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N.J. tax incentives could create a thriving film, television industry in the state

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Montclair Film Festival—which showcases the talents of filmmakers worldwide while increasing and focusing attention on the cultural vibe of the Township of Montclair—invited industry experts to speak on a panel entitled Filmmaking in New Jersey on Tuesday.

Discussions included state tax incentives and the potential benefits of the Garden State Film and Digital Media Jobs Act—sponsored by Raymond Lesniak (D-Union)—for the second time, will be the subject of a state Senate hearing on Monday.

According to Montclair Film Festival’s Artistic Director Thom Powers, who moderated the event on Tuesday, 44 states currently offer tax incentives.

“This is a trend that politicians and state legislators have seen to be beneficial for their states—otherwise it wouldn’t be expanding,” Powers said.

The most notable tax incentive states and also some of the fastest growing film industry hubs outside of Hollywood include New York, Louisiana, Pennsylvania, and Georgia, all with more than 20 percent in either transferable or refundable tax credits.

New York in particular offers 30 percent refundable tax credits for below-the-line credits—not including salaries for talent, producers, writers or directors. This most-generous film tax credit program is capped at $420 million per year.

In comparison, New Jersey has a 20 percent transferable tax credit capped at $10 million per year that is set to expire in 2015, but after being suspended by Gov. Chris Christie in 2010, the program is no longer being funded.

However, unlike states like Louisiana—which also has an aggressive 30 percent tax credit program to attract film business—New Jersey already has an existing film infrastructure and talent pool.

“The proximity of New Jersey to the media capital of NYC and the incredible range of locations that New Jersey offers—from urban settings to suburban to rural to seashore—makes it a very attractive place for film and television productions,” Powers said.

“Also, if you wanted to film a car chase in NYC, it’s incredibly difficult if not impossible to do so these days. New Jersey has plenty of urban backdrops where that kind of filming can be facilitated a lot more easily.”

Powers mentioned that if productions such as “The Dark Knight”, which filmed a few days in Newark because it was more accommodating than other locations, were to take advantage of tax incentives, “productions like that could spend weeks of time filming here and putting hundreds of millions of dollars into the economy.”

Tom Bernard, co-president and co-founder of Sony Pictures Classics who currently resides in New Jersey and serves as a member of the state’s film commission, doesn’t think Jersey legislators understand that film and television employees would not only pay income tax on their salaries but would also spend money in the local economy.

“What would happen if someone came to your town and spent $300 million? ...New Jersey should be one of the most competitive movie states in the country,” Bernard said Tuesday.

Even so, current productions in New Jersey only seem to include parts of major motion pictures, such as the revival of “Annie” starring Jamie Foxx; and Clint Eastwood’s “Jersey Boys.” Even great locations like the Ramapo Mountain State Forest, which acted as Panem’s District 12 in “The Hunger Games: Catching Fire,” only warranted a few shoot days.

The only shows that film exclusively in New Jersey include Kevin Smith’s “Comic Book Men” on AMC (which films predominantly in Red Bank) and Spike TV’s “Inkmaster” at the Ironbound Film and Television Studios in Newark.

But while there may be limited work in-state, there’s an incredible amount of New Jersey residents willing to find it elsewhere.

Terry Casaletta, an organizer for Teamsters Local 817, quoted a New Jersey Bureau of Labor statistic on Tuesday to highlight just how many employees there currently are—more than 14,000 residents work in the industry, but only 10 percent make their wages here.

One such resident would be Carol Cuddy, producer of works such as “True Detective” and “The Departed.”

Cuddy said Tuesday that with the right tax incentives, New Jersey could increase work in the film and television industry by building soundstages in existing warehouses.

A sentiment that Simon Broad, president of ARRI CSC—an industry-leading full-service camera, lighting and grip rental company headquartered in Secaucus—shares.

“The New York tax incentive requires each production book stage-time…credible studio space is needed,” Broad said in a telephone interview. “The amount of New York City-based production for just the second half of this year is enormous…with shows being renewed and pilots being picked up as series…plus the incredible announcement of ABC Marvel filming four Netflix shows in Manhattan…everything will be at capacity.”

Broad believes that with the construction of more soundstages, New Jersey has the right infrastructure, airports and companies that could result in a thriving film and television industry.

