by Juliann Vachon, The State (South Carolina)

Business
Monday, Feb. 21, 2011
Competition keen to lure filmmakers
By JULIANN VACHON - jvachon@beaufortgazette.com


BEAUFORT — Beaufort International Film Festival organizers say they try hard every year to lure filmmakers to the event, make them feel welcome and show them the historic city and neighboring islands.

Their hope is to hear, “Wow, what a perfect location for a movie!”

But the festival, which wrapped up its fifth annual event Sunday, typically targets moviemakers with $2 million to $5 million to spend, not those with blockbuster budgets, festival executive director Ron Tucker said.

The reason: South Carolina’s financial incentives aren’t strong enough to compete with other states for big productions, he said.

“We’ve got to get the state onboard with those really good incentives, like Georgia, Michigan and Louisiana offer,” Tucker said. “Until that happens, our target is the young, up-and-coming filmmaker who can pull off a $2-, $3-, $4-, $5-million film.”

Unlike other states that offer tax credits, South Carolina’s film incentive program provides cash rebates — 20 percent for South Carolina residents’ wages and 30 percent for supplies purchased from in-state businesses — for productions that film and spend at least $1 million in the state.

In comparison, Georgia grants a flat tax credit of 20 percent with a minimum $500,000 investment, plus an additional 10 percent for including a Georgia logo in the finished product.

“We can’t compete, especially with Georgia being so aggressive and us sitting right next to Savannah,” said Carlotta Ungaro, president and CEO of the Beaufort Regional Chamber of Commerce.

South Carolina’s rebate levels actually stand up to other states, according to Carolina Film Alliance president Richard Futch, who also is the casting director for “Army Wives,” a TV show filmed in Charleston. What’s missing, he said, is long-term legislation ensuring state legislators won’t lower those percentages year to year.

That lack of assurance holds the state back from scoring the “Disneys of the world,” Futch said.

“Large companies plan several years in advance, and they’re not going to come here if they don’t know what percentages they can expect from one year to the next,” Futch said.

The film industry’s most recent scare came last year when former Gov. Mark Sanford tried to reduce film incentives as part of his budget vetoes. The Senate voted 28-13 to override him, overcoming opposition from Sen. Tom Davis, R-Beaufort.

Davis said then his vote was partly because the provision would “essentially direct a state agency to spend tax dollars unwisely.” He referred to a 2008 College of Charleston analysis that said for every $1 spent by the state in film industry rebates, only 19 cents was recovered in general revenue.

Futch urged Davis and other critics to look at a broader picture.

“You have to look at the services side,” he said. “Look at all the hotel rooms booked, the food purchased, the paint and lumber bought locally. ... That’s money going right into the local community.”

A University of South Carolina report, also published in 2008, found that every dollar paid out as part of the supplier rebate generated $3.68 of in-state spending.

Incentive levels make or break deals in this state and others, Ungaro said.

She pointed to the Robert Redford movie “The Conspirators,” scheduled for release this year.

Scouts recommended Charleston and Beaufort for the filming site, Ungaro said, but the movie’s financial backers insisted it go to Savannah to take advantage of the incentives Georgia offers. And it did.

When an enhanced incentives program began in 2006, South Carolina lured seven movies and two television features after attracting only two movies the year before, according to a November article in The (Charleston) Post and Courier.

The next year, the state reduced wage rebates for nonresident film workers from 20 percent to 10 percent, with a $3,500 cap per job. It also mandated that production companies get a 30 percent rebate on supply costs only if they buy from South Carolina businesses, The Post and Courier reported.

“A film can locate anywhere it wants,” Ungaro said. “It’s all about the money.”