News

Governor Whitmer Announces Support for Revival of Michigan's Film Industry

When Governor Gretchen Whitmer takes the oath of office for her second term in January, it will be the first time in 40 years Michigan will have a Democratic majority in the legislature and a Democratic governor.

“It’s very exciting,” said Whitmer. “The legislature is still the legislature, so things don’t always move quickly but I look forward to working with both Democrats and Republicans to solve problems.

“We will be able to make the kinds of investments and policies that will truly benefit Michiganders.”

IMAGE: Susan Smiley - The Macomb Daily

Whitmer would also like to see a revival of  Michigan’s film industry. In 2008, then governor Jennifer Granholm adopted a filmmaker incentive program. That program, which was terminated by Gov. Rick Snyder in 2015, stimulated business in the state and generated more than $300 million of film production spending at its peak.

“I was always proud to support the incentives as a legislator,” said Whitmer. “Michigan is such a beautiful state and I think showcasing it is a way that we can tell the Pure Michigan story and show what we have to offer.”

Even businesses not directly connected to filmmaking such as restaurants, catering services, hotels, and transportation providers experienced an economic bump from film crews working in the state, according to Whitmer.

“People benefitted from having the film industry here who were not even on the film set,” she said.

Read the Rest of the Story in The Macomb Daily

NOTE: This story appeared in Northern Express.

LIGHTS, CAMERA, ACTION!

By Craig Manning

What state is at the epicenter of American moviemaking?

If you answered “California,” you might be surprised. While California’s status as the home of Hollywood has made it the de facto filmmaking capital of the world for generations, the Golden State has been outpaced in recent years—or at least given a run for its money—by states like Georgia, New Mexico, and Louisiana. Those three states took the top three slots on a 2020 ranking of the “top locations for motion picture and TV production” from Business Facilities, a magazine that helps businesses with site selection. California and New York settled for fourth and fifth, respectively.

How, you might ask, did three seemingly random states leapfrog their way to the top of the film production food chain? Ask anyone in the entertainment industry and you’ll probably hear the same answer: robust film incentives.

Once upon a time, Michigan had a robust film incentive program of its own. Adopted by the administration of then-governor Jennifer Granholm as a means of helping the state recover from the late-2000s financial crisis, Michigan’s film incentive program took off in 2008 and, at its peak, generated nearly $300 million of film production spending in the state. In 2015, though, Granholm’s successor, Rick Snyder, signed a bill that killed the program, effectively crossing Michigan off Hollywood’s list of potential production destinations.

Now, legislators in the State Senate and House of Representatives are pushing to bring film incentives back to the Mitten State. Will their efforts put Michigan back in Hollywood’s good graces? Or will politics keep the state from getting its close-up?

Transformers, and Avengers, and George Clooney, Oh My! A Brief History of Michigan Film Incentives

According to the Detroit Free Press, just two major films were produced in Michigan in 2007, bringing approximately $2 million in film production spending to the state.

A year later, those figures shot off the charts.

In 2008, Governor Granholm approved an incentive program that Traverse City filmmaker Bill Latka says was “the largest film incentive in the country” at the time. “It was basically Granholm’s attempt to get some new activity going here in Michigan, because nobody was making cars [during the financial crisis]. So they created a 42 percent cashback incentive, where if you spent $1 million [on a film production], you’d get $420,000 back. And it instantly brought you-would-not-believe-how-much work to Michigan.”

Per the Free Press, the Michigan Film Office approved 71 applications in 2008 alone, generating $125 million of in-state film production spending and creating 2,763 Michigan jobs. Noteworthy film projects included Clint Eastwood’s Detroit-set Gran Torino and Drew Barrymore’s directorial debut, Whip It.

The ensuing years built upon 2008’s success. In 2010, Michigan had 66 approved film projects underway, generating $293.4 million in film production spending and creating 5,310 film production jobs. From the locales of Ann Arbor, which appeared in both the horror sequel Scream 4 and the George Clooney-directed political thriller The Ides of March, to the Detroit-heavy shoots of action films like Transformers: Dark of the Moon and Real Steel, Michiganders had lots of opportunities to spot their state on the big screen.

