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Florida's entertainment industry fights for flailing tax-incentive program

Rob Corddry and Dwayne Johnson in a scene from HBO’s new series “Ballers,” which was shot entirely in Miami.
Rob Corddry and Dwayne Johnson in a scene from HBO’s new series “Ballers,” which was shot entirely in Miami. HBO

When more than two million people tuned in last week to watch the new HBO show Ballers — a darkly comical drama starring Dwayne “The Rock” Johnson about retired NFL players — South Florida once again took center stage on TV screens around the world as a glitzy, sprawling playground with a propensity for crazy, only-in-Miami stories.

But the series may also be the last in the foreseeable future to double as a worldwide billboard for Florida, the way Miami Vice did in the 1980s. Earlier this month, Florida legislators voted not to inject a requested $10-$20 million into the state film-and-entertainment tax incentive, which has run out of funds. A new incentive program may be considered in 2016.

Legislators also voted to cut in half the staff of the Florida Office of Film and Entertainment. Insiders worry that that move may signal waning interest in using state funds to continue luring out-of-state productions to Florida. As production dwindles, existing media content providers and technical crew appear to be relocating — further eroding the region’s ability to compete.

At least three recent high-profile Hollywood studio productions opted to shoot mostly exteriors in South Florida, then fled to other states to complete filming, according to Graham Winick, film and event production manager for the city of Miami Beach and former president of Film Florida, a nonprofit group that assists the film, TV, commercial and media industries. Those included Ride Along 2, starring Kevin Hart and Ice Cube; Arms and the Dudes, with Jonah Hill and Miles Teller; and Alvin and the Chipmunks: The Road Chip, the fourth installment in the popular family film franchise.

“We got two weeks instead of two months with those movies,” said Winick. “We lost the [upcoming TV series] Rosewood from Fox [starring Morris Chestnut as a Miami pathologist] to L.A. We lost an NBC show called The Fuentes Sisters that is going to Puerto Rico now. The Cocaine Cowboys series is finally proceeding with TNT, but it could also go to Puerto Rico. Bloodline [the Netflix series set in the Keys] is coming back for season two, but this industry we’ve been building for 40 years is going to go away unless we do something now.”

In 2006, Florida was ranked third in the U.S. — after California and New York — in the number of film productions shot in-state. That was thanks to a slew of big-budget films made here in the 1990s, including True Lies, There’s Something About Mary, The Birdcage and Bad Boys. But after studios started heading to other countries with favorable exchange rates, such as Canada, states began offering incentives to lure them back. In the arsenal were tax credits, rebates, grants and sales-tax exemptions.

Florida joined the fray in 2010, allotting nearly $300 million for film, TV and video production in tax credits that were redeemable only after production had wrapped. Sixty percent of the cast and crew of any given production also were required to come from Florida.

The program was supposed to last five years, but there were so many takers that the funds were tapped out in three. Still, hits such as Dolphin’s Tale, Burn Notice, Spring Breakers and Pain and Gain provided steady job opportunities throughout the state.

Despite the success, many states downsized or eliminated their incentive programs altogether. In 2014, an attempt to replenish the incentive’s funds was denied by both the Florida Senate and the House. Following this month’s failure once again to revitalize the program, proponents must now wait until 2016.

It’s impossible to know how many productions have turned elsewhere or to calculate the financial loss. But the 1950s-era crime drama Magic City shot in Miami for two seasons gives a clue. Said series creator Mitch Glazer, “In the two years we spent shooting the TV series there, we spent over $100 million [including converting the former Bertram Yacht factory into a working studio] and hired 300 cast and crew members, most of them local.

“We didn’t spend a dollar outside South Florida. If it hadn’t been for the incentive, we would have just grabbed a week of exteriors and shot elsewhere.”

Glazer, a Miami native, is now preparing to direct a feature film based on the series.

“We are filming in Miami in spite of Florida’s efforts,” he said. “My financiers were pushing me to film in Louisiana or Georgia or Puerto Rico, and the movie would have been done last month and we would be editing. But Miami represents the glamor of the city that I want to write about. In this case, I couldn’t just go where the incentives were.”

Glazer says the Magic City movie will reunite the show’s original cast and throw in Bill Murray (as the head of the CIA) and Bruce Willis (as a Chicago mobster). But although Magic City is now viewable by 70 million people around the world via Netflix, the state wouldn’t budge when it came to a tax break.

Rolando Aedo, the executive vice president and chief marketing officer for the Greater Miami Convention and Visitors Bureau, admits that part of the difficulty in convincing legislators of the value of tax incentives is that the residual benefits to the state are hard to pinpoint.

The producers of 2012’s Rock of Ages, a film adaptation of the Broadway hit starring Tom Cruise, settled on South Florida to stand in for 1980s L.A., in large part due to the $8 million tax rebate granted by the state. But it’s difficult to say exactly how much of the film’s $75 million budget was spent on local services ranging from dry-cleaning to lumber yards to Publix and Costco runs.

“The main hurdle for the tax incentive is that you are dealing with a generally conservative Legislature — both Democrat and Republican — that is philosophically opposed to incentives,” Aedo said. “When they receive a report on the return on their investments under the current program, those numbers don’t include intangibles such as tourism.”

Nor does it take into account the value of perception. After Time magazine ran the infamous “Paradise Lost” cover about Florida in 1981, civic leaders faced the daunting job of first fixing the region’s problems and then repairing its image — an effort that would have cost millions. Miami Vice, which premiered in 1984, created the fix — and brought production dollars into the community, as well.

