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    #11
    Rockin the Boat
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    It's very tricky. Sure, it seems on the surface that you should just offer incentives and tax rebates and things to attract (or keep!) production in a state/municipality. But respected economists have crunched the numbers and it seems that it often does NOT make economic sense, in that you lose more through the tax discounts than you gain from the economic activity, such as it is. I know that this was a huge discussion for years here in Los Angeles - the constant talk of "runaway productions", but every time they crunched the numbers it just didn't make sense. Some productions have to shoot in LA for a variety of reasons, so you don't need to bribe them with tax rebates anyway, and overall it's just a loser. It's like the endless discussions about building stadiums to keep various football teams around, or bring them to the city - that pretty much never works out. The taxpayers end up shelling out a ton of cash and the rich football owners rake it in. It's a scam. Or offering some company tax relief for x number of years so they bring jobs - more often than not, the companies grab the cash and never deliver on the jobs. Scam, scam, scam.

    Bottom line, you need to really do your math when you offer economic incentives to get production (or companies to relocate, or teams to move etc.). It's not so simple. Very, very often, it just doesn't make sense. Now, for some locations it probably does, but it all needs to be carefully calculated.

    But I also agree that there are many ways in which you can encourage or discourage any business. Some cities or states are just business unfriendly because of onerous regulations or fee structures, permits and so on. LA is not particularly friendly from that point of view, at least when it comes to small or indie productions. A big film production company can afford all that, it's pocket change to them, but for tiny indies it's a matter of life and death, i.e. start a production or not. I think it should be the other way around - you should sock it to the big producers who can afford it, and let the little guy slide by with fewer obstacles - instead it's the other way around, where the big guys get all the discounts and the little guy gets killed (same with agricultural supports and so on - it's a general problem, not just the film industry).

    Ultimately, unless you know the whole economic picture, it's not so simple to just say "Colorado should/should not do this or that".


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    Senior Member Mike Krumlauf's Avatar
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    Quote Originally Posted by OldCorpse View Post
    It's very tricky. Sure, it seems on the surface that you should just offer incentives and tax rebates and things to attract (or keep!) production in a state/municipality. But respected economists have crunched the numbers and it seems that it often does NOT make economic sense, in that you lose more through the tax discounts than you gain from the economic activity, such as it is. I know that this was a huge discussion for years here in Los Angeles - the constant talk of "runaway productions", but every time they crunched the numbers it just didn't make sense. Some productions have to shoot in LA for a variety of reasons, so you don't need to bribe them with tax rebates anyway, and overall it's just a loser. It's like the endless discussions about building stadiums to keep various football teams around, or bring them to the city - that pretty much never works out. The taxpayers end up shelling out a ton of cash and the rich football owners rake it in. It's a scam. Or offering some company tax relief for x number of years so they bring jobs - more often than not, the companies grab the cash and never deliver on the jobs. Scam, scam, scam.

    Bottom line, you need to really do your math when you offer economic incentives to get production (or companies to relocate, or teams to move etc.). It's not so simple. Very, very often, it just doesn't make sense. Now, for some locations it probably does, but it all needs to be carefully calculated.

    But I also agree that there are many ways in which you can encourage or discourage any business. Some cities or states are just business unfriendly because of onerous regulations or fee structures, permits and so on. LA is not particularly friendly from that point of view, at least when it comes to small or indie productions. A big film production company can afford all that, it's pocket change to them, but for tiny indies it's a matter of life and death, i.e. start a production or not. I think it should be the other way around - you should sock it to the big producers who can afford it, and let the little guy slide by with fewer obstacles - instead it's the other way around, where the big guys get all the discounts and the little guy gets killed (same with agricultural supports and so on - it's a general problem, not just the film industry).

    Ultimately, unless you know the whole economic picture, it's not so simple to just say "Colorado should/should not do this or that".
    Well then from your perspective, what could Colorado do to bring productions here? I have to believe with the amount of people moving here from both Chicago and LA that its only a matter of time before something gives.

