Rolling (tax) credits

Filmmakers, post-production companies ponder benefits of new grant-based program

REGION – A revamped film incentives program could mean more movies are made in Michigan, but area film industry insiders remain cautiously optimistic about the changes that went into effect earlier this year.

"We're optimists – maybe foolishly so," says Clover Roy, director of regional operations for IE Effects, a visual effects, production and post production studio in Traverse City that has worked on films such as "The Green Lantern" and "Harry Potter and the Deathly Hallows: Part II." "The alternative to being confident about things turning around is defeatist."

Roy has come to know much about the film incentives issue, having gotten involved in advocating that they continue once Gov. Rick Snyder decided to do away with the incentives model that awarded more than $360 million in film tax credits from its inception in 2008 to 2011. In its place: a grant-based program of $25 million a year for the next five years that officially started in January.

Projects must have a minimum spend of at least $100,000 in Michigan to be eligible.

Roy and others in the industry are heartened by aspects of the reconfigured film incentives program – some would like to see the $25 million allocation eventually increased to at least $100 million – and yet worry about Michigan's once-burgeoning reputation for encouraging filmmaking in the state.

"The fact remains that the damage to the perception of Michigan being a viable place to come to film is still very grim," she says. "We have this terrible reputation now of being wishy-washy."

Rich Brauer, whose Traverse City-based Brauer Productions, Inc. has been filming in Michigan for more than 30 years, agrees that tinkering with the process confused many people in the industry, including Hollywood studio executives.

"Michigan had the best incentive in the country," Brauer says of the original film incentives program that offered tax credits of up to 42 percent of production and other costs on eligible projects that spent at least $50,000 on movies, television shows, commercials and other productions. "Everyone in L.A. said, 'They'll never be able to pull this off, it'll never work.' When our new administration took hold, and it all started to wobble, people in L.A. said, 'See? We knew it wouldn't work.'"

Brauer, who participated in the original film incentives program, said he's been frustrated with the transition from the old model to the new one. For several months last year, as lawmakers hammered out details of the revamped program, he wasn't sure if and when he'd receive grant money for his latest movie "Dogman."

"Our industry was sort of in flux. We had no answers. They were changing the rules," he said, adding he did receive grant approval months into the process. "The problem with all of that flux stuff is it sends a message to the world that Michigan had no idea what it was doing. Our credibility went right down the toilet."

Still, he's hopeful that will change-in time.

"Right now there is actually a plan afoot, it's a documented program explaining what the program is," he said.

Indeed, educating those in the industry is a high priority for the Michigan Film Office, said spokesperson Michelle Begnoche.

"There was an education process that's ongoing," she said of the new program that was in place October 2011 but overlapped with the previous model through December 2011. As a result, the Michigan Film Office placed a hold on all applications through the end of the year. "We're working really hard to re-educate here in Michigan and out in Hollywood. We're continuing to talk with the studios. We're excited about what we think we're going to be able to do."

The new program ensures faster turn-around of grant applications, as well as funds being distributed more quickly, Begnoche said. Michigan's film incentives program remains competitive with other states, she added.

"What we made sure was maintained is a strong system of checks and balances. We still have a very rigorous application process," she said.

So far this year, the Michigan Film Office has received eight applications for grant money, Begnoche said. Last year, 24 projects were approved.

"We're in a good place now. We know now what to expect over the next five years at least," she said. "We're taking every opportunity we can to get in front of the industry and talk about our program and explain what the changes are and the benefits moving forward."

The new incentives program ultimately might help the smaller production companies like his the most, Brauer said. It could mean making two movies a year, rather than one, he said.

"The way the program reads now, because I'm small guy, it's fine. The incentive is actually an incentive and that's a good thing," he said. "But does creating an incentive to little guys like me make an industry in Michigan? It could."

Roy, of IE Effects, is looking forward to business picking up – a definite positive after last year having to lay off 15 people because of the film incentive changes.

"We put in a half million dollars to set up here with equipment, and I'm sure there are others who did the same thing," she said of IE Effects facility on North Division Street. "We're not the people generating the work. We're vendors that rely on the work that comes in to the state … Our pipeline is clogged with potential."

Brauer also is choosing to look ahead to what's to come.

"I think once the economy picks up in general and Michigan gets itself back where they listen to the film industry more, I have a feeling in my lifetime it will be back…it will be doing what the other states have been doing for many, many years which is offering a stable, well-funded program. That's my hope."

Filmmaker Michael Moore declined comment for this article. BN