"St Louis Rolls the (tax) credits"
Efforts under way to boost Missouri’s film tax credit from $4.5 million to $10 million
St. Louis Business Journal - by Lisa R. Brown
The tax incentive used to lure George Clooney’s movie to St. Louis almost didn’t happen.
Last fall, the $4.5 million in state tax credits to help pay production costs of Paramount Pictures’ “Up In The Air” got caught in the shuffle of transitioning governors. Outgoing Gov. Matt Blunt wouldn’t sign off on tax credits, leaving the approval to incoming Gov. Jay Nixon, who was not yet sworn in.
Time was running short, and the film’s producers and Director Jason Reitman were close to moving the bulk of the filming to Michigan, which has an unlimited amount of tax credits available for film production. Reitman, who directed the Oscar-winning “Juno,” came to St. Louis with a team of producers the week of the vice presidential debate in early October. By November, Reitman’s team, including St. Louis native Michael Beugg as executive producer, had settled on the St. Louis area as a primary location to film portions of the movie, in which Clooney portrays a businessman on a mission to accumulate a million frequent-flier miles. Lambert-St. Louis International Airport, with thousands of square feet of empty space after cutbacks by American Airlines, was viewed as a natural fit for the airport scenes.
“I told (Missouri Film Commission Director) Jerry Jones, they’re going to Michigan. We’re going to miss this,” recounted Kim Tucci, former chairman of the commission. Tucci also heads the St. Louis Film Office and is a St. Louis Convention & Visitors Commission board member and co-owner of the Pasta House restaurant chain.
Beugg, whose producing credits include “Little Miss Sunshine” and “He’s Just Not That Into You,” said his St. Louis ties were not a factor in choosing to film here. Beugg was born in St. Louis and graduated from St. Louis University High School in 1981. “The tax credits were the No. 1 reason,” he said.
Beugg was a line producer on the 1988 film “The Big Brass Ring,” which also was shot in St. Louis. “If the tax credits were not approved, it’s certain we would have gone to another state that has tax credits for ‘Up in The Air.’”
But St. Louis got its happy ending. The state gave its approval at the 11th hour, and “Up in The Air” garnered the highest amount of tax credits ever given in the 10-year history of Missouri’s film tax-credit program — $4.5 million, the total amount available for 2009.
By Tucci’s estimate, the $30 million production of “Up in The Air” will have an economic impact of at least $50 million on the St. Louis region, generating 500 jobs in St. Louis and translating into 6,000 local hotel room nights. The film is building 50 sets in the St. Louis area, including at Lambert, Affton High School and dozens of other sites throughout the region. Beugg said two-thirds of the film’s crew, or 88 people, are Missouri residents working full time.
Boosting the credit
To help build the state’s viability for attracting more film production, a new effort is under way to more than double the amount of available tax credits. Missouri Rep. Jason Grill (D-Kansas City) has introduced House Bill 767 to expand the state tax credit to $10 million for 2010. The bill does not yet have a hearing date.
Grill said he’s convinced that boosting funding for movie production in Missouri is a sure-fire job creator. On March 20, Grill, an attorney and Saint Louis University alumnus, traveled to St. Louis to appear as an extra in “Up in The Air.”
“I think it’s so important for job creation and our economy,” Grill said of the tax credit bill. “There are many other states that have uncapped tax credits for film production, including Iowa, Illinois and Louisiana. We have to remain competitive with other states around us.”
Missouri is one of three dozen states that have some form of tax credits available for film production, but getting the measure passed by the state Legislature will take a Herculean effort, as tax credits are under fire. When Nixon was elected governor last fall, he ordered a review of all tax credits in the face of a $261 million dollar budget shortfall. Legislators in recent weeks have taken aim at some tax credits, calling for caps and sunsets on some, such as Missouri’s tax credit for renovations to residential and commercial historic properties.
In Wisconsin, Gov. Jim Doyle is pushing to end that state’s existing film tax-credit program — which provides a 25 percent tax credit on film production costs and a 15 percent tax credit for infrastructure costs for production — and replace it with a $1 million grant program. Missouri’s film tax credit provides a 35 percent tax credit for film production costs.
“Tax credits are under siege right now, but this is a good tax credit that works, and there’s data to support it,” Grill said.
The Missouri Film Commission’s Jones said he’s bracing for a battle. “Obviously, we would like to have the increase, but in these times with the view on tax credits, I don’t know what’s going to happen,” he said. Jones organized a lobbying day in Jefferson City on March 31 for supporters of HB 767 to talk to legislators about getting a hearing set for the bill.
Boosting funds available for the tax credits does have some bipartisan support — Rep. Mike Sutherland, (R-Warrenton), a member of the Missouri Film Commission, said he’s backing the increase. The commission must approve all films and commercials that receive the tax credits, which also must be approved by the Missouri Department of Economic Development. “The tax credit doesn’t get used unless the dollars are spent,” Sutherland said. “We’re bringing a lot of money from outside the state inside the state.”
St. Louis is nothing short of star-struck with George Clooney’s film “Up in the Air.” Backers of the film-production tax credit said the buzz around the movie should help drum up support for increasing it.
Dennis Fallon, a Kansas City-based director and producer, is backing an increase in the state’s film tax credit. With “Up in The Air” taking the entire $4.5 million available in tax credit authority for 2009, Fallon said he’ll have to choose an out-of-state location for his next movie if the tax credits aren’t available.
Fallon’s Waldo West Productions received $285,784 through the state tax credit program in 2006 to help fund “Even More than Puppy Love,” a family feature shot in the Kansas City area. Fallon has directed or produced four films in Missouri, most recently, “All Roads Lead Home.”
“It’s almost impossible to produce a film without incentives,” Fallon said. “When we produce a film, we do everything in Missouri, from pre-production, to production and post-production. All that money goes back into Missouri.” Fallon said based on the success of “All Roads Lead Home,” which is now available on DVD, he has a deal in the works on the first of a three-film family series. “If I have this film in place and there’s no tax credits in Missouri, I’m not stopping my film. I’ll go somewhere else, and I don’t want to do that.”
Kim Tucci, former chairman of the Missouri Film Commission, said landing “Up in the Air” is a positive step for the local movie industry because it lets other filmmakers see the viability of producing a movie here, and it helps build a skilled support staff base. “It’s a good test for St. Louis to show how film-friendly it is here,” Tucci said. His wife, Sharon Tucci, heads St. Louis-based talent agency TalentPlus, which is supplying “Up In The Air” with actors. Sharon Tucci also is a board member of Missouri Motion Media Association, which lobbies state officials to provide funding to bring additional movies to Missouri.
St. Louis has served as a backdrop for dozens of films, from “Planes, Trains and Automobiles” in 1987 to “King of the Hill” in 1993. Recent large-scale movie productions shot in St. Louis include “Meet Bill,” starring Jessica Alba, in 2006, and “The Game of Their Lives” in 2003.
Not all of the movies filmed in St. Louis that have received state tax credits have been hits or even widely released. In 2008, 11 productions shared in the $4.5 million in available tax credit authority, including a Harley-Davidson commercial that received $53,900 in tax credits.
But Kim Tucci said it doesn’t matter whether the film ultimately is a critical success or a flop. What matters, he said, is the production dollars spent while filming. “I don’t care if it’s spent in Kansas City, Springfield or Branson, the bottom line is how much money they spend while they’re here.”
