we keep doing it.”

But as for the tax credits, they don’t kick in until a $300,000 threshold has been met, which is a contentious issue even among supporters of the credits.

At a Sept. 25 meeting of the Entertainment Industry Development Advisory Commission, Chris Stelly, the current executive director of LED’s Louisiana Entertainment, said smaller productions need access to cash and equipment more than they need the promise of tax credits, which are not made available to productions until later in the process of filmmaking.

But Louisiana Film Entertainment Association president Will French disagreed, saying the threshold should come down to $100,000, arguing that “tax credits for smaller productions translate into cash.”

“We have an umbilical cord to Hollywood,” said Liza Kelso, the executive director of Film Baton Rouge, during a separate interview. “That’s the way it is. … That said, it makes a lot of sense to invest in films in Louisiana so we can have solid, developmental roles with film.”

Successful programs for investing in these smaller, independent productions usually take the form of grants, and Louisiana government does have one on the books. The Louisiana’s Filmmakers Grant, however, has only been offered once, Stelly said, before falling to the ranks of an unfunded mandate since its inception in 2011.

“There’s been a lack of support,” said Martinez of Millennium Studios. “There’s been an effort to help in financing (projects for) smaller filmmakers, indigenous filmmakers, and it hasn’t materialized the way it should.”

“There is no art without the money, and ultimately it’s a business. You have people investing and they want to see returns. That’s the way it is.”

TURNING A SPARK INTO A FLAME

Hamp Overton would like to say that the film and theater department at the University of New Orleans has blossomed in the last decade because of how brilliant its professors are, but he recognizes that there are other incentives to life in New Orleans drawing his students.

“The reality is that if you want to study film, there’s lots of places to go,” said the associate professor of film, who added that tuition cost is always a factor. “There are many things to consider… There’s a huge industry here now, and people are aware of that as more movies are made down here.”

The biggest difference between the university’s program when he arrived in 2004 and today, Overton said, is the impact of the local booming movie industry has had. From the kinds of guest speakers to the jobs students are able to walk into as they graduate, the difference is stark. What hasn’t changed, he said, is where the jobs originate.

“It would be nice if we could have original content generating here,” Overton said. “I’m hoping we get more local writers with more work.”

Much of the education of Louisiana’s film workers has been done on a grassroots level through programs offered by organizations like the New Orleans Video Access Center and on-the-job training, but as film programs within the state’s formal institutions continue to attract more students, educators are hoping to continue honing the skills of new writers, directors and actors in-state.

“Ultimately, you can help spark the fire, and I think that’s what good education does,” said Overbay, the assistant film professor at LSU. “It helps catalyze those ideas and encourage them, but … it has to come from the artist themselves, and that’s why it’s hard to predict. It’s hard to create. It’s hard to control.”

The most important part to fanning those flames, Overbay said, is to create an environment that welcomes artists and encourages out-of-the-box thinking.

“It starts with guys like Richard Linklater in the 1980s who said, ‘I can make a movie outside of the system.’ So, he makes ‘Slacker,’ … and then out of that, (the University of Texas at Austin) starts building up their film program, and you have guys like Wes Anderson coming out.”

Despite LSU’s position as the state’s flagship university, it was decidedly slower to build up its film program than UNO, but professors there hope to finally be on the way to a bigger and better option for students.

“I couldn’t figure out why the university, particularly with the connection to the Louisiana economy, wasn’t stepping forward and making (the film program) a priority,” said LSU associate professor of acting and directing Richard Holden.

In the last few years, the film concentration grew out of the theater department there through “sheer tenacity and the ability to move some dollars around,” said Holden, noting that as the program grows, keeping the film tax credits in Louisiana is critical.

“We have amazing people here, but in terms of LSU’s connection to everything, it’s a no-brainer,” he said. “I know (film is) not the petrochemical industry, but … it’s just like the theater. It reflects our experience. … We have real stories to tell here, and there are great people to tell them and let this develop into something that will last.”

And it is a little more complicated than the state legislature or a school deciding to appropriate money. It takes public buy-in, too: supporting grassroots efforts like the Louisiana International Film Festival or the 48 Hour Film Project in New Orleans, helping with fundraising efforts and, sometimes, just buying a movie ticket.

“Austin is known — not like a place like Louisiana that has a lot of productions happening — but that’s where artists live,” Overbay said. “People leave L.A. to live in Austin because it’s a community that’s friendly to artists.”

SHARING THE WHOLE PIE

When it comes to talking about the film tax credits, Liza Kelso, the executive director of the Baton Rouge Film Commission, has a phrase she comes back to often: “It’s forest, not trees.”

Although Kelso’s main priority is keeping film professionals in Baton Rouge at work, she recognizes the importance of keeping those tax credits, and keeping those tax credits means maintaining an active film industry all around the state.

“It’s a longterm issue with keeping filming evenly balanced … so the entire state can enjoy the benefits of film that’s here while paying for the tax incentive,” Kelso said.