    Heres the movies I know shot here within the last 30 years

    Christmas Vacation - Shot Scenes in Frisco, Silverthorne and Breckenridge Colorado
    Die Hard 2 - Shot at the old stapleton airport and just east of the city
    Ladybugs - Denver, Littleton, and Denver Tech Center
    Dumb & Dumber - Breckenridge and various other places east of the city as well as the Stanley Hotel in Estes Park (that hotel could care less given their shinning fame)
    Things to do in Denver When You're Dead - Shot parts in Denver, but i think most of it was LA pretending to be denver
    Imagine That - Eddie Murphy kids film which filmed entirely in downtown denver and some various locations along front range
    Darling Companion - Denver and Telluride
    The Hateful Eight - Shot in Telluride near Mountain Village.

    I know there are others, those are the ones that come to mind right away. I really wish Kubrick had shot the shinning here instead of london and Oregon. I love how the stanley markets themselves off that film when it was the inspiration for the book and sadly the location of that crap tv movie version they did in the 90s.
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    #13
    Senior Member puredrifting's Avatar
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    If you notice, a lot of the states putting out the huge tax incentives dont have much else to fall back on as far as industry. New Mexico? Not a lot of other big industry in the state besides Sandia/Government stuff.
    I've shot in Colorado a few times and it seems like the local Denver/Boulder economy is diverse (all of those corporate HQs out there!) and I agree, the film tax incentive things often don't pencil out,
    which is why you see production tax incentives moving east. 25 years ago, it was Arizona, then New Mexico stole all of that business, then it moved to New Orleans, Carolinas, then down to Atlanta.
    That means for most of the states offering the big tax breaks, they don't renew it past a few years. Why? Probably because it doesn't make financial sense.

    Also, Colorado or at least large swaths of it have become California with stupid Californians moving in like locusts and completely upending the local real estate and job markets. I say this as a
    Californian, the California exodus is a like a Cancer on all of the surrounding states in the west, dumb Californians flee this state and then completely mess up the areas they move to, socio-economically
    and politically. My in laws just fled California for Boise and up there, native Idahoans HATE Calfornians and I don't blame them, in laws got their Idaho license plates as soon as humanly possible
    to avoid being labeled. Think about, if Colorado has been overrun with Californian refugees, Californians hate film production, we are the state where normal citizens regularly sabotage and
    hold productions hostage by noise and picture pollution (at leat in LA and SFO) unless they are paid off by the production. So if those people are in Colorado, they would discourage production
    coming there. Film production, to a normal neighborhood, as we all know, is a PITA for the locals.
    It's a business first and a creative outlet second.
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    When you really look at the tax incentives, you can see why they never really come out with a break even or better for the state. Zero personal income tax for the owners? Building a great big sound stage and renting to productions for peanuts (if even that). Building editing areas to try and bring people here to finish the shows, which has never happened. It's just a completely stupid idea, but they were "promised" all kinds of economic improvement from the state and production companies.

    The one company that did come in started off by begging for free labor, begging for free artwork to decorate the sets, free this and free that. Trying to charm every business they could with promises and "you'll get in the movies" crap. Maybe in another tens years there will be something built out of all of it, but I bet the tax break only last for 10 years and they will be gone by then. Yes I'm really jaded on the whole thing, especially when I know there are plenty of people that could do the work locally, and they still bring in most of the crew.


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    #15
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    It's not impossible to get economic benefits from film productions. But you need to have the infrastructure already there, or willing to relocate permanently. It's not even primarily about physical infrastructure like sound stages, lots, and so on, but the talent and social infrastructure. I know a little about it, because back in the early 90's I was a consultant to production companies in Eastern Europe. It was pretty educational. I'll give you two contrasting examples: Lodz, Poland and Prague, The Czech Republic (Czekoslovakia back then). Lodz, Poland had a ton of physical infrastructure, as it was the center of the Polish filmmaking industry - sound stages, lots, production office space and so on. It also had a lot of talent - crews, DP's, actors and so on - the famous Lodz Film School was located there, and since there was film production in Lodz for decades, they had it all in that sense. Now let's take a look at Prague, Czekoslovakia - it had the famous Barandov Studios, and so the infrastructure was also there, just like in Lodz - stages, office space, crews, actors etc.

