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WV movie industry: Cutting Film Office, tax credit would harm state

By DOUGLAS IMBROGNO

Charleston Gazette-Mail

CHARLESTON, W.Va. — Supporters might view it as serendipity that the West Virginia Film Office is hosting a free “Business of Film” workshop today at the West Virginia State University EDC center on Charleston’s West Side.

That’s because backers of the Film Office and its film tax credit program — targeted for elimination in Gov. Jim Justice’s first budget — make the argument that the office is a revenue and jobs creation program, not just an artistic frill for the state of West Virginia.

Mo Brings Plenty is featured as Sitting Bull, on location at the Essroc cement plant grounds in Martinsburg, one of six mini-series shot in the area by Stephen David Entertainment.
(Submitted photo)

“The governor removing the tax credit program would be a huge loss to the state,” said Laura Gassler, executive director of the Berkeley County Convention and Visitors Bureau. “So many other states have gotten rid of the tax credit program, and their filming has dried up completely.”

This week, the Film Office released its 2016 annual report on the state Legislature’s website, which states that the office is “a recognized sector of the manufacturing industry” in West Virginia, producing a growing stream of jobs and revenue.

The report states that since its enactment in July 2007 through December 2016, the Film Investment Tax Credit program has “spurred a large increase in business prospects that have spent more than $54 million in direct in-state expenditures, including wages, construction, fuel, transportation, airfare, lodging, heavy equipment rental and more.”

In return, according to the latest figures available, production companies received a total of $13,258,000 in tax credits, meaning that much less in taxes was paid into the state treasury, according to a 2013-14 report on the Film Industry Investment Act (the name of the bill creating the tax credits).

The direct expenditure of $54 million by production companies has benefited thousands of businesses and hundreds of workers employed in the state, according to Film Office reports.

Other numbers speak to the spread and impact of film production in the state since the Film Office’s inception in 1994.

Film productions have been a boon to Berkeley County, Gassler said. With Film Office and film tax credit assistance, the county has lured a series of high-profile cable shoots to the area.

Since fall 2012, the New York-based company Stephen David Entertainment has filmed six miniseries in West Virginia’s Eastern Panhandle. These include: “The American West,” for AMC; “NASCAR: The Rise of American Speed,” for CMT; “The Men Who Built America,” for the History Channel, which was nominated for five Emmy Awards and won two for Outstanding Documentary and Outstanding Cinematography; “The World Wars,” for History, which was nominated for three Emmys; “American Genius,” for National Geographic; and “The Making of the Mob: New York,” for AMC.

Gassler has kept an eye on the economic impact on her county.

“For those productions, we’re looking at around 10,000 hotel room nights,” said Gassler, who calls hotels to track what she calls that “heads in beds” number.

In addition, the productions have hired locals as crew members and extras, bought props and materials, eaten in local restaurants and rented out area locations, including Prickett’s Fort State Park, in Marion County, for “The American West.”

The production company also created a soundstage inside the Eastern West Virginia Regional Airport, in Martinsburg, while transforming the grounds of the Essroc cement plant in Martinsburg into a teepee-dotted encampment for Sitting Bull and his fellow tribe members as part of the series.

“All of that is getting the community involved,” Gassler said, “and since the production company is in New York, all of that is putting outside money into the local West Virginia community and economy.”

She and her assistant director, Mark Jordan, have made the trek the past two years to the 10-day American Film Market industry show in Santa Monica, California, to seek out other film shoots.

“When we’re manning the booth, the first question that anybody comes up and says is, ‘What are your incentives?’ ” Gassler said.

“As a result of that show in November, we’ve already made contact with quite a few people. And, in Berkeley County already, we’re looking at four potential shows to be filmed in 2017,” she said. “They’re all expecting to receive the tax credits.”

Justice has proposed eliminating all $341,000 of the Film Office budget, along with canceling the Film Investment Tax Credit program. The program offers up to $5 million in annual tax credits to production companies to encourage them to film in West Virginia, which is relatively low compared to states that offer them (some of which have no caps on such credits).

