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Studios executive responds to film incentive ‘betrayal’

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Today’s vote by the House Finance Committee that defeated a proposal to extend a modified version of the state’s film tax incentive has prompted rebuke from the executive vice president of EUE/Screen Gems Studios in Wilmington.

Bill Vassar. File photo.

Bill Vassar. File photo.

Executive Vice President Bill Vassar said in a statement that Rep. Ted Davis (R-New Hanover) offered his proposal for a modified incentive with the understanding that he had the support of fellow Republican legislators to see it passed. That proposal, to lower the current 25 percent refundable tax credit to 22.5 percent, and to lower the maximum credit allowed from $20 million to $15 million, failed on a 20-16 vote.

A statement from Vassar described the vote as a ‘betrayal.’

“Yesterday, Rep. Ted Davis started drafting new legislation in the NC House that would keep those three components intact,” Vassar said, referring to the state’s available crew, variety of locations and attractive incentive.

“Last night, Rep. Davis was told he had the support of seven of his Republican colleagues. That was not the case this morning when those Republicans pulled their support at the direction of the House Leadership,” Vassar said. “This shameful maneuvering leaves us now with Senate Bill 743—which guts our industry.”

Related story: Proposal to extend film credit fails

As written, that bill would see incentives handled under a grant fund concept as opposed to the refundable tax-credit model. As written, productions that could qualify for the incentive under the grant concept are feature-length films that spend $10 million, TV series that spend at least $1 million per episode, and commercials that spend $500,000. Grants would be limited to one per production and could not total more than $5 million for films, $5 million for TV series and $250,000 for commercials.

Vassar said that plan would make North Carolina less attractive to film productions.

“Our clients have already told us they can’t build a budget around a grant program. SB 743 will render our industry DOA with decision makers who place productions globally,” Vassar said.

Vassar’s full statement follows below:

Statement from Bill Vassar

Executive Vice President, EUE/Screen Gems Studios Wilmington, NC

June 11, 2014, 3:52 pm

After 18 years of privately investing, building and nurturing the film industry in North Carolina, my company is shocked and stunned that events in the House Finance Committee this morning left the North Carolina film industry seriously, perhaps fatally weakened. Our company has been at the forefront of building a robust content production industry that has spent $1.2 billion in NC over the last five years. Our studios represent North Carolina’s largest private stakeholder in the industry.

Today, we urge the North Carolina Legislature and Speaker Tillis to rethink this morning’s actions, and we welcome the opportunity to collaborate with you to keep 4000 North Carolina film jobs alive.

The Cooney family invested our company’s private money (we receive no incentive funds) to build Stage 10, the anchor stage that helped us land “Iron Man 3″ and bring $130 million in spending to the state. We have worked tirelessly to help legislators understand that three things are required to have a healthy film industry:

1) Seasoned, well-trained crew. Ours in North Carolina, and especially in Wilmington spans three generations.

2)  Diverse shooting locations to accommodate a wide variety of scripts and settings.

3) The incentive. And a competitive incentive—above 20 percent with reasonable caps.

Yesterday, Rep. Ted Davis started drafting new legislation in the NC House that would keep those three components intact. Last night, Rep. Davis was told he had the support of seven of his Republican colleagues. That was not the case this morning when those Republicans pulled their support at the direction of the House Leadership. This shameful maneuvering leaves us now with Senate Bill 743—which guts our industry.

SB 743 will take us out of Tier One consideration. Tier One means that we are one of the first states a TV Series or film considers when planning to shoot and spend tens of millions of dollars. Our clients have already told us they can’t build a budget around a grant program. SB 743 will render our industry DOA with decision makers who place productions globally.

Today, Rep. Ted Davis valiantly tried to propose new film incentive legislation that would keep our state’s industry and 4000 fulltime film jobs viable. Today, Speaker Tillis and the House Republicans gave us the signal they don’t want North Carolina to continue as a dominant player in the global film industry, an arena where the United States is still the number one player.

The House leadership is destroying a valuable North Carolina industry. We are re-examining our commitment to North Carolina. Unless new legislation is generated and approved in the coming hours, it’s clear we are not welcome to invest our company’s money, time and talent here any longer.”