    I produced films and consulted in both Lodz and Prague. They had pretty equivalent infrastructure physical and talent-wise, with perhaps Lodz having somewhat of an edge here. As far as laws, permits etc. - all more or less equivalent, with Lodz perhaps being a bit easier. But getting productions going, and bringing in film production from abroad broke very differently in Lodz vs Prague - it went pretty much 95% Prague, and 5% (at best) to Lodz. Here are the factors that were responsible for the difference.

    1) Physical assets - LOCATIONS. Lodz is not a very attractive city. Prague is beautiful, called the Paris of the East, with amazing architecture. And Prague is close to all sorts of physical location assets, such as forests, lakes etc. Lodz is not quite as well situated, you have to travel a bit to get to those type locations. If you are shooting a film, Prague can stand in for a ton of amazing places - Lodz, not so much. Right there, Lodz loses out hugely.

    2) Availability of high quality hotels and accommodations - Lodz had none really. The "best" hotel was the Grand Hotel - and it wasn't particularly grand. No great restaurants. It's not a tourist facing city, so it's not attractive to hang out there. That's a HUGE factor. Where are you going to put your stars in and your crew accommodations? You need high quality hotels - without that, you are seriously losing out.

    3) Social infrastructure - the key factor. Lodz was a working-class city. Gray city with gray people, working class. Prague was a much more intellectual, artistic, international city - if you are going to spend months in a city, where would you rather do so? And if you are going to relocate - where would you relocate to? It's elementary. Nobody is moving to Butt-F*** Sticks. Vancouver - yes. Toronto yes. Nowheresville - no. Lodz - no. Prague - yes. At best, a Nowheresville location might attract an occassional hit-and-run production if massive financial incentives are offered, but as soon as they wrap up, they don't stick around - it's a net financial loss for Nowheresville. People are happy to spend time in Paris, Prague, Rome, wherever. But Butt-F*** Nowheresville? Nope. You want to live in a fun-loving good quality of life place - tens of thousands of Americans and Europeans went to live in Prague. Nobody relocated to Lodz. And fun people attract fun people and artistic people and actors, and directors, and people with money and soon businesses cater to them with great restaurants and amenities and that causes more attraction and you get a virtuous circle. Lodz can offer all the financial incentives in the world, but nobody wants to live there (OK, that was back in the 90's, from what I hear, things are changing in Lodz these days, it's becoming hip). In a nutshell - where do you think fun-loving artistic, free-spirited folks want to live? A place where there's a church on every corner, or a bar/club/restaurant/fun place on every corner? And you know the kind of people most film folks are - usually not the button down straight laced ones. No judgment, just stating facts.

    4)Red Tape and Costs - many production companies are willing to sustain huge costs and difficulties, because, well, there's only one Paris, one NY, one Rome. But for many other productions, it gets to be too much. It's not that NY is not attractive - it's that they make life hell for production companies. So even with all the social attractiveness of NY or Paris or Rome, or LA a ton of productions just can't hack it, so they re-locate. But they'll still re-locate to relatively socially attractive places, like Atlanta Georgia - nobody is going to relocate to Nowheresville. Atlanta is fun, and has decent quality of life. Nowheresville has nothing.