Now, it just needs the right tax incentives—if reinstated, Broad said that the multimillion dollar ARRI CSC would without question expand and increase employment.

“We could justify that additional capacity here as opposed to having to look at opening in areas like New Orleans or Atlanta,” Broad said. “But we’ve got to follow the work.”

Such work seems to be continuously leaving New Jersey.

For example, “America’s Got Talent” once filmed at New Jersey Performing Arts Center in Newark when residual tax credits were still available.

David Rodriguez, executive vice president of NJPAC, said Tuesday, “there were 350 people working for three months every single day. The production budget on that show was $300 million…Of the $300 million, $80 million came back in direct economic benefit.”

Now, “America’s Got Talent” benefits the New York City economy after leaving New Jersey for tax incentive purposes.

“Law & Order: SVU”—which filmed in North Bergen since 1999—also moved to Manhattan in 2010 when the New Jersey tax incentive was suspended.

Then there are the stories that take place in New Jersey, but are filmed where tax incentives are more advantageous.

Carol Cuddy worked as unit production manager on “Hurricane,” the biography of Newark-based boxer Hurricane Carter—Cuddy said that the crew spent only a few days shooting exteriors in New Jersey and filmed the rest in Canada.

“Boardwalk Empire” built a $5 million 300-foot-long boardwalk set in Brooklyn just to be able to film in New York.

And “Silver Linings Playbook” took place in South Jersey but filmed in Pennsylvania.

Joseph Chianese, executive vice president of EP Financial Solutions, the payroll company for nearly every movie in the country, said Tuesday that his company tracks domestic and international incentives that are available to producers.

“A producer will create five or six budgets based on different locations, and the key factors in those budgets are tax incentives,” Chianese said.

Chianese also mentioned that “there are very few industries where within 30 or even 90 days someone can drop anywhere from $5 to $65 million dollars into the local economy.”

That statistic alone should knock some sense into the New Jersey state Senate when considering the Garden State Film and Digital Media Jobs Act on Monday.

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Montclair Film Festival—which showcases the talents of filmmakers worldwide while increasing and focusing attention on the cultural vibe of the Township of Montclair—invited industry experts to speak on a panel entitled Filmmaking in New Jersey on Tuesday.

 

Discussions included state tax incentives and the potential benefits of the Garden State Film and Digital Media Jobs Act—sponsored by Raymond Lesniak (D-Union)—for the second time, will be the subject of a state Senate hearing on Monday.

 

According to Montclair Film Festival’s Artistic Director Thom Powers, who moderated the event on Tuesday, 44 states currently offer tax incentives.

 

“This is a trend that politicians and state legislators have seen to be beneficial for their states—otherwise it wouldn’t be expanding,” Powers said.

 

The most notable tax incentive states and also some of the fastest growing film industry hubs outside of Hollywood include New York, Louisiana, Pennsylvania, and Georgia, all with more than 20 percent in either transferable or refundable tax credits.

 

New York in particular offers 30 percent refundable tax credits for below-the-line credits—not including salaries for talent, producers, writers or directors. This most-generous film tax credit program is capped at $420 million per year.

 

In comparison, New Jersey has a 20 percent transferable tax credit capped at $10 million per year that is set to expire in 2015, but after being suspended by Gov. Chris Christie in 2010, the program is no longer being funded.

 

However, unlike states like Louisiana—which also has an aggressive 30 percent tax credit program to attract film business—New Jersey already has an existing film infrastructure and talent pool.

 

“The proximity of New Jersey to the media capital of NYC and the incredible range of locations that New Jersey offers—from urban settings to suburban to rural to seashore—makes it a very attractive place for film and television productions,” Powers said.

 

“Also, if you wanted to film a car chase in NYC, it’s incredibly difficult if not impossible to do so these days. New Jersey has plenty of urban backdrops where that kind of filming can be facilitated a lot more easily.”

 

Powers mentioned that if productions such as “The Dark Knight”, which filmed a few days in Newark because it was more accommodating than other locations, were to take advantage of tax incentives, “productions like that could spend weeks of time filming here and putting hundreds of millions of dollars into the economy.”

 

Tom Bernard, co-president and co-founder of Sony Pictures Classics who currently resides in New Jersey and serves as a member of the state’s film commission, doesn’t think Jersey legislators understand that film and television employees would not only pay income tax on their salaries but would also spend money in the local economy.

