They say that it all started with Joe Pantoliano, an actor better known as Ralph Cifaretto, mob captain on the hit HBO series The Sopranos, which is hot in Long Island City, N.Y. Pantoliano was steamed about so-called "runaway production." And he caught the ear of Assemblyman Joseph Morelle (D-Rochester), who met Pantoliano in Los Angeles while attending the Democratic National Convention. "Last year, $10.4 billion was lost in runaway production," the actor stated recently. "A funding incentive needs to be created to keep production in the U.S. We need to make this a level playing field."
That dream may soon become a reality, at least in New York. The New York State Assembly is poised to create a $10 million Motion Picture Investment Fund, $3 million of which is earmarked for the coming fiscal year. The measure, included in the Assembly’s "Jobs 2001 Agenda," passed in April as part of the house budget resolution, and is supported by the Democratic majority, Assembly Speaker Sheldon Silver (D-NYC), and Morelle, who is chair of the Assembly Committee on Tourism, Arts and Sports Development. The proposal could become law as early as June or as late as September, depending on when the state budget is passed.
"I am encouraged that so many legislators have offered their support of this initiative by Speaker Silver and myself," Morelle says. "The Motion Picture Investment Fund will spur economic development in a key New York industry, and I am hopeful that we will make this proposal a reality."
Both the state and city film commissions are guarded about the measure. "We can’t comment on it," says Pat Swinney Kaufman, deputy commissioner and director of the New York State Governor’s Office for Motion Picture and Television Development. "The governor’s office is taking it under consideration and reviewing the proposal."
"The Motion Picture Investment Fund will be a welcome help to some independent films with lower budgets of up to five million dollars," notes Patricia Reed Scott, the commissioner of the Mayor’s Office of Film, Theater and Broadcasting.
Others in the industry, however, are unreservedly excited about the measure. "We have always felt that it is important to have a combined public [sector] and private [industry] marketing partnership," remarks Mitchell Brill, director of operations at Lifetime Studios, Astoria, N.Y., and an executive VP of the New York Production Alliance (NYPA), a trade group chaired by industry veteran Morty Dubin of New York-based Iris Films, that helps maintain, promote, increase, and expedite film and video production in the state. (According to Chris Delgiudice, legislative director to Assemblyman Morelle, the NYPA was helpful in assessing the needs of the industry.) "The issue has always been how to pay for [that marketing]," continues Brill. "The alliance is a volunteer group; we did not have that kind of operating budget. Now it will exist."
Allocation
The fund is slated to encourage private corporate investment in New York State’s independent film industry through a matching-grant program, administered by the State Council on the Arts. Grants of up to $250,000 would be awarded to independent film producers as a dollar-for-dollar match to money contributed by private investors.
Portions of the overall fund would be used for marketing and promotion campaigns, for partial financing for independent films, and for training programs. "We see the fund as serving three purposes," explains Alan Suna, CEO of Silvercup Studios, Long Island City, and a member of the NYPA. "One is to provide money for smaller independent-type productions that will be shooting pretty much exclusively in New York. Another purpose will be improving education with regard to film and TV production, educating young people to become filmmakers. And the third aspect will be to use the funds for the marketing of the state of New York as an appropriate venue for film and television production. I believe that the city and state have been hampered because they have inadequate budgets for marketing."
Some in government argue, however, that the multi-purpose approach to the fund could be counterproductive, diffusing its focus. "I’m not sure the people proposing the fund thought through exactly what they want to do," remarks one government insider, who requested anonymity. "It’s not clear whether they want to use it to deal with runaway production or to encourage independent filmmaking in New York. I’m not sure if they know which strategy to take."
Perhaps to address such criticisms, the NYPA has been asked to offer suggestions on how to implement the fund. Formed in ’98, the NYPA is a nonprofit organization representing all segments of the production industry, including commercials; feature films; broadcast, cable, corporate, and educational television; animation; music; and new media. Members include production and postproduction companies, talent and craft unions, support and services companies, and industry-related educational, as well as professional, institutions and organizations. The NYPA represents over 75,000 people working in 65 member organizations.
Brill says that the organization will work in an advisory capacity to help determine how the money is used, by communicating the needs and priorities of the production community. "Assemblyman Morelle felt they needed a neutral body to help administer the fund," Brill explains. "That accomplishes the public/private partnership we have been aiming at."
The city and state film commissions say they are doing their part to hold up such a partnership, aggressively promoting New York through the use of tax incentives, location assistance, and marketing. "New York is one of the biggest production regions in the country, second only to L.A.," reports Kaufman. "The industry creates over seventy-five-thousand jobs. We want to get our message out."
As incentives, Kaufman notes, production goods and services are completely free of sales tax, while the city film commission offers free permitting and free location and police assistance to all types of productions. The state film commission promotes all parts of New York at trade shows and film festivals, on the Web, and in advertisements appearing in various entertainment publications. The state utilizes a colorful brochure offering advice, contacts and access to more than 50,000 images in the state’s location library. The city also is a presence at the trade shows, and has an extensive Web site.
"The single biggest marketing tool is the fact that we’re New York," Kaufman adds. "It’s a great location, and also a great place to be when you’re not shooting. In addition, we have the best crew base in the country, and an amazing actor base."
Scott, the city film commissioner, says that marketing efforts and other incentives have had the desired effect. "New York City has been somewhat insulated from the national production declines," she notes, pointing to a record high in 2000, with $1.38 billion in direct expenditures. She reports that primetime television has been driving the growth, with the city hosting 11 episodic series (versus one in ’93). "Commercial production expenditures have been growing since 1997, and peaked in 1999 with a boost from the dot-com industry," she says. "Despite the market fluctuations caused by the [failure of some] dot-coms, expenditures for commercials remained steady at $315.6 million in 2000."
For location shoots, the government has been aided by the NYPA, which, Brill says, "helped facilitate a dialogue over permits. Working with the city office, we developed rules of the road for location shooting; etiquette guidelines for crews. That was a direct response to complaints about productions. Everyone likes features, but they often do not love them in their backyards. It takes a lot of finesse and cooperation."
Runaway Issues
The industry still faces challenges, however—primarily the ever-present threat of runaway production. Scott points to tax incentives offered by Canada, which she says are strengthened by a NAFTA provision that defines film and television production as a cultural import.
"Canada is committing part of its taxpayer funds to directly rebate up to twenty-two percent on labor costs for productions that use a percentage of Canadian locations and labor," she observes, "whereas in the U.S., a government subsidy is usually directed to essential public services rather than private enterprise. We hope that such imbalances can be remedied. It’s imperative that Congress develops some competitive incentives for the U.S. production industry."
In the end, such ideas help underline the importance of the proposed investment fund. "Runaway production started the thinking [on the fund]," explains Suna, who adds that his studio has had a record year. "There is a recognition that we can do a better job for this industry in New York State. Runaway production wakes you up."
"We need to compete effectively," Brill adds. "When producers are looking to New York, we want them to have a clear and accurate perception of the benefits of the area. We hope to take some of the money from the fund and retain an advertising agency to create a program that will market our formidable resources as a production center. We need to tell our story and go nationally into markets, so productions come into New York as opposed to going to Canada or elsewhere. We need to clear up misperceptions."