After 2010, though, the film incentive saw a major turning point in the form of incoming governor Rick Snyder. Where the film incentive program up to that point had been uncapped—meaning there was no limit on the amount of incentives Michigan could pay out in any given year—the Synder administration placed a $25 million annual cap on the program.

The change had a swift impact. Carry-over projects from previous years—such as the gargantuan $200 million Disney blockbuster Oz the Great and Powerful, directed by Michigan native Sam Raimi—meant there was still a significant amount of film production happening in 2011, including $201.9 million in spending. But the number of new project approvals dropped from 66 to 24, and Michigan lost out on some big Hollywood projects as a result—most notably, Marvel’s The Avengers.

It was a series of ups and downs for Michigan film incentives after that. 2012 was a slow year, with just 13 new projects approved and only $57.8 million in production expenditure. Then, in 2013, the program got a boost when Senate Majority Leader Randy Richardville successfully advocated to have the incentive cap doubled from $25 million to $50 million—a move that helped bring major films like Batman v Superman: Dawn of Justice, Transformers: Age of Extinction, and Need for Speed to Michigan.

In 2015, Snyder signed a bill that officially ended film incentives in Michigan. That legislation did set aside $25 million to sunset the incentive program during the 2016 fiscal year. But instead of drawing new projects to the state, the money was earmarked for either paying out incentives that had already been approved in previous years or dealing with the disastrous collapse of the state-subsidized Raleigh Michigan Studios.

Show Me The Money: An $80 Million Debacle

Based in Pontiac, inside the old General Motors Centerpoint truck complex, Raleigh Michigan Studios was, for a time, Michigan’s largest film production studio. Oz the Great and Powerful, for instance, was a Raleigh production. Viewed as a way to lead Michigan’s bid for relevancy in the film industry, the studio was able to clear its hefty $80 million in startup costs thanks to subsidies from state and local governments. The city of Pontiac waived property taxes for the Raleigh site and issued $18 million in municipal bonds, which the Granholm administration backed by using the state retirement system as collateral.

Despite a promising start with Oz, Raleigh Michigan Studios got hit hard by Snyder’s rollback of the film incentive program in 2011 and defaulted on a $630,000 bond payment the following year. The state was left to cover that payment—and other future defaults—out of its pension fund. Ultimately, Michigan cleared the debt in 2016, using $19 million of the final round of film incentive funding to settle the bill.

By 2017, there were no more film incentives to be had in Michigan. Film production activity in the state dried up and has not recovered since. In 2018, the land and building that had made up Raleigh Michigan Studios was sold off to a defense contractor.

The dream, it seemed, was dead.

There’s No Place Like Home: The Debate Over Bringing Film Incentives Back to Michigan

The cynical read on the Raleigh Michigan Studios fiasco is as a cautionary tale: a reminder of what happens when you chase a famously fickle industry with taxpayer dollars. But proponents of film incentives argue that there’s more to the story and that Michigan’s dalliance with film could have gotten a happier ending—and still might.

Much of the pushback against Michigan’s film incentive program in the early 2010s was grounded in a Senate Fiscal Agency report from 2010, which found that the incentives were generating just 60 cents of private sector activity for every dollar they cost the taxpayers. But pro-incentive advocates argued that the study was too narrow in its assessment and that it overlooked long-tail benefits, like the potential for the program to attract more young people to Michigan.

That debate is back on the docket in Michigan this year, thanks to a quartet of bills—Senate Bills 0862 and 0863 and House Bills 5724 and 5725—currently pending in the state legislature. The bills would give film production companies a base tax credit of 25 percent for in-state spending, plus another 5 percent for projects that include a “filmed in Michigan” logo in their credits. Production companies could also earn bigger tax breaks for hiring Michigan workers.

Latka sits on the board for the Michigan Film Industry Association (MIFIA), which has been advocating for the bills since they were introduced earlier this year. In his view, these bills propose a better incentive than the one Michigan let die in 2015. Instead of a cashback model, the new program would take a tax rebate approach. That distinction, combined with a smaller incentive and some additional motivation for producers to hire Michigan residents, would—in Latka’s opinion—create a better balance between the interests of the film production companies and the interests of Michigan itself.

