The North Carolina film industry is in serious danger if the state’s film tax incentive program is allowed to expire at the end of this year as currently scheduled.
As the debate heats up prior the next session of the North Carolina General Assembly in May, we caught up with Aaron Syrett, director of the North Carolina Film Office, last week to get to the heart of the issue, how we got here, and what the future holds.
Read on for our full interview in Aaron Syrett!
“We’re primarily a marketing agency,” Syrett said, describing how the NC Film Office works. “Our job is to market the state of North Carolina and its infrastructure to the production industry. On top of that, we’re liaisons on behalf of the state of North Carolina.
“Once they (productions) are here, we handle day to day issues. We’re really involved in the project from pre-development all the way until they wrap principal photography in the state. Whether it’s finding locations or permitting, it could be really anything, we handle so many different things on a day to day basis.
“On top of that, we administer and handle the North Carolina Film Incentive. We’re in charge of marketing that as well, and pushing that forth is one of our main agenda points.”
For those who are unaware, we asked Syrett to review a brief history of incentive program and its history up to now.
“The North Carolina Film Incentive has been in the state since about 2006 when we first started out a 15 percent incentive,” Aaron explained. “We evolved our system until we changed it in 2011 to what it was now, which is a 25 percent totally refundable credit on goods, services, and compensation for things bought, sold, and rented in North Carolina.
“There is a $20 million cap, meaning a production has to spend a minimum of $250,000 and we will qualify the first $80 million of their spending, but once they go over the $80 million, we don’t qualify anything beyond that.
“It has a sunset, which means when the law is set to expire, and that’s what we’re facing right now. The law is set to expire on January 1, 2015.”
Syrett also talked about ongoing efforts to extend the sunset, and why those efforts did not start during the last General Assembly session.
“What happened was, we had a whole bunch of new legislators get into office (during the last NC General Assembly session), and in light of that, it wasn’t a good time for us to put film out there,” he said. “It would not have been a good idea.
“We’re going into this legislative session that starts in May to hopefully get the sunset extended. Our main goal would be to get rid of the sunset all together, eliminate it.
“Worst case scenario, if we’re not able to make that happen, what will happen is you’ll see the industry pretty much go away. You’ll see it go away over night.”
Syrett echoes industry professionals throughout the state who are hoping that the sunset expiration is somehow extended during the upcoming General Assembly session.
“The legislative session starts in May,” he said, “and it’s a short session, so hopefully it will be over by July. We don’t know when they’ll vote, but the sooner the better obviously.
“Even though the session starts in May, advocacy is already taking place. The industry has been very involved in advocating for this change. There’s a study being done by Dr. Rob Handfield at NC State University to really measure the supply chain of how this industry impacts North Carolina.
“There’s an advocacy group called the North Carolina Production Alliance, and if people are interested in joining that and contributing efforts, they can go to ncproductionalliance.com. It’s in its infancy stage, so I would tell your readers to get involved and be patient with this organization as it starts to get off the ground, as a lot of the information from the industry will come through this group.
“It’s open to anybody in the industry, anybody who services the industry, anybody who appreciates the industry.”
What detractors who oppose the incentive program sometimes forget is that North Carolina has a rich history within the film industry and generations of families who have dedicated their lives to it. The recent boom in NC-filmed productions is a direct result of the incentive program, which is very successfully doing exactly what it was designed to do.
“The industry was really suffering in North Carolina starting about 2006 and 2007, and primarily most of production was going to Wilmington and Charlotte and the Piedmont area” Syrett recalled. “The idea was to grow this industry throughout the state, grow it smartly; not too fast like you saw in Michigan. We want to be responsible.
“What you saw was the Charlotte market really take off, you saw activity in the Piedmont, Winston-Salem, Greensboro areas take off, you saw Asheville grow, and then also the Raleigh-Durham Triangle area starting to see some action too. As we start to get strong, we start to diversify and we’re seeing across the state filming going on all over, and that’s our goal. We want to be able to build smartly, and build an infrastructure statewide.”
Despite the undeniable success of the incentive program, if it goes away, Syrett says the film industry will most certainly follow.
“You have Georgia and Louisiana with really strong incentives,” he said, “and those two communities didn’t really start out with an industry like North Carolina has had for the past 30 years. Louisiana and Georgia have recently built their industries, and the reason why they’ve been able to do it is with these monster incentives of 30 percent and 35 percent.
“We want to keep our workers in North Carolina. We’ve got three generations of people (in North Carolina) who work in this industry. There are fathers and mothers who work in this industry, and now their kids are, and their grandkids are starting to enter this industry. We’ve built up a legacy in this industry, and in the bad times, they stuck with North Carolina when we were losing our market share to other states and to other countries.
“We are in such a great space to start grabbing some of our market share back that bringing negative public policy around the film industry would be detrimental.
“It’s about creating North Carolina jobs and growing North Carolina jobs in a really creative knowledge-based industry.”
We asked the director of the state’s film office if he thinks the incentives will be extended during the next legislative session.
“I’m cautiously optimistic,” Syrett responded. “I think we have great support. I also know that we have a lot of work ahead of us. North Carolina has a lot to lose.
“I remain positive, and those advocating for this industry are working diligently and engaging the right people.”
So, how can supporters of the North Carolina film industry get involved and help save the incentives?
“They can write and call their House and Senate members, and just be positive about it and tell them your story,” Syrett urges. “Be polite and kind. Don’t be combative. I think if you take a positive attitude towards it, the message will get through much better.
“The Production Alliance will be the main tool for the industry as far as advocacy. The North Carolina Film Office is part of the Department of Commerce, so we’re not lobbyists, but obviously we’re in the middle of this thing, working with the industry lobbyists and helping push this message and continue to be part of the conversation.”
Will hit productions like Homeland, Sleepy Hollow, and Under the Dome leave the state if the sunset happens as scheduled?
“I think that’d be safe to say,” said Syrett. “You have to look at where the story is going and their bottom line, how many more seasons they plan to go. That all plays into their decision process. If they did stay, what you wouldn’t see is new productions start to happen in North Carolina. That would end immediately. At the rate we’re getting productions right now, we’re super successful, and you would see that stop immediately.”
The biggest irony of the film incentive debate in North Carolina is the fact that the program has proven itself as a clear success in accomplishing just what it was developed for.
As Syrett explains, “2012 was our best year, and 2013 was our second best year. If we keep going at this rate, this year will be as good if not better than 2013. It’s going to be hard to beat 2012, the year we had Iron Man. That only comes along once in a lifetime.
“We had The Hunger Games, Iron Man, Safe Haven, and Under the Dome. They’ve seen success. People are starting to remember North Carolina. They always knew about it, but they just forgot about it for a while, and now they’re starting to remember the level of professionals they can get here. It makes making a movie or television series much less expensive just because of the work ethic they’re going to get here from the locals.”
Though no one really wants to think about it, we had to ask what happens if the sunset remains unchanged.
“I don’t know if we would get another bite at the apple,” said Syrett. “It is hard to say. We are cautiously optimistic. We’re preparing for the worst, but expecting the best.”
On a much more positive note, if the sunset is extended or eliminated all together, the future will see productions expanding into areas of the state that are also ready for their closeup.
“We want to continue a smart, steady growth throughout the state, and continue our marketing efforts,” said Syrett. “There are a lot of states who don’t understand the industry well, and they have an incentive, but they’re not in it for the long haul. They don’t understand the benefits of growing a smart industry, and I think that’s what we have done.
“I think North Carolina’s incentive is not the most aggressive, but I will tell you it is the smartest.”
If you would like to join the North Carolina Production Alliance, click here.
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