    So really, financial incentives don't work for the most part. You want people to stick around - make it attractive. This is where I find puredrifting's remarks interesting. He complains about Californians coming to other states and destroying their political/social environment. It's impossible to discuss this without coming close to discussing politics, so I'm going to talk about it in a veiled and roundabout way, and keeping things vague so as not to go against the TOS on these boards. If you look at who is moving out of California, it's not really so called "liberals" - there just was a huge article in LA Times, about how the folks who leave California for political/social reasons are overwhelmingly conservative - which makes sense, if you think about it. California is (at least the cities) mostly liberal socially/politically - if you are a liberal, why would you move to a conservative state for political/social reasons? You may for economic reasons, but the only people fleeing CA for political/social reasons and re-locating to red states are conservatives. So I find this "dumb Californians flee this state and then completely mess up the areas they move to, socio-economically and politically" a little strange. Or this: "My in laws just fled California for Boise and up there, native Idahoans HATE Calfornians and I don't blame them" - this just doesn't compute. A few months ago (or maybe last year) there were a series of articles in LA Times about how there is a movement of Californians who move to Idaho - all hardcore conservatives, huge numbers of white retired cops who find CA liberalism anathema, and who picked Idaho to create little enclaves where guns and conservatism rule - super politically conservative - I'm not going to tell you the other stuff these folks believe, because I don't want to get political. All I'm saying is that you don't have film industry folk, who are mostly liberal, who are going to invade Idaho, to take advantage of the nice liberal atmosphere. I think Idaho is pretty safe from liberals and fashion hipsters and "San Francisco values" immigrants. Which... also gives you a clue as to where film folks would relocate - to places that value diversity, free-thinking and an atmosphere that's not big on judgmetalism and being in other people's business and personal lifestyle choices. The reality is that artists - and film folks who enjoy a liberal lifestyle - naturally gravitate to places where they're welcome and can live without political/social trouble. That means if you want to attract talent - you gotta have a place that has an attractive social infrastructure. And the only way to build an industry is to attract talent - whether that's engineering, software development, art, film, or anything else. It's people who are the biggest asset - not buildings or taxes... of course up to a point, you can't red-tape and tax people to the point where they just can't hack it anymore. So the balance you have to strike is "be business-friendly" and "socially attractive so people want to be there". There's a reason why the biggest power houses in science, computers, biotech and art are located where they are - and that makes the economies of those places/states stand out. As I don't want to discuss politics, you can figure out which places are which for yourself.


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    Senior Member puredrifting's Avatar
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    Quote Originally Posted by OldCorpse View Post
    ...
    So really, financial incentives don't work for the most part. You want people to stick around - make it attractive. This is where I find puredrifting's remarks interesting. He complains about Californians coming to other states and destroying their political/social environment. It's impossible to discuss this without coming close to discussing politics, so I'm going to talk about it in a veiled and roundabout way, and keeping things vague so as not to go against the TOS on these boards. If you look at who is moving out of California, it's not really so called "liberals" - there just was a huge article in LA Times, about how the folks who leave California for political/social reasons are overwhelmingly conservative - which makes sense, if you think about it. California is (at least the cities) mostly liberal socially/politically - if you are a liberal, why would you move to a conservative state for political/social reasons? You may for economic reasons, but the only people fleeing CA for political/social reasons and re-locating to red states are conservatives. So I find this "dumb Californians flee this state and then completely mess up the areas they move to, socio-economically and politically" a little strange. Or this: "My in laws just fled California for Boise and up there, native Idahoans HATE Calfornians and I don't blame them" - this just doesn't compute. A few months ago (or maybe last year) there were a series of articles in LA Times about how there is a movement of Californians who move to Idaho - all hardcore conservatives, huge numbers of white retired cops who find CA liberalism anathema, and who picked Idaho to create little enclaves where guns and conservatism rule - super politically conservative - I'm not going to tell you the other stuff these folks believe, because I don't want to get political. All I'm saying is that you don't have film industry folk, who are mostly liberal, who are going to invade Idaho, to take advantage of the nice liberal atmosphere. I think Idaho is pretty safe from liberals and fashion hipsters and "San Francisco values" immigrants. Which... also gives you a clue as to where film folks would relocate - to places that value diversity, free-thinking and an atmosphere that's not big on judgmetalism and being in other people's business and personal lifestyle choices. The reality is that artists - and film folks who enjoy a liberal lifestyle - naturally gravitate to places where they're welcome and can live without political/social trouble. That means if you want to attract talent - you gotta have a place that has an attractive social infrastructure. And the only way to build an industry is to attract talent - whether that's engineering, software development, art, film, or anything else. It's people who are the biggest asset - not buildings or taxes... of course up to a point, you can't red-tape and tax people to the point where they just can't hack it anymore. So the balance you have to strike is "be business-friendly" and "socially attractive so people want to be there". There's a reason why the biggest power houses in science, computers, biotech and art are located where they are - and that makes the economies of those places/states stand out. As I don't want to discuss politics, you can figure out which places are which for yourself.
    If you look at who is moving out of California, there is a contingent who is moving for political reasons, but there is a much bigger group who is moving out because the value equation of living in California is idiotic. I have several friends who have moved or are planning to move out because they want to own a home and never will be able to afford it in California. I have several others who have moved out because of their business, California is the least business friendly state in the union. As far as my in laws, they definitely moved to Idaho for political reasons, they are conservative but they were still not welcomed at all by the locals as Californians, largely because the local residents are now quickly being priced out of their own real estate market and there is a lot of well founded resentment against the people who have largely inflated their real estate market, pricing them out. My little brother and his wife, both have decent jobs, he is a maintenance manager for a Pharma company, he is fleeing because they had a teenager, it was the three of them in a two bedroom condo, then they had twins and now they are really, really space challenged and cannot afford buy anything in California other than the ugly desert, they would rather move to Idaho, Carolina, Atlanta and have a nice home in a nice neighborhood.

