With Florida film incentives drying up, industry worries about a statewide ‘Cut!’

Florida’s production industry will lobby for a new $1 billion package of subsidies to sustain movies and TV shows through 2020.

01/28/2014 6:22 PM

01/29/2014 11:50 AM

From his booth in a crowded Fontainebleau ballroom, Graham Winick faced the challenge of courting Hollywood without any state dollars to offer.

The head of Miami Beach’s film office saw a modest hunting ground in this year’s NATPE convention, a major television-industry gathering where, among other activities, some low-budget content producers pitch their offerings to distributors.

The smaller outfits included the maker of Sharknado 2, and a reality series based on Fort Lauderdale’s rock scene. Those thinner budgets have particular appeal to Winick now that Florida is winding down an incentive program that bankrolled major movie and television productions with multimillion-dollar subsidy packages.

“This is an entire industry,’’ said Winick, film and event production manager for Miami Beach. “Not everything is going to be the next Hollywood blockbuster.”

Winick’s humble ambitions at the three-day Miami Beach convention ending Wednesday reflect the new economics of digital content, where affordable, niche video is an increasingly valuable commodity.

But it also highlights the uphill battle Winick says he and film offices across Florida face if Tallahassee doesn’t decide to extend a $296 million pot of production incentives that is essentially out of money. Launched in 2010, it reimburses productions up to 30 percent of their in-state expenditures. Florida’s film industry is lobbying for a new $1 billion subsidy fund that would expire in 2020.

The push will be closely watched in South Florida, which last year accounted for 78 cents of every dollar in production subsidies issued by the state Office of Film and Entertainment.

Telenovelas produced by Univision and Telemundo have tapped into the state program to offset production costs for shows that otherwise could be filmed in Mexico, another popular hub for Latin soap operas.

And local film officials say they’ll need more incentives to retain a handful of television series with their eyes on South Florida, including a Miami-based cable show starring Paul Giamatti and a Netflix online series set to film in both Homestead and Islamorada.

“If the session comes and goes and we don’t get any money, I’m pretty sure these projects have plans to go other places,’’ said Sandy Lighterman, film commissioner for Miami-Dade County. “There is zero money left.”

On Wednesday, Gov. Rick Scott released a $74 billion budget that mentions no boost for film subsidies.

The budget category of business development, which includes the film office, tourism marketing, expansion grants for businesses, and global marketing of Florida, would get an additional $83 million under Scott’s proposed budget but there is no line item for more film subsidies. Winick noted that since the subsidies are paid out as tax credits, they don’t show up on the governor’s budget. “This isn’t an indication one way or the other,’’ Winick wrote in an email.

Last year, when the existing incentive pool was running low, production lobbyists failed to win backing for more subsidies in Tallahassee. Approved by lawmakers in 2010, the tax credits are sold at a discount by productions to large in-state taxpayers.

Those taxpayers then use the credits to reduce their tax bills dollar-for-dollar, so the proposed incentives would mean a loss of $1 billion in revenue to Florida over five years. A 2013 study by the Motion Picture Association of America found that Florida’s incentive program generated $3.7 billion for the state in wages and production expenditures, from accountant salaries to utility bills. But critics call that dramatic license.

A 2011 study by the Massachusetts Department of Revenue found that for every dollar of tax credit issued to productions between 2006 and 2010, the state saw only 13 cents of new revenue. Florida’s film office noted in its annual report that while every dollar of incentive money came with $15 in spending, it also noted that every dollar of subsidy payouts by the state only yielded 40 cents of tax revenue.

“The best evidence shows that film incentives cost the treasury more than they recoup from taxes,’’ the Washington, D.C.-based Tax Foundation wrote in a report last year.

The pushback on extending Florida’s incentive program is being noticed in Hollywood, film officers said. “I was in Sundance,’’ Miami-Dade’s Lighterman said of the famous Utah film festival. “What’s the first thing I’m asked? How many incentives are left?”

New productions can still qualify for the subsidies, but only if existing ones give up their claims and free up incentive dollars for the next applicant in line. The backlog served as a silver lining to South Florida’s loss last year of three canceled cables series: USA’s Burn Notice, A&E’s The Glades, and Starz’s Magic City collectively qualified for about $14 million in givebacks from Florida each season, and that money was quickly claimed by other producers looking for help.

Lighterman said the freed-up money meant green lights for a string of notable South Florida productions. Mark Wahlberg and Dwayne “The Rock” Johnson picked Miami to film a pilot for an HBO series called Ballers about a group of professional athletes living in Miami. Netflix is using Homestead as a home base for a 13-episode series based in the Keys that stars Kyle Chandler, an actor probably best known as the coach on Friday Night Lights.

Giamatti would take the lead role in Hoke, an FX series based on novels set in 1980s Miami. While the Hoke and Ballers pilots secured tax incentives, Lighterman said Florida probably won’t have any money left should FX opt to order a full series.

“There is zero money left, unless somebody falls out of line,’’ she said.

Incentives could provide a crucial boost for a city-owned production facility being planned by Miami.

The city’s Omni Community Redevelopment Agency used property taxes to buy a $3 million warehouse at 50 NW 14th St. and plans on turning over the site and a $10 million construction rebate to a private company negotiating to build and operate a studio there. The company, EUE/Screen Gems, which runs studios in incentive-rich Georgia and North Carolina, submitted a $2.6 million budget to the CRA based on two prime-time cable series each filming 18 episodes in the facility during a single year.

Pieter Bockweg, director of the CRA, said he’s confident EUE/Screen Gems can make the Miami Entertainment Complex viable. “I think that the demand to come to Florida and Miami-Dade to shoot movies is high,’’ he said. “Do we think the industry is more attracted to come to Florida with incentive dollars? There is no doubt about it.”

The prospect of an empty pool of film incentives has production executives considering other options. At NATPE, some of the production outfits were small enough that government help didn’t factor into their budgets. Payouts can be delayed for months or even years as state officials audit a production’s Florida expenditures, and the paperwork requirements can turn-off smaller operations already counting on pared-down costs.

“We have shot in Florida before, but I don’t think we have ever taken advantage of the incentives,’’ said David Rimawi, a partner at The Asylum. The Burbank-based production house responsible for SyFy’s viral hit Sharknado and the less celebrated Atlantic Rim, a knock-off of the monster hit Pacific Rim that was shot on Florida’s Gulf Coast last year. “We obviously operate in the lower-budget realm.”

At a nearby booth, a burly producer named Gerald “G.B.” Baumann had his rock-and-roll patter ready for passersby. “Are you the one bringing the coke?” he asked a visitor. Baumann’s pitch: a show based on his Fort Lauderdale record label, World Records.

It would be set in Florida, and Baumann is trying to sell the concept to a financial backer willing to fund the production costs. Incentives, Baumann said, aren’t part of the equation.

“I haven’t even thought about that,’’ he said. “We’re hoping it will pay for itself.”

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