Michigan near $80M deal for three film, TV studios

Saturday, January 3, 2009
Michigan near $80M deal for three film, TV studios
Officials tout economic boon if entertainment industries set up shop in southeast Michigan.
Louis Aguilar / The Detroit News

State film officials say they are on the verge of sealing an $80 million development deal that would create three film and television production studios in southeast Michigan, boosting one of the state's few fast-growing industries.

Two of the potential locations for the permanent studios -- including one in Detroit -- haven't been used in years, while the third site would have to be built. One of the facilities would be a multi-studio complex that would occupy up to 130 acres, state officials confirmed. Another facility would be geared toward post-production work, such as audio and editing.

The Detroit facility, if the deal is finalized, could be in operation by the end of the year.

Film officials say they won't reveal details about the proposed facilities until an official announcement is made, perhaps in February.

"It's a game-changer," said Anthony Wenson, CEO of the Michigan Film Office, the agency that promotes the local film industry. "We truly (will) have a year-round industry. We can see a television series shot here. We can provide space for filmmakers to build large-scale sets. We can greatly expand our offerings to the video and digital media community."

The state film agency has been working on the deal for months and contends it would create the infrastructure to support what has become a $100 million industry in the nine months since Michigan passed the most aggressive film industry tax incentives in the nation.

Even though films and TV productions are being shot in Michigan locales, almost all of it is outside work that shuts down during winter months. Interior studio shots and all post-production work leaves the state, meaning Michigan misses out on the largest opportunities for work.

Pacts being finalized

Wenson says the groups behind the studio projects are a mix of private investors and "a major operator of large-scale studio facilities." Wenson said the studio operator is not a specific film studio -- such as Walt Disney -- but rather a third-party owner that would allow major studios and independent producers to use the sites.

"We're finalizing the agreements," Wenson said. "It's not an issue of whether there will be financing for the deals. These are complex deals involving lots of parties and that is what we are working through."

A Detroit official said she wasn't aware of any major pending deal regarding a film facility.

"It's premature to really discuss the situation," said Stephanie Milledge, executive assistant to Mayor Kenneth Cockrel Jr. She also has overseen the Detroit Film Office since Cockrel took office late last year following the resignation of Mayor Kwame Kilpatrick. "It looks promising that the city will have such facilities soon. There are several discussions going on," she said.

Since the April 2007 passage of the tax incentives, 25 films have been produced in Michigan -- compared to just six to the year prior to the incentives. One of them is in theaters now -- Clint Eastwood's well-received "Gran Torino." A total of 70 projects have been approved by the state. Since April, the film industry has created $100 million in revenue. In 2007, before the incentives, the film industry generated $4 million in economic activity.

The incentives give producers 40 cents back for every $1 they spend on production, double the former rebate, and an additional 2 percent rebate if the project is shot in certain Michigan communities. The new law also gives a 25 percent tax credit to companies investing in new film and digital media studios -- something that would apply to the new studios. Another incentive covers 50 percent of on-the-job training expenses for state residents working as crew members.

The bulk of the tax incentives has yet to be paid out to producers, but it's estimated the total amount of rebates for 2008 will range from $30 million to $40 million, Wenson said.

Some opposition mounts

Despite the increased activity, some state lawmakers say that economically battered Michigan can't afford to be so generous to the film and television industry.

"It will be one of the most important issues of 2009," said state Sen. Nancy Cassis, R-Novi, one of the legislators who aim to cap the film industry tax credits at $50 million a year.

"We are expected to have a $500 million to $1 billion deficit. Something must be done. We are absolutely bleeding our general fund to give incentives to the movie industry," she said.

But several filmmakers say the prospect of three new production studios demonstrates the growth potential of the TV and film industry in Michigan.

"The most important reason to create this kind of infrastructure is that it brings jobs, jobs, jobs," said Hopwood DePree, CEO and founder of TicTock Studios in Holland.

"If you have permanent space, then you have permanent spin-off business, ranging from hotels, restaurants, caterers, auto rentals, office space, florists, construction; you can go down the line. That doesn't include the technical jobs involved in the actual production."

Film supporters such as DePree say they will fight to keep the tax incentives.

"Now more than ever we need to diversify our economy. We need to create jobs. Why go back to the situation when the state saw very little revenue from this industry?"

You can reach Louis Aguilar at (313) 222-2760 or laguilar@detnews.com

More power to them if it works, but it seems like Hollywood has a monopoly going. How can Michigan film year round? If you want to have a summer-type thing going on you can't do that in February in Michigan. Hollywood can run over to the beaches any time and simulate summer. Hollywood is close to winter weather and mountains, too.

I guess the state folks are relying on tax breaks and lower production costs here. Having Jeff Daniels as a spokesperson can't hurt either!

Too bad they can't use the train depot anymore


But the building is too much of a hazard

gs78 wrote:

Too bad they can't use the train depot anymore


But the building is too much of a hazard

It could be used in some horror movies!

I will believe when I see it