“One of the criticisms of the last incentive was that some people said, ‘Oh, it’s just a Hollywood giveaway,’” Latka explains. “George Clooney would come to town and make a million dollars. And then the state would basically refund 42 percent of his salary back to the producers for hiring George Clooney. Well, this time, it’s not a cash giveaway. It’s a refundable tax rebate. So, say there’s a $1 million project that comes in. That would be a $250,000 tax credit that the producers of the movie will either use themselves, if they have a personal tax debt in Michigan—which is unlikely; or they would sell it to a Michigan business that does have a tax liability. So, a company like Cone Drive, or Hagerty, or Steelcase, or Ford, or General Motors, they could buy those credits at a discount, and then they get a discount on their Michigan state taxes. The money does not go out of state, basically, which was one of the big criticisms of the last incentive.”

Though he was living in California when the first incentives went into effect, Latka moved back to Michigan—his home state—as it suddenly became a film production haven. For several years, “there were all sorts of people that were working in the movie business here,” he says. “I would say three-quarters of them left when they closed out the incentive. Half of my friends moved to Atlanta, because Georgia has a big incentive program and they’ve stuck with it. These days, they do $8 billion a year in production in Georgia. That’s a substantial amount of money, and we could get a chunk of that back.”

State Senator Wayne Schmidt of Traverse City, one of the legislators leading the charge for the film incentives, says the legislation is unlikely to gain traction in the current legislative session. With the issue back on the minds of lawmakers, though, he’s hopeful that film incentives will eventually come back to Michigan.

“I don't think it’s going to get a lot of attention this year; we just wanted to make sure we raised the issue,” Schmidt says. “I know film credits and incentives in the past were kind of loosey-goosey and not always what people were looking for. We did an introduction of some bills that were smaller and more tightly focused to kind of see where the reactions were. Film is an area that we see a lot of young people getting into, and we certainly want to make Michigan an attractive place for young people—not just to stay here, but to move here. So, redoing those [incentives], refocusing them, and taking some best practices from other states and seeing if we can apply them here in Michigan, that’s the goal.”

Supporters of new legislation that would bring a film tax credit back to Michigan are hoping the measure can make the state a destination for filmmakers once again.

This story appeared on WOOD-TV 8 in advance of a Film Incentive Town Hall scheduled for May 11 at Lowing Studios in Grand Rapids, MI.

The MiFIA team, along with lobbyist Brendan Ringlever visited Rep. Wendzel, R-Watervilet, who serves as chair of the House Commerce and Tourism Committee, the first stop for MiFIA’s House Bills 5274-75. MiFIA provided important insights and spoke of the need for Michigan to join 40 other U.S. states with film incentive programs. Rep. Wendzel encouraged a committee hearing on the bills in April/early May.

MiFIA Board in Lansing with Rep. Jack O'Malley (third from left)

MiFIA joined two of our four film incentive bill sponsors, Rep. Kyra Bolden, D-Southfield, and Sen. Adam Hollier, D-Detroit, to share several spring MiFIA events across Michigan in April and May and the timing of committee hearings, floor action and enactment. 

MiFIA met with Sen. Ken Horn, R-Frankenmuth, chair of the Senate Small Business and Economic Development Committee where our Senate Bills 862-63 await a hearing.  We shared movie memories, including movies filmed in his iconic town, and the significant impact of film making for communities. Sen. Horn supported the first film credit and encouraged us to schedule a hearing in his committee this spring.

The MiFIA team enjoyed dinner with film incentive bill sponsor Rep. Jack O’Malley, R-Lake Ann, to share Capitol Day takeaways while Rep. O’Malley reflected on the work that lies ahead of us. We know that our determination is steadfast and industry support unwavering. The Michigan film industry stands united in the knowledge that a film program will help our great state when it needs us most.

In early 2006, I was approached by some members of the Michigan Film Advisory Commission, inquiring if I would join them on the film commission to assist in getting film and digital media tax incentives passed in Michigan, just as New Mexico and Louisiana, the front runners at the time, had done previously, among numerous other states.

Read full article at Crain's Detroit.

