Filmmakers waiting to see if lawmakers boost incentives

April 2, 2007

Legislators are weighing a measure that would offer taxpayer-funded rebates to production companies willing to make movie magic in Indiana--giving a boost to an industry that's been asking for help since 2004.

Bloomington-based filmmaker Angelo Pizzo is again urging the General Assembly to do what's necessary for Indiana to win back business that's been lost to states with more lucrative incentives.

"This is about building an industry and creating jobs," said Pizzo, whose credits include "Hoosiers" and "Rudy."

Pizzo has at least four projects pending that could be shot in Indiana if the price is right: a feature film about a family of modern-day race car drivers, a World War II-era drama set in southern Indiana, a film about the first running of the Indianapolis 500 in 1911, and a pilot for Turner Network Television.

If the rebate isn't approved, he's eyeing Illinois as an alternative location.

The Indiana Senate is reviewing a bill that would give film production companies an automatic 15-percent rebate on costs between $100,000 and $6 million. For larger projects, the Indiana Economic Development Corp. would have to approve the rebate and couldn't dole out more than $5 million per year.

Companies that make commercials, music productions or corporate videos would automatically qualify for the rebate on projects that exceed $50,000.

Backers say it's a no-brainer. Since other states started offering rich incentives in the late 1990s, Indiana's industry has been dwindling.

Though several media companies shoot TV commercials and corporate videos here, many national commercials now shoot elsewhere. And locally based companies have a hard time finding qualified subcontractors--such as camera and sound technicians--because they moved on to states with more aggressive perks and a more stable stream of work.

"We're shy on a lot of people for crews," said Thomas Zimmerman, owner of Indianapolis-based Thomas Productions Inc., which shoots commercials with budgets ranging from $20,000 to almost $200,000. "A lot of work has left the state because agencies go to out-of-town companies to produce their projects."

Employment in the field dropped from 720 in 2001 to 580 in 2005, and the Indiana Media Industry Network estimated production revenue has fallen from the $300 million range in 2003 to about half that today.

Still, not everyone is convinced a rebate is the answer. Skeptics say the 15-percent payback could easily outpace what production companies would owe in payroll and corporate taxes, giving them not only a tax-free business but an outright state subsidy.

"It's far beyond tax credits or support we've given literally any other industry," said Rep. Jeff Espich, R-Uniondale. He voted against an early version of the bill in February. "I simply didn't agree that it was appropriate to give this level of writeoffs."

Similar proposals have been made since at least 2004, but this year's bill appears to have more momentum. House members voted 83-15 to approve the bill, and a Senate committee passed it unanimously after scaling back the rebate to the current 15 percent.

If the bill passes the full Senate, legislators would have to hammer out the differences between the two versions before a final vote.

The pipeline

As the legislative process continues, details have emerged about what hangs in the balance. Pizzo's projects are the most prominent.

The largest is a $95 million, feature-length film about a family of race car drivers to be directed by David Anspaugh, who also masterminded "Hoosiers" and "Rudy." The two want to shoot at least a third of the movie here, mostly at the Indianapolis Motor Speedway.

"We really feel that location and details of place are as important a part of the film as anything else," Pizzo said. "Location is as important a character as any of our protagonists."

The duo also is pitching a television series for TNT, which Pizzo said is trying to roll out an original series every six months. Their show would follow the life of an athletic director in a fictional, Midwestern state university. Pizzo said Bloomington would be a great location.

"TNT has expressed support for our desire to shoot in Indiana," he said.

But, he said, if the rebate isn't approved, the projects' financial backers likely would move most of the production work to Illinois, where filmmakers are given a 20-percent tax credit on in-state production costs. And if the credit outpaces a company's actual tax bill, it can sell the remaining credit at a discount.

Pizzo and Anspaugh also could team for another project that's still partially under wraps, but would be set in southern Indiana during World War II.

Justin Escue, founder of Indianapolis-based My First Bike Productions, moved back to the area in the hopes of making films in and about his home--including a $3 million to $5 million movie about the first Indianapolis 500 in 1911. He wants to shoot the entire movie here, and is talking to investors as he waits for Pizzo to finish the script.

"I've been out in the world and Indiana is where I want to be," said Escue, who produced "Saving Star Wars" and "Open Mic'rs."

He said if the new film is independently funded, he'll shoot it here. If it's backed by a studio, though, the location will depend on whether Indiana adopts the rebate.

"The people with the money kind of call the shots," he said.

Other filmmakers also are eyeing Indiana as a setting, but backers are still tight-lipped about the details. They include: a $3.5 million to $4 million independent film set in Indiana and produced by Los Angeles-based Jessica Patelle-Slagle, and a $3.5 million independent production from locally based Flyaway Films LLC set in Indiana in 1946 and present day.

But Hollywood filmmaker and Terre Haute native Anthony Bruce said he'll make part of "Redefining Normal" in his hometown regardless of rebates. Bruce said he's planning five to seven days of filming there because the town's never experienced it before.

"I always wanted to make history somehow," Bruce said.

The film, a drama about Bruce's upbringing in Terre Haute and subsequent battles with drugs and mental illness, has stirred some controversy because it also covers his struggle to come to terms with being gay.

"This is not a Disney feature," he said.

More tools needed

The current legislation is not Indiana's first attempt to get in the moviemaking game. In the past, lawmakers have scaled back similar bills but ultimately made some concessions--granting a sales-tax exemption for production equipment purchases, for example, and giving the Indiana Economic Development Corp. the authority to offer limited incentive packages.

Escue's project was approved for a venture capital tax credit, which means investors could recoup 20 percent of their outlay, up to a maximum of $100,000.

"It sealed the deal with one investor particularly and gave enough of an incentive for a couple others to sign on the dotted line," he said. The additional rebate, if passed, would underwrite some of the production expenses, making Escue's project cheaper to shoot.

Without the rebate, though, Indiana's incentives still pale in comparison to what Illinois, North Carolina, Michigan, Missouri and other states are offering.

In the past two years, only five projects have applied for incentives through the IEDC and, in the end, only two films accepted them. Industry watchers say production companies drawn by automatic incentives offered elsewhere don't even bother to apply for Indiana's help.

"Indiana's short on tools in our toolbox," admitted Nate Feltman, Indiana's secretary of commerce.

Even so, backers aren't giving up. Experts say having a movie that's set and filmed in Indiana doesn't just add to the economy--it also builds a sense of place.

Brian Owens, director of the Indianapolis International Film Festival, said films based on rural Indiana and filmed on location often go beyond the stereotype of small towns and capture the beauty. But, he said, films set in Indiana but not shot here, such as the 1997 film "In & Out," often fall victim to stereotypes.

"Not being in the surroundings, it's easier to misrepresent them," he said.

Jeffrey L. Sparks, president of the local Heartland Film Festival, said filmmakers often fight to shoot on location.

"It's about being truthful in the story. Don't look to save money at the sacrifice of the story," he said.

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