Motor City Vancouver's Newest Rival for Film Industry Dollars

Ah Detroit, the beautiful!

In recent years Detroit has experienced a renaissance. The downtown core, gentrified and rebuilt, now boasts pleasant walkways through historic districts dating back to the War of 1812. Lovely parks and fountains, green spaces and public artworks have been installed, creating innumerable ambient, pleasing places around the city. An influx of immigrants from around the world has made Detroit famous nowadays for its delicious ethnic cuisine.

Global warming has even changed Detroit’s formerly severe continental climate for the better. Balmy zephyrs wafting in from Lake Erie now moderate the heat of the summers and also the once bone chilling, almost Winnipegian, cold of the winters.....

"Not!”

(Having sneaked an important comedy technique into this column, as taught by Borat’s humour coach in Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan, let’s cue the laugh track.)

The truth is that Detroit retains the blasted-out, post-apocalyptic, ghettoized qualities for which it is justly famous. If you add in the recent effects of sub prime mortgage lending, the city’s near legendary blight is actually growing and spreading out into new areas.

So why hasThe Butterfly Effect: Revelation (3) elected to shoot in Detroit instead of in Vancouver, as I reported in my last column? For an answer to that question, follow the money. Michigan, it seems, has awakened to the reality that SUVs, its principal export, are going the way of the dinosaur, along with General Motors. It has therefore decided that it would like the best film industry that money can buy as a possible replacement. Hence the 40 per cent(!) refundable tax credit program it has just created to attract movie production to the state, with an additional 2 per cent for “core cities” like Detroit. According to one estimate, in the last three months Michigan’s new tax credits have attracted 32 movies to the state, which between them will spend an estimated $233 million. What is a 42 per cent refundable tax credit? It is a refund, from state coffers, of 42 per cent of qualified production expenditures – basically all ‘in state’ production costs. The grant for out of state resident crew wages is capped at 30 per cent, and out of state resident actors’ fees at 40 per cent of eligible labour expenses. Still, there is plenty here to excite the avarice of film producers, including, apparently, the producers of the Butterfly Effect. The first two Butterfly Effect movies were shot in Vancouver, in 2004 and 2006.

There is nothing new about jurisdictions extending tax credits to snag the green, lucrative, knowledge-intensive film production business. In fact, BC was a pioneer in the field, and today offers a 25 per cent tax credit on qualified labour costs: note -- only labour costs. How afraid should we be of US states engaging in bidding wars for our business? We should be concerned about it, yes, although it doesn’t represent an life threat to our industry. Why not?

In praise of older infrastructure

In the 1990s, using an intelligently conceived tax credit programme, and with a 70 to 80 cent loonie as rocket fuel, BC built a film industry with a solid infrastructure. Our infrastructure includes “depth of crew”; Vancouver can field 30 film crews at any given time. We have state of the art studios: the Bridge, the Lions Gate Studios and the Vancouver Film Studios, for example. Small entrepreneurs have put together businesses that can supply every imaginable good and service to the industry, from exotic animals and swarms of bees to period furnishings and the construction of whiz bang sci fi props.

Crawford Hawkins is the executive director of the Directors Guild of Canada (DGC), BC District Council. He estimates that Detroit currently has only two resident TV commercial crews. Projects working in Detroit will therefore have to bring in skilled crew people, buy them hotel accommodations, and pay them per diems. They will also likely have to press funky disused warehouses into service as “studios” – there are plenty of those in Detroit. As for competing with the host of specialized services on offer in Vancouver, forget it. In Detroit, they simply don’t exist, except perhaps for firearms rentals.

"They’ll do it once” says Hawkins, referring to projects opting to work in a film industry frontier town like Detroit; “but the additional costs of working there will likely cancel out the tax credit cost savings. Add in the annoyance factor of working in a city that isn’t film-friendly, and it won’t turn out to be all that worthwhile. ”

So once they have burned their fingers, they’ll be back, right?

"The problem is that this takes away good business from us here and now,” says Hawkins. “Add projects lost like this to the other stresses brought on recently by the WGA and SAG labour problems, and this is definitely not helpful.”

Don Madsen runs Mount Pleasant Furniture, which has been providing period set furnishings to the film industry for more than 20 years. His inventory occupies 30,000 square feet of warehouse space.

“We offer set decorators the convenience of one stop shopping for period furnishings,” he says. "This has been a difficult year. Usually summers are busy for us, and we put away money then to bankroll us through the quieter winter months. Our summer business is way down. This winter will be challenging.”

So maybe Motown won’t overtake Vancouver anytime soon in terms of the size and scale of its film industry. But this year’s toxic brew of strikes, non strikes (SAG), currency appreciation, and a changing mix of jurisdictional tax incentives have certainly been taking a toll on our infrastructure providers. Vancouver’s film industry will need all of its resilience, together with its well-honed ability to work together in the common cause, to get through this year’s rough patch intact.

Around Town

The Tooth Fairy, a comedy feature film starring Dwayne ‘The Rock’ Johnson (who played agent 23 in Get Smart is in early preproduction for Twentieth Century Fox. This one has a long run, wrapping up in December.

Virtuality,a TV pilot for Fox, will be shooting in August, as will Inseparable also a TV pilot, for Fox and the ABC network.

Around Town – Not!

"The Butterfly Effect: Revelation (3) has been actively scouting. Word is it will begin prepping in August.” -- reprinted from the August 5 edition of the Insider Report