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Can tax breaks save SCV film industry?

Film insiders worry if incentives will keep movies in SCV despite tough times

Posted: February 28, 2009 1:08 a.m.
Updated: February 28, 2009 4:55 a.m.

Lighting, cameramen and makeup artists move around on set in between takes of the television show, "The Unit," Tuesday morning.

A film-industry leader said Friday, at a meeting called upon by Assemblyman Cameron Smyth, R-Santa Clarita, that she isn't sure if California's new tax credits for in-state productions will be enough to lure her firm back to California.

But Walt Disney Pictures is definitely looking at the deal, said spokeswoman Mary Ann Hughes.

"We are looking at California to see how it compares," Hughes said.

On Feb. 20, Gov. Arnold Schwarzenegger signed legislation creating tax credits, including a 20-percent tax credit for in-state productions under $75 million, for film and television productions as part of the economic stimulus provision in the new state budget.

Over the next few weeks, the California Film Commission will develop program guidelines. Smyth called the meeting with city and a few film industry leaders to discuss what kinks need to be worked out, and whether those leaders believe the credit will help bring feature filming back to California from other states offering attractive incentives.

In the past, production crews looked to California for its industry-friendly legislation and talent, but "unfortunately it's not enough to keep them here anymore," said Michael DeLorenzo, owner of Santa Clarita Studios. "Producers are looking for financial incentives. This is a great start. I just hope it's not too late."

Part of the tax incentive includes a 20-percent credit on new television series licensed for original distribution on basic cable, but that could mean all network filming is out, said Hughes.

The $75 million production-budget maximum for the 20-percent incentive means productions that anticipate budgets near that amount will look past the incentive, Hughes said.

The guidelines need to be worked out to see what productions will actually qualify, Hughes said.

"A lot won't qualify," Hughes said.

Local leaders touched upon the issues of impact in Santa Clarita. A good portion of Santa Clarita's work force is impacted by lost film production.

Beverly Hartigan hopes the incentives will bring more traffic to her business, Ultimate Effects. The special-effects company saw a one-third decline of work in the last two years because shows have gone to other states.

Businesses in the Santa Clarita Valley that aren't in the film industry could also benefit from the incentives.

"The caterers, hardware stores - that's where we get hit here," said Bill Kennedy, of the Santa Clarita Valley Chamber of Commerce.
Smyth said it's important that the tax credit is implemented properly, and it was good to have feedback to make the necessary changes.

"We were able to get the incentives in place, but there are going to have to be amendments and cleanup efforts," he said.


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