For Alan Suna, co-owner of Long Island City-headquartered Silvercup Studios, a New York stage facility mainstay, the success of the TV series pilot filming season bodes well for spot production in the Big Apple. Just as the upsurge in film and TV lensing, including pilots, has increased dramatically since New York’s feature/TV tax credits took hold in 2004-’05, Suna thinks that the new state incentives package designed specifically for commercials will spur spot biz significantly this year and beyond.
“That’s my hope and I think the prospects are quite good,” he related, noting that TV pilot activity wasn’t much of anything prior to the TV/feature tax credit initiative. Subsequently, though, growth has been substantive–to the point where New York City is experiencing a TV production boon, underscored by the fact that there are now 10 new series pilots underway in Gotham.
Four pilots are currently in or about to go into production at Silvercup. ABC/Sony’s Cashmere Mafia, executive produced by Sex and the City creator Darren Star, is slated to soon begin shooting its pilot on Silvercup’s main lot as will CBS/FOX’s Babylon Fields (with its pilot being directed by spotmaker Mike Cuesta, Jr. of bicoastal The Artists Company). Additionally, ABC/Touchstone’s Dirty Sexy Money and CW/Warner Bros. TV’s Gossip Girls have already started production on Silvercup’s East lot.
Feature films have also been on the rise in New York. The Producers was the first film to take advantage of the New York tax credits and assorted other movies have followed suit, including the recently released Music and Lyrics. “Before the tax credits, you had films perhaps needing to come to New York for a little location work and then they’d ‘get out of Dodge’ for the bulk of their shooting,” recalled Suna. “Now those productions are staying in New York for stage and location work.”
Suna cites a New York study which has found that for every dollar in tax credits, the state as a result has garnered an additional $1.34 in tax revenue. “The state is making 34 cents on every dollar,” he said. “That’s an incredible return that has stimulated the state and city economies–and which commercials hope to emulate with their new incentives package.”
Threesome
The New York State incentives initiative for commercials consists of three prime components receiving collective funding of $7 million:
- A growth credit provision designed to encourage companies to increase the amount of business they bring to the state by providing a refundable tax credit of 20 percent of qualifying production costs solely on newly generated business. The amount will be based on the difference between the total qualified production costs of the current year and the total amount of production costs of the preceding year. The growth credit is funded by $3 million of the aforementioned $7 million total. The intricacies of the growth credit–such as coming up with the best way to verify total qualified production costs of the prior year as compared to the next–will be addressed in regulations and reflected in forms and instructions which will soon be released. These regulations governing how the incentives are to be applied were drafted by the New York State Department of Budget, and the Governor’s Office for Motion Picture and Television Development.
- A downstate jobs credit, which addresses the misconception about the commercials industry that there is a fixed amount of work that will occur in a certain location regardless of economic circumstances. This is clearly not the case in that every spot lensing job is considered up for grabs prior to being filmed. The rationale for this downstate jobs credit is that it’s important not to take this business for granted and to make efforts to retain the existing share of work that is currently being produced in New York. For this provision, $3 million in annual funding is being apportioned for eligible commercial production companies that conduct filming activities within the Metropolitan Commuter Transportation District. The jobs credit is five percent of the total production costs that exceed $500,000 and would be distributed on a first come, first served basis.
- And an upstate jobs credit which recognizes that spot production regularly occurs outside major metropolitan areas that are considered traditional production centers. This incentive component provides $1 million annually to all eligible commercial production houses that participate in filming activity outside the Metropolitan Commuter Transportation District. This jobs credit would be five percent of the total production costs that exceed $200,000 and would be distributed on a first come, first served basis.
Pat Swinney Kaufman–executive director of the New York State Governor’s Office for Motion Picture & TV Development–said that the tax credit application forms and instructions will be available in late winter/early spring. She notes that the film commission worked closely with the Association of Independent Commercial Producers (AICP) and the Association of Independent Creative Editors (AICE) to make sure the application is consistent and corresponds with industry practices and budget breakdowns.