    I was surprised spending a week in Idaho this Summer, it's reputation is ridiculously skewed. We saw lots of people of color, liberals, gay people, talked with a lot of them on the hiking trails and downtown Boise while we were there.
    Some native Idahoans, some transplants. It's like Utah, last time we visited a few years ago, the mayor of SLC was a Jewish Lesbian, Jackie Biskupski, these other places aren't what people always think.
    I think Idaho's reputation as a white conservative bastion is largely anectdotal based upon what I saw and experienced. It's no Marin County or Berkley of course, but Idaho isn't what people think it is, or at least Boise wasn't. At all. I've
    been in towns in California that were more white, uptight and conservative. Perhaps the smaller Idaho towns are? I don't know because I haven't spent any time in those smaller towns. I would think film people wouldn't move to a place like
    Idaho because there essentially is zero film industry there, not because of politics.

    I do agree with your overall take though about business friendly vs. socially attractive, that makes sense.
    It's a business first and a creative outlet second.
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    #17
    Rockin the Boat
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    I would think film people wouldn't move to a place like Idaho because there essentially is zero film industry there, not because of politics.

    I think this reverses cause and effect. Because why isn't there a film industry in Idaho? As I keep pointing out, the biggest reason is due to social atmosphere, which in turn is due to politics. So of course film people don't move there - it's not a place where they'd feel particularly comfortable. I won't go into details, because again, that would get into politics, but while you are right that there are more "relaxed" places (I'm using a non-political term - "relaxed") in Idaho, it's the same as most places, the divide is stronger between big city and small city/rural rather than between states (as you said "towns in California that were more white, uptight and conservative" - I agree 100%) - but at the end of the day, it's still a matter of degree, the overall mood is still clear - just look at how various states vote in elections (and not just presidential)... I think it's pretty clear that overall CA is far more liberal and Idaho is pretty much almost extreme the other side (see election results!). Now, I don't want to make it too much about politics, business friendly is super important - and yes, I agree, CA is horrible as far as business friendliness, honestly it's one of the worst things about trying to make it here as a businessman.

