How film credit is saving local hotels
BY DUANE M. SWANSON
In the first quarter of 2008, local hotels faced an incredible drop in corporate travel activity. The lack of business travel was forcing our hotel to lay off approximately 15 full-time employees.
Fortunately, film tax-credit legislation was passed in April 2008. Immediately, we began receiving calls from film production companies seeking accommodations for their casts and crews. Within a month, we had our first guests from Hollywood.
The Somerset Inn hosted the cast and crew of Clint Eastwood's "Gran Torino" during 2008. As a result, all 15 of our employees who would have been on the state's unemployment rolls were working 40 hours a week.
I also needed to hire 12 more staff members -- who likely would have been unemployed as well -- to help handle the business generated by the film industry. We were able to keep 27 of our co-workers and friends employed at our hotel and off of the state's unemployment program solely due to this modest-sized film project, which spent nearly $13 million with dozens of companies in Michigan.
The film credit legislation is not just about creating movie industry jobs and careers -- which it is doing. It is helping retain and create jobs in non-film related industries as well. Film production companies are investing hundreds of millions of dollars in our communities each year. They are generating sales tax and income tax revenues for Michigan. They are spending money in area restaurants, hotels, retail businesses, transportation companies and more.
The corporations investing those hundreds of millions of dollars in Michigan in 2010 will not receive their applicable portion of the tax credit until after they file their tax returns in 2011. Meantime, those dollars are being turned multiple times in our local economy. The multiplier used is debatable. Depending on who is commissioning the economic study, those dollars are turned two to eight times in our state.
The only problem with the film tax credit incentive is that the language has been interpreted so that commercial film production is not eligible for the incentive. There is a huge opportunity to capture more of the commercial market.
I agree with most of the efforts to diversify our state's business base that have targeted the life science, alternative energy and other cutting edge technologies. But film credits provide immediate job retention and creation while the state awaits the broader benefits those other industries have in store for us.
I hope all our legislators realize that the film industry is a bright spot that the hospitality community depends on while waiting for corporate travel to improve and emerging industries to gain traction.
DUANE M. SWANSON is chairman of the Troy Hospitality Committee and director of operations for Somerset Inn.
Read more: How film credit is saving local hotels | freep.com | Detroit Free Press http://www.freep.com/article/20100812/OPINION05/8120388/1068/OPINION/How-film-credit-is-saving-local-hotels#ixzz0wOtCv66n
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