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City entertainment industry hooked on state tax break


AARON ELSTEIN

Back in 2004, New York debuted a $25 million tax credit for TV shows and movies produced on soundstages in the state. The program has since morphed into a $420 million incentive that’s the largest in the nation and one the industry says it can’t live without.

“The tax credit is the engine that moves the machine,” John Battista, Executive Vice President of York Studios in the Bronx said Tuesday at Crain’sEntertainment Summit.

The President of Kaufman Astoria Studios, Hal Rosenbluth, echoed that sentiment, pointing to industry estimates that up to 80% of film and TV productions would leave the city if the tax break were done away with—something the legislature threatens to do from time to time.

“This industry will only be as successful as political leaders will allow it to be,” Rosenbluth said.

Indeed, the tax credit is so popular that this year’s allocation was used up by April 2017, according to the Citizens Budget Commission, which calculated the program cost the state $4.5 billion since inception. The commission, along with the Empire Center for Public Policy, has long opposed the credit on the grounds that the costs aren’t commensurate with the rewards. Even actress Cynthia Nixon said she opposed the tax break during her campaign for governor.

But the booming movie biz clearly has economic upside. The Empire State Development Corp. reports that film and TV productions have spent some $22.7 billion and enlisted 1.4 million new hires since 2011. A report for the state by consulting firm Camoin Associates found that the tax credit itself helped generate 34,000 “direct” jobs across and about the same number of indirect ones in 2017 alone.

The credit offers producers refunds for up to 30% on all “below the line” costs, such as salaries for set-builders and sound engineers. Costs for hiring actors, screenwriters or directors aren’t eligible. A typical show or movie can save 18% on production expenditures under the program, which ensures a steady stream of work for the likes of Kaufman Astoria Studios, Silvercup Studios and Steiner Studios.

Understandably, these companies are keen on keeping the tax break going. But they’re not the only interested parties. Teamsters Local 817, which represents behind-the-camera workers including drivers, location workers and casting professionals, is also a big supporter. So is the de Blasio administration. Indeed, so many films and shows are being shot on the streets of New York at any given time that the Mayor’s Office of Media and Entertainment limits how often the most popular neighborhoods can be used for film shoots, Commissioner Julie Menin said Tuesday.

Perhaps most importantly, Gov. Andrew Cuomo is a big champion of the film and TV tax credit, which he sees as an economic development tool for upstate. The tax break was most recently extended by the legislature in 2017 and is set to run until 2022.

Edward C. Greenberg 2 days ago

As of 6/18 here’s how Andy’s venture with our money to spur movie/TV production in upstate NY worked out.

Onondaga County officials took possession of the state’s Central New York Film Hub with the expectation that the state will provide $1.7 million to pay for its operation and capital improvements. The Film Hub has been largely unused since and is often empty. The state sold it to the county for 1$ (not a misprint) County officials say part of the arrangement is for the state to provide another $1.5 million to make capital improvements to the facility and $200,000 to cover the film hub’s operating costs for the next two years.

Built in 2014/15 with taxpayer money, the $14 million facility has thus far not produced jobs as promised. County Executive Joanie Mahoney established a nonprofit entity, the Greater Syracuse Soundstage Development Corp., to own and operate the facility. The corporation will NOT be supported by county tax dollars. Instead, county officials are counting on $200,000 from Empire State Development, the state economic development agency, to pay for heat, lights, maintenance and other costs for at least the next two years, Mahoney said. “After that, the facility should be able to sustain itself from fees it charges for use of the soundstage” she said.

The facility nor the location has attracted filmmakers or television production. The other $1.5 million sought from the state would be used for a variety of capital improvements to make the facility more user-friendly to filmmakers. “The additional 1.5 million could help pay for technology to support film editing and other post production work, to enhance the soundstage, or similar purposes”, Fisher said. The facility will be rebranded the Greater Syracuse Soundstage. County officials want to emphasize that the soundstage is a “qualified production facility” that allows filmmakers who use it to claim New York’s lucrative film tax credit.

To much fanfare Andy announced in March 2014 that the state would build the facility and that it would create 350 new jobs and bring “Hollywood . . . to Onondaga.” Construction ultimately cost $14.4 million. The results? Virtually zero jobs and 18+ million dollars of our money wasted – or in Hollywood lingo, a flop. Andy did not bother to inquire of production companies, crew members, networks or film companies if a location 41/2 hours away from NYC would be a convenient or enticing spot to film. Since a precious few skilled crew members, execs, directors etc. live anywhere near Syracuse, the costs of shooting there go way up due to travel and lodging costs. Why shoot in Syracuse when – if you are filming in NYS at all – you can shoot in Queens, Brooklyn, Manhattan, The Bronx, Westchester and Rockland.

Forget NYC which dominates production. Lets just see what was shot in Westchester (among others) in the last 18 months:Billions,Quantico, Law & Order: SVU, Unforgettable Kimmy Schmidt, The Post, Madam Secretary, You, Orange is the New Black, Sneaky Pete, The Path, The Americans, The Sinner, The Irishman, Blacklist, Blindspot and many others.

So Mr. Cuomo why oh why would a production using talent living downstate or out of state shoot in an indoor Syracuse, NY facility when they can shoot in NYC or nearby, convenient to talent, craft services with a buffet of outdoor and indoor locations suited for the script? Elementary shoots in Brooklyn – a lot. There is no Brooklyn in Syracuse. The Sinner (2018) used the town of Purchase to portray a small town which as per the script was located north west of – you guessed it – Syracuse, NY. A White Plains building was used to portray a DC press room. No reason to try to find locations in/near Syracuse when they are in NYC, Westchester, Rockland and LI (dear departed “Keven Can Wait”.

Andy knows nothing about business. Just like his selection of casino sites, he eschews the opinions of people in the industries in which he bets our tax money. He bets, we lose.

https://www.crainsnewyork.com/entertainment/city-entertainment-industry-hooked-state-tax-break

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    This entry was posted on October 13, 2018, 12:15 am and is filed under "Incentives"/Tax breaks, New York, Tax Incentives. You can follow any responses to this entry through RSS 2.0. Both comments and pings are currently closed.

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