Forum explores how to cash in on Michigan Film Incentive

By Terry Oparka
C & G Staff Writer

TROY — Employee layoffs loomed as a real possibility for Duane Swanson, director of operations for the Somerset Inn in Troy last year. “The budget forecast was down,” he said. “We needed a miracle.”

He got four.

Four feature film production companies have stayed at the hotel since Michigan lawmakers approved the Michigan Film Incentive, which grants up to 40-percent tax incentives for approved film production companies to film in Michigan.

“We got out of the hole by the end of August,” he said. “The production companies also rented office space nearby and spent money and time at the Somerset Collection. If you want the perfect hotel guest, they are it. They are nice people.”

Ken Klussman, agency operator for the rental car company, Budget of Birmingham, tells a similar story. “We were challenged by our corporate office to turn our business around. Then Warner Brothers called us and asked if we were interested in getting involved with the film industry.”

When Clint Eastwood’s “Gran Torino” Production Co. came to the Detroit area this past summer, Budget put together what the crew needed — 90 cars and a number of trucks — within a week.

“We increased business by 81 percent,” he said.

Klussman, Swanson, film industry insiders and others shared stories and suggestions during “Oakland County on Film,” sponsored by Oakland County and held at the Somerset Inn Oct. 28.

“We must be aggressive,” said Anthony Wenson, CEO for the Michigan Film Office. “The key thing we’re trying to develop is jobs.”

His office is working to bring people qualified to teach skills needed by film crews that typically consist of 90 to 100 people. He said 70 film production crews would come to the state in upcoming months.

According to estimates by the Association of Film Commissioners International obtained from the Michigan Film Office, location spending on a feature film could range from $30,000 a day for low-budget independent films to $260,000 a day for high-budget studio feature films, based on paying a full crew union-scale wages.

Location spending for commercials could range from $25,000 to $150,000 a day, and movies for television location spending could range from $35,000 to $125,000 a day.

The tax break is also available to interactive game developers, an industry with a 17 percent yearly growth rate, Wenson said.

Harvey Grace, chairman of Grace and Wild Studios in Farmington Hills said his operation, which includes a 15,000-square-foot soundstage, is “probably the largest studio between Los Angeles and New York.”

He blasted lawmakers who want to cap the tax breaks to $50 million annually. “The movie infrastructure is not here,” he said, adding that talk of the cap has squelched potential development. He said he was planning to expand his studio on an additional 100 acres in Oakland County, but his plans are on hold until talk of the cap “dies down.” 

Location scout Tom Jacob has worked on commercials for General Motors, Ford Motor Co. and Nike. He urged city leaders to designate a point person to expedite the process needed to secure permits for permission to film at locales in municipalities. 

“We need information very quickly,” he said. He urged municipal and business leaders to have standardized fees in place and to avoid price gouging the production companies.

David Rumble, location manager, agreed. He’s worked on “8 Mile” and “Spider-Man 3.” Ideally, city staff should be accessible 24/7 for the film industry, he said. “An actor can get sick, the weather changes, and shooting goes over budget — all can affect the shooting schedule.” 

Pam Antil, assistant city manager for Novi, said that Novi approves the permits requested by production companies as temporary special use permits that do not need council or planning commission approval. Novi has processed requests in 36 hours. The production company for the film “Demoted” recently shot at the municipal ball fields in that city.

Ed Anzek, director of planning and development for Rochester Hills, serves as film liaison for Rochester Hills and the city of Rochester. He said he developed the Rochester Area Film Office Web site as a way to be “film-friendly,” which includes photographs of sites in the Rochester area. 

 The city of Troy plans to update its Web site to make things easier for the film industry, said Community Affairs Director Cindy Stewart. “We’ve received a number of calls,” she said. During the shooting of “Gran Torino,” the production company needed a mat for an action scene being shot in Hamtramck — fast.

So Stewart and other city staffers got busy and sent the production assistants to Toby Buechner at Troy Gymnastics. “They said that Mr. Eastwood wanted to rent some mats, and I let them borrow them for free,” Buechner said. He added that Eastwood’s daughter took some gymnastics classes at Troy Gymnastics this past summer. 

State Sen. Nancy Cassis, chair of the state finance committee, acknowledged that the film companies do provide some local businesses and municipalities with a “quick shot in the arm” but she said the jobs were transitory and not stable. She said the film tax credits would cost the state $122 million this year out of its general fund. 

Cassis supports House Bill 1455, which would cap the refunds issued to film production companies to $50 million overall annually, but still allow companies to erase tax liability. She explained that the way the film tax credits currently work, state-approved production companies may have all their tax liability wiped out and also get additional refund checks from the state.

“I’m not against the credit,” she explained. “I opposed the refundable part. We are robbing Peter to pay Paul. In every state where refunds for film credits are given, they never come close to paying for themselves. As long as we have the highest giveaways, they may continue to come. It’s only a matter of time before somebody outbids us. They will go wherever the best offer is.” 

Later this month, the Engineering Society of Detroit will host a presentation by Bob Brown, co-founder and partner of a Michigan-based feature film production company Purple Rose films with actor Jeff Daniels, about opportunities available as a result of the film tax credit. The event will be held 7:30-9:30 a.m. Nov. 19 at ESD Headquarters, 20700 Civic Center Drive, Suite 450, in Southfield.

Tickets are $50 for non-ESD members and $25 for ESD members. Call (248) 353-0735 or visit www.esd.org to register for the event.

You can reach Staff Writer Terry Oparka at toparka@candgnews.com or at (586) 498-1054.