Michigan tax credit courts film industry to lure money, jobs

In downtrodden Michigan, the hot topics for conversation in the past six months have been such depressing subjects as bailouts and bankruptcy, layoffs and plant closings, even the disappointing Stanley Cup playoff loss by the NHL's Detroit Red Wings.

So it's been a relief lately to have something else for people to buzz about: celebrity sightings.

We're not talking the D-list: Stars have included George Clooney, Drew Barrymore, Al Pacino, Clint Eastwood, Edward Norton and Hillary Swank.

The gypsy-like movie industry, which roams from place to place to find the best locations — and best deals — has taken a liking to Michigan in the past two years. That's thanks in part to generous tax incentives that give the entertainment industry a refundable business tax credit of up to 42% for production costs spent in the state.

Some lawmakers argue that the tax credit is too generous for a state with an enormous budget deficit and the nation's highest unemployment rate, topping 15% in June, but there's no arguing the fact that the credit has generated business. In 2007, before Michigan offered the credit, two films were shot there. In 2008, after the credit was enacted, 35 films were, according to the Michigan Film Office. In 2009, there are already 85 movies made or with production applications filed with the state.

In 2007, moviemakers spent $2 million producing in the Great Lakes state. In 2008, that soared to $125 million. This year's spending hasn't been tabulated.

"If you're going to go back and say we can't afford this, I would say you don't understand the true value of the program," says Jim Burnstein, a screenwriter and professor at the University of Michigan who helped the state develop the tax credit. Burnstein says he's worried the tax credit will become a political target for lawmakers to cut for short-term gain.

"We have finally got the imagination of people in Michigan that there can be another industry here other than the auto industry. I say give it five years before you say we can't do this."

Besides the tax incentives, Michigan has several traits that make it attractive to the film industry. Unlike Louisiana or New Mexico, which are also film hot spots, Michigan has four marked seasons. It has more than 3,000 miles of coastline along the Great Lakes, bodies of water so big their horizons are as empty as an ocean's. There are lots of charming old towns with charming old buildings, several universities and plenty of out-of-work autoworkers itching to do something with their hands, such as build sets, operate lighting systems or learn makeup artistry.

Even Michigan's economic malaise has an upside for Hollywood: Those empty, abandoned streets in Detroit are perfect for moviemakers, who can close off entire blocks for weeks without worrying about disrupting the city's flow. The Irishman, a movie due next year starring Val Kilmer and Christopher Walken, was shot in several neighborhoods of Detroit and barely interrupted city life, even when explosives were set off.

"Detroit is a fantastic resource," says Larry August, director and managing partner of Avalon Films, which has done mostly auto commercials in the past. "You have a city that was built for 1.8 million or 2 million people, and it has a lot fewer people than that (912,000 now, the Census Bureau estimates). That's the definition of a back lot. It's gritty, it's urban, and it's a very film-friendly city."

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