Monday, December 9, 2013

Film: Beyond Job Creation

By Jonathan Miller, Project Associate. 

I have written a couple blog posts on the film industry and focused on the efficacy of incentives. It is difficult to see a definitive correlation between incentives and the multiplier effect for both jobs and earnings. However, Georgia has fully embraced the film and entertainment sector through its incentive policy, and unlike other states, such as North Carolina, the incentives law does not have a sunset provision. The sunset provision in North Carolina (incentives terminate at the end of 2014) is already impacting the business. According to a film producer, “Films and shows that are being planned 18 and 24 months out are not looking at North Carolina because they don't know what is going to happen 18 months from now.” The certainty of the incentives in Georgia is supportive of local investments in film infrastructure, and it’s pretty incredible to witness.

I recently toured Fayette County and had the opportunity to drive over to Senoia, Georgia. Located adjacent to Peachtree City, Senoia is where most notably the TV show “The Walking Dead” is filmed. The filming activity and the popularity of the show has given rise to a cottage tourism industry complete with walking tours, trolley tours, and smartphone applications. Perhaps the most noticeable effect of the filming presence is the investment that has been made in the downtown area. Senoia Enterprises, a development company with close ties to Raleigh Studios, has rehabbed many of the buildings and stores on Main Street and created a charming streetscape that is used as a back lot for production. New homes are also being built with the look and feel of brownstones so they can be used for recreating scenes that take place in New York City, Chicago, or Philadelphia. Other homes have the feel of Savannah and Charleston. Such follow-on investment increases the visibility of the industry and has truly revolutionized Senoia.

I give this example to provide another glimpse into the film and entertainment sector to highlight the positive economic development effects that are not captured by job creation figures. Pinewood Studios, a well-known British studio company, is building a large studio complex in Fayette County (the property was annexed into Fayetteville in March). The studio has already booked a large budget production and will begin filming in January. The studio will not only have sound stages, but there will be an onsite Home Depot that will provide lumber and hardware to production companies at Pinewood and also other nearby studios (such as Senoia and Tyler Perry’s studio in Atlanta. The sales tax that will be generated from the endeavor will flow to the local jurisdictions, augmenting local budgets. The Pinewood facility will also have an educational component so that productions will have access to a skilled workforce. Again, it’s these “extras” that embody the ongoing impact of such projects.

Much of the argument against film incentives revolves around the transiency of both the filming process and the film workforce. From an economic development perspective the goal is to capture as much local investment and job creation as possible. Tying film production to your geography is the critical element as it works to sustain local investment. In Senoia, the investment in downtown sustains a relationship between the town, fans, and the studio. In Fayette County, the campus setting for not only production, but vendors and training as well, adds to the long-term value that the investment will bring to the community. While tax incentives may create the environment for being competitive for film, it’s often the fixed investment that will pay off in the long run.