The show “made us look cooler than we were at that time. We grew into that image,” said Aedo. “The classic scene set to Phil Collins’ In the Air Tonight was a quintessential moment. South Beach went from being God’s waiting room to the epicenter of cool and hip. Film and TV production really is that powerful. And it’s not tourism, either. It can also lure other businesses.”

The loss of tax incentives also impacts local companies. Luis Silberwasser, president of Telemundo Network, the largest producer of Spanish-language prime-time TV content in the U.S., expressed disappointment at the decision not to extend the tax-incentive fund. Currently, Miami is home to ten Telemundo studio facilities and employs 800.

“As the largest producer of Spanish-language prime-time content in the U.S., the film incentive plays a critical role in our short- and long-term decisions,” he said. “Not having a multi-year incentive directly affects our cost of doing business and puts us at a competitive disadvantage. Florida is positioned to be one of the leading production centers in the world, and funding the film incentive would have created thousands of new jobs for Floridians.”

Pieter A. Bockweg, executive director of the Omni-Midtown Community Redevelopment Agency, is gambling on that growth. Due to open this fall is the Florida Film & TV Center at 50 NW 14th St., a 70,000-square-foot studio facility with two massive sound stages, as well as extensive office space and editing suites. Bockweg hopes to help further the revitalization of the slum-blighted Omni district by creating jobs and incentivizing area businesses to work with productions that make use of the studio.

But Bockweg also says that the studio, which cost $14.5 million (paid for primarily by city and county tax funds), will also be an economic boon for the state — and the state tax incentive will play a critical role. The company hired to operate it, EUE/Screen Gems, runs similar facilities in Georgia and North Carolina.

“Tax incentives are an integral part of attracting film and TV and any other form of entertainment to come to Florida,” Bockweg said. “I look at them as one piece of a pie. You need talent, you need locations, you need facilities, you need tax incentives. This building is not just for the city of Miami. It impacts the entire state.”

The Florida Film & TV Center may help stem the growing trend of filmmakers, actors and crews abandoning Florida, lured by steady work in states with more generous tax incentives, such as Georgia (where Captain America: Civil War is being shot) or Louisiana (which spent a whopping $251 million on film tax credits in 2013).

Lucas Leyva, a co-founder of the Borscht Film Festival and tireless proponent of growing and nurturing the Miami filmmaking scene, says the battle is getting harder. After filming a series of short Web episodes about only-in-Miami stories called No Seasons for MTV’s online channel MTVOther, he and co-creator Jillian Mayer are developing a TV version of the show for the network. They are also in talks with Time-Warner to shoot a pilot for another series, titled Fanimaltastic!

“We fight so hard to make everything we do in Miami, and it’s hard to tell these corporations to pay 30 percent more in order to shoot it in Florida,” said Leyva. “It’s hard enough to convince people that making things in Miami is worth it … If we went to California, we would be saving a lot of money.”

With the incentives gone, experienced crew members are moving away, says Leyva. Miami-born actor Carlos Gomez, who appeared in all four seasons of A&E’s crime-drama The Glades shot in South Florida from 2010-2013, sees the same.

“When we shot The Glades, a lot of the people who worked on that show had also worked on Miami Vice. We employed over 150 local people daily, and the show was a big hit overseas,” he said. “When the tax incentive started, everyone wanted to shoot there. But now everyone is leaving. It’s a shame. It feels like they’d rather build another 40-story condo than to grow the film industry.”

Despite the bleak outlook, supporters of the tax incentive aren’t giving up. They plan to introduce a revamped version in the 2016 legislative session that gives an edge to the television and video-game industries, because they have the biggest and most stable employment ratio.

If the Legislature acts when it reconvenes in January, the state would be in line for the February 2016 pilot season, when production companies start to shoot the first episodes of shows they hope to sell to networks as series.

Michelle Hillery, the current president of Film Florida, says she plans to discuss the “urgent measures” needed to preserve the incentive program during the group’s annual meeting, which runs through Tuesday in St. Augustine.

“We all need to visit our legislators in their home offices over the summer months and let them know what they must do to protect this important industry, or it will be too late to save,” she stated via the group’s email newsletter. “This has never been about a handout to Hollywood productions — it’s about supporting the hard-working Floridians and businesses who have made Florida their home.”

Sandy Lighterman, commissioner of the Miami-Dade Office of Film & Entertainment, says she is cautiously hopeful.

“If the incentive goes away, TV series like Ballers would move out-of-state,” she said. “If we want this industry in this state, we have to stay in the game. It’s just like the airline industry or the orange juice industry. The only difference is that it is a factory of content creation. And we will continue to make noise until the last person leaves.”

Rebate programs across the nation

Here are five of the most popular film and entertainment tax-credit/rebate programs across the U.S., based on total expenditure of individual production (figures used are from 2014):

▪ Georgia: Up to 30 percent of total in-state expenditures, no limits or caps.

▪ New York: Up to 30 percent, along with 30 percent for “stand-alone” (i.e. films and TV shows not shot in the state) post-production costs such as editing or sound-mixing.

▪ Louisiana: Up to 35 percent credits (including actor salaries), on the condition the total cost of production is greater than $300,000.

▪ California: Between 20-25 percent, depending on size of production budget.

▪ New Mexico: Between 25-30 percent, along with 25 percent for stand-alone post-production costs.

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