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Posted by on June 11, 2014. Filed under Film,General Assembly,Local News,New Hanover County,Wilmington. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

8 Responses to Studios executive responds to film incentive ‘betrayal’

  1. Jeff Reply

    June 11, 2014 at 8:09 pm

    I don’t recall Dino DeLaurentis begging for money when he came to town. But then again, any study that claims that anyone who gets a paycheck for working on a film, even if for just one day, counts as a “job created” confirms that figures lie…and liars figure.

    Why should the taxpayers of North Carolina financially support your industry? Why not support the clinical research industry, the financial services industry, the fast food industry…and so on. While important to this area, to a degree, the film industry isn’t the be-all to end-all.

    • BeanieWells Reply

      June 12, 2014 at 9:55 am

      Jeff,

      You’re comparing the film environment of 30 years ago to today. Of course, incentives didn’t exist then so your comparison is pretty dumb.

      The state, county and city currently support all those industries you mentioned already. It’s in different ways but it’s all supported. Just look at the incentives that were offered Caterpillar by the state and even PPD (who got a sweetheart deal to move downtown). The state also spends a ton of money to throw sand on beaches year after year to protect the ol’boys houses. I’d like to see the ROI on that one day.

      The difference is a lot of those other incentives don’t require the up front spending that film incentives do. Filmmakers have to spend the money before they get a portion back. Companies like PPD get the incentives up front and then lie about their employee count to keep the money later.

      The killing of the film in NC is just an easy out for republicans who don’t get any lobby money from them. They’re also an easy target as it’s a complex issue to understand. The Tea Party fringe has the pubs so scared right now that they can’t afford to confuse them with facts.

      • Vog46 Reply

        June 15, 2014 at 9:40 am

        Beanie -
        Verizon got $875,000 and created 1400 jobs or $625 per NEW job created.
        Film industry got 31M in 2012 and created 55 NEW jobs or $563,636 per job – and these jobs are temporary.
        Verizons are permanent.

        PPD got property tax breaks for building on “brown dirt” or polluted property. They also got other incentives but had been here for years in several buildings across the city. I don’t have figures for them.

        Filming seriously started when? In the late 80s? Work is sporadic and between films people collect unemployment so that diminishes the return for jobs which is something film supporters never talk about.

        The ball park incentives would have resulted in about $57M for 128 jobs or $453,000 per job.

        Filming is losing proposition.
        One of the most damaging studies done:

        https://www.law.upenn.edu/journals/jbl/articles/volume14/issue1/McDonald14U.Pa.J.Bus.L.85(2011).pdf

        No independent studies confirm what that MPAA studies suggest. Estimates are over blown and gross assumptions are made by film supporters.

        Vog

  2. ILM Reply

    June 12, 2014 at 11:03 am

    The film industry may not be the only industry in NC but it is an important one. Besides the jobs that are created as a direct part of movie production it brings in a ton of tourism money. When is the last time you heard a family plan a vacation to an area because of their clinical research facilities or thriving fast food industry?

  3. Unaffiliated Voter Reply

    June 12, 2014 at 12:05 pm

    STOP ALL INCENTIVES for ALL businesses in NC !!!

    WE the PEOPLE will END this corruption!

    Incentivizing the film industry is a travesty when operational costs are already WAY lower in NC than the left coast! They should be thankful we have tolerated this fleecing for this long! ENOUGH !

    The government (TAXPAYERS) are NOT here to fund somebody’s business! They don’t fund mine.

  4. Bearclaw Reply

    June 12, 2014 at 1:28 pm

    Thom Tillis better never show his face in SE North Carolina again! Let’s start moving all the equipment down to Georgia.

  5. Tim Reply

    June 12, 2014 at 2:01 pm

    You should aim your criticism at Susi Hamilton who is so disliked by people in the House that she has been more of a hindrance than a help. Her constant attacks on Republicans on just about every issue has probably doomed anything Rabon, Goolsby, and Davis might be able to accomplish. Very sad.

  6. Bennie Lee Reply

    June 13, 2014 at 4:30 pm

    I worked in Wilmington 30 years ago, it was obvious then that jobs with those movies were very, very temporary and more of a topic for boosting than a
    “real” job. I have been a part time resident of Brunswick County for the past four years and the only thing that has changed is even those jobs are fewer.
    “IF” the NC tax payer would actually get anything financial out of it fine, great. The truth is California gets all if any of the money. What you are unhappy about is at the expense of the NC taxpayer you can’t brag about a film made in this area.
    Figure out a way for some of any profits stay in NC.

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