The sun has set on the state’s film incentive, which expires at midnight tonight, New Year’s Eve.
As revelers welcome 2015, a new film credit—a grant fund program—will begin to take effect in North Carolina.
The change has been months in the making, proposed at the start of this year’s legislative session and finalized last month with a set of draft guidelines. But its impact has already started to be felt, and is predicted to continue into the new year.
State legislators opted to let the current incentive expire, via a sunset clause included in legislation. The credit provided a 25 percent tax break for productions that spent at least $250,000, with a maximum per production of $20 million. In its place is a scaled-down, limited grant fund, which caps the amount of awardable credits to $10 million statewide, with a per-production limit of $5 million for feature films and TV shows and $250,000 for commercials.
Supporters have said the new credit will provide more control and accountability of credits awarded. But critics, including film industry professionals, predict the reduced amount of awardable credit will result in fewer productions rolling cameras in North Carolina, choosing instead to film in states with more attractive tax credits.
Related story: General Assembly adjourns, no action taken on film credit tweak
While negatively received by some during the General Assembly session, the grant fund has been accepted as the new normal, for now, with industry representatives looking beyond its limitations and holding out hope that revisions could be made when the assembly reconvenes in Raleigh in mid-January.
“It’s kind of a start,” said Johnny Griffin, director of the Wilmington Regional Film Commission, in an interview that followed the draft guidelines’ release.
“The only real setback is that, given the amount of money that we have to work with, it’s going to run out real fast,” Griffin said. “So there’s not going to be but a couple of projects that even file for the thing, and then it’s kind of over with.
“Looking long term, if we were to keep the grant program and have more money in it, then that certainly makes it more doable,” he said. “…It’s just, with this small amount of money, you’ve got three or four projects that all want to get their name in the hat, and you can’t give any one of them any sign that they’re going to get it over the other one.
“Ultimately, at the end of the day, somebody will get it and others will not get it,” he said.
“Under the Dome,” which films in Wilmington and has announced it will return in 2015, has been promised a portion of the grant fund’s credits, through it’s not yet clear how much will be awarded. If it receives a full $5 million, that would leave $5 million for whatever other productions apply for a grant—at least for the first six months of the year, the timeframe specified in the legislation.
The amount is considerably less than what was awarded to productions the first half of this year. Productions spent an estimated $268 million in the first six months of 2014; 25 percent of that, under the current incentive, would come out to approximately $67 million.
The North Carolina Film Office posted a draft of the grant fund guidelines in November. While subject to change, with a final version set to be presented New Year’s Day, the guidelines provide insight on how the program will be applied. Among other details, the guidelines specify that funds will be awarded at the “sole discretion” of the state secretary of commerce.
Sharon Decker, who was credited with the “Under the Dome” deal, is stepping down from that position effective today. John Skvarla, previously the secretary of the department of environment and natural resources, has been named as the next commerce secretary by Gov. Pat McCrory.
While “Under the Dome” is expected to return, and current productions, like the feature film “Bolden!”, will continue rolling cameras into the new year, film officials in Wilmington expect 2015 will be a much slower year than 2014, which saw more than a dozen productions filmed in the Port City. Previous years saw comparable numbers, peaking in 2012 with “Iron Man 3,” which officials credit the incentive with helping to lure to Wilmington. This fall, however, Griffin reported inquiries to his office were down more than half what they had been the year before.
But Griffin and Bill Vassar, executive vice president of Wilmington’s EUE/Screen Gems Studios, remain optimistic about the new year and what it holds for the future of film in the state.
“Business will slow considerably next year because of the changes in the state film program,” Vassar said in a statement last month. “Our elected officials indicate that there is a consensus growing in Raleigh that there is value in strengthening the new film grant program in 2015. We truly hope that is the case.”
“We’ve asked the hard question,” Griffin said in November. “‘Is there the overall desire to kill the film industry?’ And we’re being told: ‘No, absolutely not.’
“There does not seem to be a desire to just kill this industry,” Griffin said. “What we’re hearing is that there really does seem to be a legitimate desire to figure out a way to make this incentive program for the film industry work.”
Past stories:
- Grant fund concept for film incentive advances; ‘much better for the taxpayer,’ senator says
- Amid industry uncertainty, film commission looks to keep cameras rolling
- Year in film, 2013: Big numbers for North Carolina, Wilmington
Jonathan Spiers is a reporter for Port City Daily. He can be reached at (910) 772-6313 or [email protected]. On Twitter: @jrspiers