Kaufman added that the growth credit provision can be applied for initially at year’s end or in early 2008 by a production company via a comparison of its ’07 volume of business with that done in 2006 in New York.
“The growth credit is the most lucrative provision of the commercial production incentives,” related Kaufman. “The tax credits package is unprecedented in that it has been designed solely for commercials. We’re hoping they help to stimulate commercials in the same way our TV/feature incentives did for television and feature films. Commercials represent a prime area in which we’d like to see growth.”
Morty Dubin, chairman emeritus of the New York Production Alliance‘s executive board, said that while feature and TV program production has increased considerably in New York in recent years, commercials have declined. “That’s why these incentives are so important in helping to build positive momentum and growth for the advertising business, which is a key contributor to the health of the New York economy,” said Dubin.
Released last year, a study commissioned by the New York Film, Television and Commercial Initiative (an NYPA committee) and conducted by Cornell University researchers and the Fiscal Policy Institute concluded that there has been a steady erosion of commercialmaking in New York. The “Big Picture” study cited location shooting day figures based on film permits issued by the New York City Mayor’s Office of Film, Theatre and Broadcasting.
Per those tallies, the number of spot location shoot days went down nearly 40 percent from ’98 to ’04. Understandably the biggest decline occurred in ’00 during the six-month actors unions’ strike against the ad industry. But even with some nationwide recovery since then, the numbers still show a major drop in spot production business for the Big Apple when comparing the movement between a high point (in ’98) and a recovery point (’04).
The “Big Picture” study cited other factors contributing to the spotmaking decline in New York, including the use of a wider range of international locations, and buyouts of residuals for non-U.S. actors in international locations. Additionally, the study noted that the decrease in commercial filming in New York took place “in conjunction with the loss of advertising agency headquarters. New York is now the home to one-third of all the advertising agency headquarters in the world as compared with one-half only 20 years ago.”
City watch
Meanwhile now there’s the possibility that New York City will launch a companion spot incentive program with some $3.5 million in funding–but that would require approval from the Mayor’s Office and the City Council. There is precedent for this in that the city earlier established a similar companion measure to the Empire State Film Production Credit covering TV and features, with both programs helping to boost movie and television biz in both the state and municipality.
AICP president/CEO Matt Miller affirmed that a New York City initiative for commercials remains “very much alive,” noting that several City Council members and the Mayor’s Office have expressed support for such a measure.
In response to a SHOOT query regarding the status of a city incentives program for spots, commissioner Katherine Oliver of the New York City Mayor’s Office of Film, Theatre and Broadcasting, stated, “The commercials sector is an integral part of New York City’s local entertainment industry. Now that the commercial program has been passed at the State level, the city is currently examining the program at a local level.”
Complex commitment
Bullish on New York production prospects is the aforementioned Silvercup Studios. The company is planning a $1 billion, 2.7 million-square-foot complex–dubbed Silvercup West–which will include eight soundstages, commercial office space, retail stores, public plazas and 1,000 residences. The new development is on the East River waterfront, four blocks west of Silvercup Studio’s main headquarters. This would complement the stage and support resources at the Silvercup Studios and Silvercup East facilities in Long Island City. (Silvercup East, which opened in ’99, is about a mile southeast of the main lot.)
Silvercup West will create an estimated 3,900 permanent jobs, some 2,200 construction jobs and 2,500 indirect jobs. Groundbreaking on Silvercup West should take place in ’08, with construction slated for completion in late 2010/early 2011.
When the New York City Council voted thumbs up last year on the construction of Silvercup West, Gotham Mayor Michael R. Bloomberg issued a statement that read: “Silvercup Studios, one of the pioneers in reviving the film and television industry in New York City, keeps on growing with the exciting addition of Silvercup West, which will create jobs for New Yorkers and generate additional revenues for the city. New York City’s production industry employs 100,000 New Yorkers and generates $5 billion for the city annually, and we are committed to expanding our share of this vital industry.”