 

“What would happen if someone came to your town and spent $300 million? ...New Jersey should be one of the most competitive movie states in the country,” Bernard said Tuesday.

 

Even so, current productions in New Jersey only seem to include parts of major motion pictures, such as the revival of “Annie” starring Jamie Foxx; and Clint Eastwood’s “Jersey Boys.” Even great locations like the Ramapo Mountain State Forest, which acted as Panem’s District 12 in “The Hunger Games: Catching Fire,” only warranted a few shoot days.

 

The only shows that film exclusively in New Jersey include Kevin Smith’s “Comic Book Men” on AMC (which films predominantly in Red Bank) and Spike TV’s “Inkmaster” at the Ironbound Film and Television Studios in Newark.

 

But while there may be limited work in-state, there’s an incredible amount of New Jersey residents willing to find it elsewhere.

 

Terry Casaletta, an organizer for Teamsters Local 817, quoted a New Jersey Bureau of Labor statistic on Tuesday to highlight just how many employees there currently are—more than 14,000 residents work in the industry, but only 10 percent make their wages here.

 

One such resident would be Carol Cuddy, producer of works such as “True Detective” and “The Departed.”

 

Cuddy said Tuesday that with the right tax incentives, New Jersey could increase work in the film and television industry by building soundstages in existing warehouses.

 

A sentiment that Simon Broad, president of ARRI CSC—an industry-leading full-service camera, lighting and grip rental company headquartered in Secaucus—shares.

 

“The New York tax incentive requires each production book stage-time…credible studio space is needed,” Broad said in a telephone interview. “The amount of New York City-based production for just the second half of this year is enormous…with shows being renewed and pilots being picked up as series…plus the incredible announcement of ABC Marvel filming four Netflix shows in Manhattan…everything will be at capacity.”

 

Broad believes that with the construction of more soundstages, New Jersey has the right infrastructure, airports and companies that could result in a thriving film and television industry.

 

Now, it just needs the right tax incentives—if reinstated, Broad said that the multimillion dollar ARRI CSC would without question expand and increase employment.

 

“We could justify that additional capacity here as opposed to having to look at opening in areas like New Orleans or Atlanta,” Broad said. “But we’ve got to follow the work.”

 

Such work seems to be continuously leaving New Jersey.

 

For example, “America’s Got Talent” once filmed at New Jersey Performing Arts Center in Newark when residual tax credits were still available.

 

David Rodriguez, executive vice president of NJPAC, said Tuesday, “there were 350 people working for three months every single day. The production budget on that show was $300 million…Of the $300 million, $80 million came back in direct economic benefit.”

 

Now, “America’s Got Talent” benefits the New York City economy after leaving New Jersey for tax incentive purposes.

 

“Law & Order: SVU”—which filmed in North Bergen since 1999—also moved to Manhattan in 2010 when the New Jersey tax incentive was suspended.

 

Then there are the stories that take place in New Jersey, but are filmed where tax incentives are more advantageous.

 

Carol Cuddy worked as unit production manager on “Hurricane,” the biography of Newark-based boxer Hurricane Carter—Cuddy said that the crew spent only a few days shooting exteriors in New Jersey and filmed the rest in Canada.

 

“Boardwalk Empire” built a $5 million 300-foot-long boardwalk set in Brooklyn just to be able to film in New York.

 

And “Silver Linings Playbook” took place in South Jersey but filmed in Pennsylvania.

 

Joseph Chianese, executive vice president of EP Financial Solutions, the payroll company for nearly every movie in the country, said Tuesday that his company tracks domestic and international incentives that are available to producers.

 

“A producer will create five or six budgets based on different locations, and the key factors in those budgets are tax incentives,” Chianese said.

 

Chianese also mentioned that “there are very few industries where within 30 or even 90 days someone can drop anywhere from $5 to $65 million dollars into the local economy.”

 

That statistic alone should knock some sense into the New Jersey state Senate when considering the Garden State Film and Digital Media Jobs Act on Monday.

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Meg Fry

Meg Fry

Meg Fry covers manufacturing and retail. Meg joins NJBIZ with past production experience in the arts, film and television. She continues to write and market her own spec scripts and screenplays. You can contact her at megf@njbiz.com or @MegFry3 on Twitter.

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