A production company can earn a tax credit of 27 percent if it spends at least $25,000 in West Virginia. The credit goes up to 31 percent if the company hires 10 or more West Virginia residents as crew or talent during a shoot, a measure intended to help grow film production talent in the state.

A production company can then turn around and sell the tax credit to a West Virginia business or individual wishing to reduce their corporate or individual tax burdens.

Pam Haynes, head of the Film Office referred all questions to the Commerce Department, under which the Film Office falls. A call to Commerce Secretary Woody Thrasher was referred to a public relations staffer who had not yet responded to several requests for comment at press time.

Without the tax credits in place, a recent six-program series of shoots by Motion Masters of Dunbar for the Fido TV cable channel would have gone elsewhere, the network’s founder, Tad Walden, said.

“Oh, it’s absolutely essential,” Walden said of the film credits.

Walden founded the 24/7 network, devoted to “all dogs, all day,” three years ago in Colorado. As an Elkview native who graduated from Marshall University, he has tried to direct film shoots and their spin-off benefits back to his home state.

That would be a lot harder to do, he said, if the Film Office and its film tax credits were to disappear.

“I had a call the week before with a couple other networks,” said Walden. “We’re all in the same boat when making decisions on where to actually film content. It’s just incredibly important today to make sure we can maximize the most of our production dollars.

“There are just so many options out there for states — and, for that matter, countries — where we can shift these dollars,” said Walden, citing Canada and its generous film tax credit program as an attractive locale for film production.

“There are talented production companies everywhere,” he said. “What we have to do is make sure those production companies can operate in a locale where we can take advantage of the credits.”

West Virginia’s budget problem is “not something that is foreign to me,” Walden said. “But I don’t understand the leadership on what they’re thinking here.”

He said he thinks that, sometimes, people are hearing the phrase “tax credit” and thinking it means “tax cut.”

“That’s not what this is,” Walden said. “I think they need to look at it as priming the pump a little bit. It’s a tax incentive, is what it is — to bring dollars in.”

And there are ever more dollars to be had, given the rapidly changing face of film and TV production, he said.

“Netflix alone is going to be spending $6 billion — with a ‘B’ — on content this year. Amazon is putting $100 million into original content alone, in the third quarter,” Walden said. “I guarantee you, none of those dollars are going into West Virginia unless they have a chance for these tax credits.”

Film productions also keep West Virginia businesses and film crew members busy, if not afloat, said Diana Sole Walko, president of Motion Masters.

Her company is finishing up editing on six shows for Fido-TV on picking a purebred dog, part of a series called “Which Woof’s For You?” That series is slated to air starting in March.

“We were able to win that contract, in part, because we were able to take advantage of the film investment tax credit,” Walko said. “The fact is, our economy is in shambles, and my company is just one of many [that] has suffered in this continued economic spiral.”

Without the Fido TV work, Motion Masters would be hard pressed, she said. Motion Masters shot six other episodes for Fido-TV’s first season of shows in 2016.

“There are some months where all we have done is that television show for Fido TV,” she said. “I am not going to be able to replace that volume of work with the business that’s available here.”

If businesses in West Virginia lose the tax credit and lose the Film Office, Walko said, “you are going to see the demise of an industry that brings millions of dollars annually to West Virginia, an industry that employs creatives all over the state.”

The Film Office has trained more than 300 people in various skill sets, ranging from grips and gaffers, to costume set dressers, to production office coordinators and production assistants, to location scouts, according to the office’s 2016 report. The report notes that 375 “skilled laborers” are listed in the Film Office’s online workforce directory.

Gassler, of the Berkeley County Convention and Visitor’s Bureau, said the Film Office and film tax credit are best seen as two separate, equally weighted issues for film production in West Virginia.

“The Film Office and personnel are just as, if not more, important than the tax credit program,” she said. “Many [producers] film in West Virginia who never apply for the tax credits. The reasons may be that they don’t want to bother with the paperwork or that their production doesn’t meet the minimum of $25,000. But they need guidance on locations, hotels, crew members and other things having to do with filming. There needs to be someone that helps them navigate West Virginia.”

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