More film activity around the state means more on-the-job educational opportunities for film workers, plus a safer bet that legislators will be protective of those jobs come session. That kind of stability is key while the independent filmmakers, writers and directors begin to find their own place in the state’s industry.

Spreading the films out across the state, however, is not quite as easy as it might seem. Beyond the bricks-and-mortar infrastructure that comes with building movie studios, it also takes managing the requirements of industry professionals.

Charles Rapp, a film production manager who has worked on projects like “Pitch Perfect” and “Search Party,” is a poster-child of the state’s film industry: Born in New York, he moved to Los Angeles to find work and ultimately landed in Louisiana, where he found he could move up the ranks faster than anywhere else.

He’s watched the state’s film industry shift around the state as hurricanes and other factors have made some locations better options than others.

“People kind of heard about Shreveport and came there to work from where they were from, and now in the last five years, a lot of people have migrated to New Orleans and maybe a few to Baton Rouge,” he said. “That’s the issue.”

That issue is the matter of production centers. To really understand, you need to learn a bit about the industry’s union rules. The International Alliance of Theatrical Stage Employees (IATSE) labels certain cities as “production centers.” Movies based outside of these cities are required to pay a stipend to its IATSE union workers. Both New Orleans and Shreveport are considered production centers under IATSE rules, which means movies do not have to pay union members a living stipend for projects filmed there.

To clarify, a movie would be required to pay an IATSE worker from New Orleans or Shreveport a daily stipend for working in Baton Rouge. However, an IATSE worker from Baton Rouge would not receive a stipend for working on a film in New Orleans or Shreveport even if they drive in daily.

“A film company wants to come to a city and not have to bring people in,” said Rapp, whose job as a production manager means he watches the bottom line and is responsible for hiring crew. “They’re going to bring in a few key players, but then they want everybody else to be local.”

“When I do movies in Baton Rouge, (for example,) and I need 25 people from New Orleans to make the crew, that’s 25 times six weeks times the hotel rate. Do the math. That’s a lot of money.”

That Baton Rouge is not an IATSE production center is not a new problem. The label is bestowed by an agreement between the Alliance for Motion Picture Television Production and IATSE, and during the last vote, which was in 2012, Baton Rouge lobbied hard for the designation. In an August 2012 letter, Gov. Bobby Jindal even asked the organizations to give Baton Rouge the label before it went to vote, but to no avail.

Mike McHugh, the business agent for IATSE 478, which represents Louisiana and southern Mississippi, was adamantly opposed to Baton Rouge becoming a production center during both a phone interview and the Sept. 25 advisory commission meeting. He cited a desire to protect the union members in New Orleans who would lose their stipend for traveling to Baton Rouge productions and his argument that the classification would not bring any new business to Baton Rouge.

But other industry observers say at least some productions have bypassed Baton Rouge and other Louisiana cities in order to head to New Orleans or Shreveport.

“It’s about building crew here (in Baton Rouge),” Kelso said. “We have strong enough and qualified enough people here and a wonderful way of life … and I know we could create a boon. You build the corridor between Baton Rouge and New Orleans … but we need everyone on board to do that.”

‘PUSHING THINGS FORWARD’

Louisiana’s film industry has come a long way since 2002, but there’s also a long path to self-sustainability. The state is on the road, but it’s not there yet. With most of the projects coming here representing more of a drive-by industry mentality — dropping in when they film but neglecting to actually move their studio offices here — the state still needs to push its own filmmakers into the mix.

“If you want to grow something sustainable, you have to have homegrown industry,” said Sherri McConnell, a New Orleans-based entertainment business and economic development consultant who served as the head of Louisiana Economic Development’s Office of Entertainment Industry Development for about five years.
“It’s about jobs that pay taxes and buy homes and pay property taxes. … In the long-term, we have to figure out how to incentivize actual business development and relocation and the growth of companies here that create content, as well as our own content creators.”

But the film tax credits, which Louisiana’s film industry supporters say are crucial to allow the moving parts to grow into maturity, are consistently on the chopping block at the Legislature. Watchdogs on both sides of the issue say it will likely take more tweaking until the credits are more palatable.

Supporters are already mulling over those kinds of changes with meetings of the Entertainment Industry Development Advisory Commission. During the Sept. 25 meeting, options talked about included salary caps, boosting help for independent films and filmmakers and tracking local incentives.

During a contentious conversation about the issue of production centers, commission chairman Sen. J.P. Morrell cautioned industry supporters about the need to work together and maintain a unified front.

“Opportunistic legislators” will likely bring the tax credits up for major cut-backs during the next Legislative session, he said.

“It will be just as ridiculous this year as every two years, and we’ll fight it off,” Morrell said. “It probably won’t be this session, but two years from now, there will be a tax credit scrum, and those without political clout will absolutely get sacrificed to the tax credit gods.”

Source: http://www.nola.com/entertainment/baton-rouge/index.ssf/2014/10/louisiana_film_tax_credits_10.html