(WXYZ) — The push to bring back film incentives is moving through the Michigan State Capitol.

One of the leads in this effort is state Senator Adam Hollier of Detroit.

"Either we are going to be competitive or we're not. We've invested in the auto industry. We should be doing the same in the film industry," Hollier said.

During the movie boom in 2012, the Motown Motion Picture Studios were built in Pontiac. The building is no longer filming movies after being sold in 2018.

"I think the pandemic has shown us that our economy has shifted to a service sector and what we saw was that movies never stopped production," Hollier said.

If the bills are passed, it will make two levels of tax credit that would provide incentives for anything produced in Michigan. This ranges from commercials to streaming productions.

"These streaming services are looking to set up shop in places that are business-friendly and people-friendly, and Michigan provides all of that," set electrician Brian Kelly said.

Kelly has worked on major films like Transformers and Superman when they filmed in Michigan.

"This supports a lot of blue-collar jobs. A lot of us just want to be in this industry and work in our own states," he said.

Right now more than 39 states offer some type of incentive to film in their states. Michigan does not, thus putting the state at a disadvantage.

These new bills will give advantages to state-based companies who hire Michigan workers.

The bills include:

• A 25% base tax credit with an additional 5% awarded for the inclusion of a "Filmed in Michigan" logo
• A commitment from production companies to spend at least 5$0K per commercial and $300K for productions over 20 min
• A 30% tax credit for hiring Michigan residents and 20 % for non-residents

"This is opportunity. I mean we spend so much time talking about how we are going to be keeping young folks in the state. How we are going to attract and retain and make Michigan the place that people want to go and so much of that comes down to innovation," Hollier said.

Read full article at WXYZ.

From DBusiness
R.J. King March 1, 2022

Legislation introduced Monday could create a two-tiered tax credit, incentivizing state-produced commercials as well as film, television, and streaming productions. The 2017 film Transformers: The Last Knight was filmed in the city. // Courtesy of the Michigan Film Industry Association

Bicameral, bipartisan legislation introduced on Monday in the Michigan Legislature would create a two-tiered tax credit that provides incentives for state-produced commercials as well as film, television, and streaming productions.

The action comes at a time when some 39 states offer film incentives and, in turn, receive the jobs, economic boost, and related upstream, downstream, and peripheral benefits from a multi-billion-dollar industry.

From 2008 to 2015, Michigan offered generous film incentives of up to 42 percent per production, but the savings were discontinued after Gov. Rick Snyder and his team determined millions of dollars were leaving the state, largely because out-state directors, producers, and actors had no obligation to spend the money here.

“This is about Michigan jobs,” says Sen. Adam Hollier, D-Detroit. “As we witness the devastation and business losses from the pandemic, we know that attracting an industry that reinvented itself amid the crisis is a wise investment in our state’s economy and its workers.”

Sens. Hollier and Wayne Schmidt, R-Traverse City, along with Reps. Kyra Bolden, D-Southfield, and Jack O’Malley, R-Lake Ann, introduced the bills to create jobs and retain Michigan talent. The initiative positions the state as an attractive location for film, commercials, and the need for streaming content.

“Bringing the film industry back to Michigan will create more jobs and boost Michigan’s economy,” says Bolden. “Michiganders will be proud when movies made about icons like Aretha Franklin and Motown can be made right here in Detroit.”

The bills give preference to state-based companies that hire Michigan residents. Other specifics of the legislation include:

• A base tax credit starting at 25 percent for in-state spending with an additional 5 percent awarded for the inclusion of a “filmed in Michigan” logo;
• A commitment from production companies to spend at least $50,000 for a single commercial campaign or project under 20 minutes or at least $300,000 for productions over 20 minutes;
• A 30 percent tax credit for hiring Michigan residents and 20 percent for nonresidents;
• A requirement that qualified Michigan vendors provide proof of brick-and-mortar presence, have inventory, and full-time employees on staff. Pass-through companies and transactions will not qualify; and
• Accountability requirements for independent verification of approved expenditures.

“The incentives will provide direct economic benefits to Michigan communities,” says Schmidt. “Many states can attest to the fact that film incentives spur additional investment and create jobs and training programs, boost local businesses, and retain talent.”