    Regarding the economic emigration from CA - I hear you. It's definitely true. Affordability in CA, especially housing, is some of the worst in the whole country. And I can see how that angers people in other states when Californians come and drive up the costs, real estate and so on - but to be completely fair, is it really the fault of the Californians? Ask yourself why are the costs of living so insanely high in a lot of CA, especially the cities (San Francisco is just mental), but that's also true of the rest of the West, Seattle, Portland and a lot of the East - NY, Boston, and so on. The biggest reason is: demand. People with money, people with talent, people with ambition and drive, people with ideas - and just plain middle of the road people - keep coming and bidding up rents and homes and real estate and costs. Too much demand. There's some wrong-headed policies as well - business unfriendliness, including against developers, makes building more expensive so it doesn't meet demand. But no matter how much you build, there is still too much demand - people trek there or want to be there despite all the terrible business unfriendliness. Which makes us ask: why do people want to live in LA, NY, San Francisco etc.? Oh, you say it's because businesses are there. But the businesses are there because the people they need to hire - the talent - is there! So it's again reversing cause and effect. It's not like a hot biotech company is going to plump down in Appalachia - people don't want to live there. So business goes to where the talent is. Including the film industry. It's about the people - again, and again. So why do people want to live in NY, LA, San Francisco and so on? Like I said, for whatever reason people like to do what they like to do without scolds getting into their business telling them how to live or criticizing - and even criminalizing - their lifestyles and life choices. Look at where the pot legalization first took root and why - places that were less likely to tell you that what you choose to do with your body should be a criminal matter (as long as you don't hurt others)... live and let live.

    So now some people are getting priced out of CA - and they come to Idaho, and still have more money than the locals and the rents go up. What would be better, if only poor Californians came to Idaho? Rents going up, costs going up is just a sign that demand is going up. Can't blame the Californians - "damn you Cali guy, why do you have so much money, why are you so successful, you should be poor so you can't afford housing and the rents stay low!".

    And even the whole taxes and regulations issue is complicated. If these "liberal" states and cities are so business unfriendly, why do businesses keep going there, and why are these states the most successful economically? California, with one of the worst business unfriendliness scores is so successful economically, it's like a super power just by itself:

    https://en.wikipedia.org/wiki/Economy_of_California

    The economy of California is the largest in the United States, boasting a $3.0 trillion gross state product as of 2018.[9] As a sovereign nation (2018), California would rank as the world's fifth largest economy, ahead of India and behind Germany.[10] Additionally, California's Silicon Valley is home to some of the world's most valuable technology companies, including Apple, Alphabet Inc., and Facebook.[11] In total, over 10% of Fortune 1000 companies were based in California in 2018, the most of any state.[12]

    I mean, that's just insane. It's so insanely successful economically, so many successful people want to be here, housing costs and living costs are sky-high. It's supply and demand, baby. Costs are low in B-F*** Sticks, but so what - there's no demand and young people with any ambition or talent are leaving in droves... and coming to the super successful amazing lifestyle places of desirability and driving up the demand even more. And so it goes. Now the final piece of the puzzle is taxes and regulations - guess what, civilization costs money. The lowest tax places are not necessarily desirable - want a tax and regulation heaven (as in none), hey welcome to Somalia and most third world hellholes. In contrast some of the most high tax and regulated places are some of the most advanced with the highest standards of living (think Northern Europe). The key is to find a balance - CA has gone way too far in being actually business unfriendly. It's one thing to be "well-regulated" and another to be killed by red tape. Unfortunately, CA is way, WAY too up there in la-la land - and I'm not going to get political, but it's gonna soon affect the desirablity of the place - just look at the homeless situation, where due to policies we have everybody and their uncle come to CA from all over the country to leech the system built by overly liberal policies. CA may yet kill the golden goose. The golden goose is desirability - and if you lose that, you lose everything... which is slowly starting to happen... who wants to live where you can't walk the streets because people are defecating on sidewalks and sleeping in tents. And make no mistake, it's CA policies that are responsible - and here I stop, because I don't want to get political... but yep, it makes me mad.

    Ideal combination: "business friendly", "well (not over) regulated", "socially desirable" "sensible law and order" - if you have this, your city, state, country etc. will be super successful in attracting ALL kinds of industries, including the film industry.


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