Wednesday, April 20, 2011 | 2 a.m.
- Successful Hollywood movies continue to sell Las Vegas (9-3-2010)
- No lingering 'Hangover' headache (12-19-2009)
- 'Hangover' brings new customers, campaign to Caesars (6-27-2009)
VEGAS INC Coverage
The high-paced, tantalizing world of Las Vegas is a huge draw for A-list celebrities and a mere hour flight from Los Angeles — yet we’re not the Hollywood of the Southwest. That title belongs to New Mexico, which offers a 25 percent tax incentive that has lured big film and television producers, bringing in an enormous amount of revenue and employment to what has historically been one of the poorest states.
The dirty little secret is out: Filming movies can pump money and jobs into even the most unassuming states.
With today’s technology, you can film a movie anywhere. Want a first-class Las Vegas casino? Build one in Burbank. Setting a scene in a five-star restaurant? New Orleans will work. Locations can be fudged; cash-strapped producers are following the money.
Nevada is one of only six states without tax incentives to lure film crews. So movie jobs that make sense in our entertainment-based economy are going elsewhere.
But Nevada has a plan. The Motion Picture Jobs Creation Act (Assembly Bill 506), drafted by Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, would extend tax credit to producers if they meet certain criteria.
The legislation is supported by Senate Majority Leader Steven Horsford, D-North Las Vegas, as well as the International Alliance of Theatrical Stage Employees Local 720, Screen Actors Guild, the Nevada Film Alliance, the Motion Picture Association of America and Directors Guild of America.
“If the Legislature gets busy, we can have film incentives this session,” says James “JR” Reid of JR Lighting, who’s been trying for a decade to get a bill like this passed. “By this time next year, this could be a done deal. We look forward to the days when we’re more worried about there not being enough people or equipment to handle the projects that are rolling in.”
Film tax incentive opponents have mocked other states’ plans, claiming they essentially pay people to do business and that the incentive is another way of saying “bailout.” The timing, they say, is off; we can’t afford to spend money to make money in these times of strained state budgets.
New Mexico’s new Republican governor, Susana Martinez, agrees: On Jan. 10, she presented a state budget that called for reducing state tax credits for films from 25 percent to 15 percent. Five huge projects, including the $150 million “The Avengers” blockbuster hopeful, immediately threatened to pull out. (In the end, she was unsuccessful, but got through a cap of $50 million on total incentives per film.) The issue remains a heated debate in the state whose film industry is second only to Hollywood, as well as in states such as Michigan and North Carolina.
The pushback in other states is giving Nevada an opening to get into the game.
Kirkpatrick’s proposal would require $250,000 worth of qualifying in-state expenditures in movie or TV work — or expenditures in movie or TV work — or $100,000 for smaller projects — to receive a 25 percent tax credit. Any expenditure for the project, from location and labor to the florist’s bill, would be eligible for this credit. And a team would have to do 60 percent of the shooting days in Nevada to get the tax credit, as an extra safeguard for keeping the money in-state.
“There’s a big advantage to coming last to the race, after 44 other states,” says Joshua Cohen, owner and producer of Cohencidence Productions. “We know how to avoid fraud, and we’ve put in those additional safeguards to make sure the money made in Nevada stays in Nevada. We can become a paradigm of what a good tax credit can do.”
This is where Nevada might lead the pack, despite arriving late. New Mexico’s incentives were a pet project of former Gov. Bill Richardson, an oversized personality and one-time presidential hopeful often teased for being too starry-eyed and reckless when it came to luring Hollywood to his state. His most vociferous adversary has been Dennis Kintigh, a Republican representative from Roswell, who has said, “You’re taking money out of the treasury and subsidizing the industry. Just because you spend money, doesn’t mean it gets back to the treasury.”
That’s a valid argument during a state budget crisis, but film incentives are most sought for the jobs and other economic activity they trigger — from set construction to equipment rentals to food purchases — rather than money being deposited into state coffers. Richardson says more than 10,000 jobs have been created and the state has earned $1.50 for every dollar spent, but even supporters have questioned the numbers.
Filming in and around Las Vegas seems like a cinematic slam dunk: A-listers such as Angelina Jolie, Nicole Kidman and George Clooney would have an enormous selection of five-star restaurants and hotels — or, given our proximity to Los Angeles, they could fly home every night. And the crew? If enough work was created in Nevada, the low cost of living makes it easy for them to move their families here.
Cohen says Las Vegas could easily become Hollywood’s unofficial “back lot.” “With the proximity to L.A. and the amount of natural locations we have to shoot here, from the Valley of Fire and Red Rock to the Strip, it’s a no-brainer.”
There’s plenty of space, too, to build sets and sound stages.
“It’s so easy to film here,” Cohen said. “Getting permits is cake compared to other states. It’s just that it’s expensive” because of the lack of incentives.
If a producer is shooting a film for $10 million, for example, it’d end up being $7.5 million in New Mexico after the rebate, or only $6.6 million in Alaska. Louisiana, considered a tax incentive success story, offers a whopping 35 percent tax credit, and has recently nabbed enormous projects, such as the latest “Twilight” movie. California, New Mexico and New York, which has a 30 percent rebate, generate the most film work.
“We could be stealing hundreds of millions of dollars from New Mexico, Oregon and Michigan, because of our proximity to L.A. alone,” Cohen says. “If someone’s working in L.A. and encounters union problems or an earthquake and needs to move, they can be here in a day.”
Las Vegas is the least educated major metropolitan area in the West. Yet, we’re staring down an entire industry with jobs that don’t require four-year degrees, jobs for technicians and people who are good with their hands. Good pay without a college education, but in a career with more longevity than, say, serving cocktails? Has there ever been a better fit for this city’s psyche?
Kirkpatrick’s bill is the ninth attempt at getting film tax incentives, and it just might be the last. At some point — as other states commit to years of filmmaking and construct soundstages and prop houses — Johnny-come-lately Nevada may not be able to catch up.
It’s not that Las Vegas lacks a moviemaking infrastructure.
Dream Vision Studios on Russell Road, the only major motion picture studio and event venue in Nevada and which has produced commercials and created props for Cirque du Soleil, is expanding from 16,000 square feet to 82,000 square feet. It is bringing in Aqua Dome for underwater filming and has the largest hard cyc wall and green screen — both necessary to film special effects — in the state, as well as the ability to do full 3-D filming and editing.
The bottom-line expense of filming in Nevada is a huge reason why the only attention Las Vegas often gets from Hollywood is reality TV, the most cheaply produced form of entertainment. When E!’s “Holly’s World” or MTV’s “The Real World” film here, three or four people (usually out-of-towners) make up the crew, unlike the up to 150 people, including many locals, who are on the set of a cable show such as “Sons of Anarchy,” being shot in New Mexico, at any time.
Many Las Vegas scenes are created elsewhere: the “Hangover Suite” garnered so much attention that Caesars Palace built one for tourists, even though the original was shot on a California soundstage. And more than 95 percent of “CSI” — television’s No. 1 drama — now in its 12th season, is filmed in California.
It doesn’t have to be that way.
The full version of this story first appeared in the April 11 issue of VEGAS INC, a sister publication of the Sun.