The Senate bills, SB 862-863, now go to the Senate Economic and Small Business Development Committee with the House bills, HB 5724-5725, headed to the House Commerce and Tourism Committee.

“Film production is a manufacturing industry that depends on labor and a range of supporting goods and services to survive,” says O’Malley. “This well-crafted and competitive film incentive program will attract new industry opportunities to our state and support Michigan’s talent base and labor force.”

For more information and video segments on MiFIA’s advocacy efforts to create a film tax credit program in Michigan, visit www.mifia.org.

To become a MiFIA member or support the association’s advocacy effort, contact Lorri Rishar at lorri@edgepartnerships.com or 517-449-7435.

Watch the interview at CBS Detroit

Southfield (CBS Detroit) – Michigan once had the most lucrative film incentives in the nation in 2008 but were ended in 2015. Now, some state legislators are trying to bring a modified version back as Peter Klein, Secretary-Treasurer of Michigan Film Industry Association, talked about on CBS 62’s “Michigan Matters.”

Michigan Matters Host Carol Cain, with Peter Klein, Secretary-Treasurer of Michigan Film Industry Association

READ MORE: Crews Discover 130-Year-Old Shipwreck In Lake Superior

Klein talked with Carol Cain, Senior Producer/Host, and discussed how MIFIA has been working  with legislators who just introduced a two-tiered tax credit that provides incentives for Michigan-produced commercials as well as film, television and streaming productions.

State Sen. Adam Hollier, D-Detroit, State Sen. Wayne Schmidt, R-Traverse City, Reps. Kyra Bolden, D-Southfield, and Jack O’Malley, R-Lake Ann, are involved with the legislation. Senate Bills– SB 862-863 – is on its way to the Senate Economic and Small Business Development Committee, while House Bills, HB 5724-5725, is heading to the House Commerce and Tourism Committee.

Production filming in Michigan (Courtesy of Provided by Brian Kelly)

Klein talked how the new initiative is a slimmed down version of what was launched in 2008. For more, see  www.mifia.org.

Film production is a manufacturing industry that depends on labor and a range of supporting goods and services to survive. Many states attest that film incentives spur additional investment and create jobs and training programs that boost local businesses and retain talent. A well-crafted and competitive film incentive program will attract new industry opportunities to our state and support Michigan’s talent base and labor force.

Introduced by Senators Adam Hollier, D- Detroit, and Wayne Schmidt, R- Traverse City, along with Representatives Kyra Bolden, D- Southfield, and Jack O’Malley, R- Lake Ann, these bills were designed to create jobs and retain Michigan talent. They say this legislation comes at a time when over 39 states offer film incentives and, in turn, receive the jobs, economic boost,  and related upstream, downstream and peripheral benefits from a multi-billion-dollar industry,

“This is about Michigan jobs,” stated Sen. Hollier. “As we witness the devastation and business losses from the pandemic, we know that attracting an industry that reinvented itself amid the crisis is a wise investment in our state’s economy and its workers.”

“Bringing the film industry back to Michigan will create more jobs and boost Michigan’s economy,” said Rep. Bolden. “Michiganders will be proud when movies made about icons like Aretha Franklin and Motown can be made right here in Detroit.”  This legislation would give preference to Michigan-based companies who hire Michiganders.

Specifics of the legislation include the following:

• A base tax credit starting at 25% for in-state spending with an additional 5% awarded for the inclusion of a “filmed in Michigan” logo;
• A commitment from production companies to spend at least $50,000 for a single commercial campaign or project under 20 minutes or at least $300,000 for productions over 20 minutes;
• A 30% tax credit for hiring Michigan residents and 20% for non-residents;
• A requirement that qualified Michigan vendors provide proof of brick-and-mortar presence have inventory and full-time employees on staff. Pass-through companies and transactions will not
  qualify;
• Accountability requirements for independent verification of approved expenditures.

Senate bills SB 862-863 now go to the Senate Economic and Small Business Development Committee while House Bills HB 5724-5725 are headed to the House Commerce and Tourism Committee.

Read article at Michigan Movie WEEKENDER