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NC Film Office: Spending in 2007 hit $160 million

Monday, July 14, 2008

RALEIGH (AP) - Spending by film, television and production companies was more than $160 million in North Carolina in 2007, and the state budget includes changes meant to make the stars shine brighter in the state.

The North Carolina Film Office released the figure Monday, saying it was a 61 percent increase from 2006, a change that the head of the N.C. Film Office attributed to lawmakers making the state's incentive a true 15 percent. Previously, film companies had to pay the state's 6.9 percent corporate income tax on the expenses they claimed to get the credit.

But it's still down from $235 million in revenue in 2004 and $209 million in 2003.

It's not clear where North Carolina ranked in spending compared to other states because Aaron Syrett, who took over as head of the N.C. Film Office last year, said he doesn't try to rank the state. North Carolina officials once said the state ranked third behind California and New York, but that was before more states became players in the incentives game. For example, Michigan's governor signed a bill in April giving film studios a refundable credit of up to 42 percent on production expenses in that state.

North Carolina offers 15 percent for a minimum of $250,000 spent in the state, but advocates say the state compensates with nine sound stages at EUE Screen Gems in Wilmington — the largest full-service motion picture facility east of California — and trained crews.

In addition, the state budget that's awaiting Gov. Mike Easley's signature includes changes to North Carolina's film incentives, including extending the sunset to Jan. 1, 2014, from Jan. 1, 2009.

"This is a big, big deal from the standpoint of planning for television," said Bill Vassar, executive vice president of EUE Screen Gems.

The head of the N.C. Film Office, Aaron Syrett, called the extension one of the most important for the industry because it boosts industry confidence in North Carolina.

The incentives portion of the budget bill would also make sure that North Carolina doesn't get "leatherheaded" again.

Filmgoers were surprised when they got to the end of George Clooney's "Leatherheads," only to find no credit to North Carolina in the closing credits but one for South Carolina.

That was because South Carolina law required a credit in order for the movie's producers to receive a tax break for filming there.

The bill on Easley's desk now would do the same, requiring that production credits mention both the North Carolina Film Office and the appropriate regional film office.

In addition to "Leatherheads," the other major movie filmed in North Carolina in 2007 was "Nights in Rodanthe," starring Richard Gere and Diane Lane. The latter is scheduled to open this fall. The CW Network's "One Tree Hill" also was filmed in Wilmington in 2007 and is producing its sixth season now.

The bill would also make a technical change that could attract movies with bigger stars. The new law allows the first $1 million of a highly compensated individual's salary to count toward expenses that qualify for the tax credit.

"We've lost projects because we're not compensating that first million," Syrett said.

In any other year, Syrett would be confident that the changes would help. But not this year, what with the writers' strike affecting production earlier and the threat of an actors' strike looming.

"Certainly, the sunset gives us six more years of investment," he said. "It gives confidence to Hollywood producers — they're not going to pull the rug out from under us. And the highly compensated individuals allows us to go after talent with higher line budgets."

The Film Office based the spending figure on information from productions throughout the state, the state's regional film commissions and the state's film tax-credit program. Included in figure are wages, goods and services used by commercial production companies in the state.

 

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