Film tax cuts boost Ann Arbor business

BY JENNA SIMARD
Daily Staff Reporter
Published October 5, 2010

Since becoming a law in 2008, the Michigan film tax incentive has received significant attention from both supporters and opponents.

With increased sightings of celebrities around the state, many Michiganders have been questioning whether the law — which offers a 40-percent tax rebate to companies that shoot films in Michigan — has actually provided the state with tangible benefits in exchange for the tax break.

But Jim Burnstein, screenwriting coordinator in the University’s Department of Screen Arts and Cultures and a veteran of the film industry, has only positive things to say about the incentive.

“It’s working beyond anybody’s expectations” said Burnstein, who is now on the Michigan Film Office Advisory Council. He added that it creates a lot of jobs directly in film production, and that the most important jobs are the ones that don’t get measured by the critics’ reports.

According to Burnstein, in 2009 film crews in Michigan spent 2,000 nights in local hotels. Local restaurants, catering businesses and t-shirt companies have also had increased sales.

Jerry Kozak, one of the founders and owners of the Ann Arbor T-shirt Company, said he saw his company’s sales increase within only a few months after the company started two years ago. The company has had a number of films place large orders, which he says has had more than just an economic benefit.

“Outside of the money itself, it’s also given us some credibility since we are a young company, only two-years old,” said Kozak.

The company has provided shirts for movies such as “Stone” and “Sunset Boulevard,” Kozak said, adding that this summer it also provided $6,000 worth of shirts for “Scream 4” and did a personalized order for director Wes Craven.

Michelle Begnoche, the communications advisor for the Michigan Film Office, said that this year’s in-state production expenditures will be more than $300 million from more than 40 films. She added that in 2007 the state of Michigan produced three films with only $2 million spent in production.

As more production companies are beginning to see the benefits of shooting in Michigan, the quality of the films produced in the state is increasing as well. Burnstein said that five films shot in Michigan were entered into the Toronto Film Festival last year, three of which were shot in Ann Arbor.

The tax incentive is not only beneficial to the state economically but also socially. Both Begnoche and Burnstein emphasized the gravity of Michigan’s “brain drain” and hope the increased film production will keep young people in the state.

“When we passed the law, migration of students to L.A. and New York stopped,” Burnstein said. “It’s got a lot of young people to want to stay here.”

Michigan’s increased screen time has also helped its morale, said Burnstein. Troubles with the auto industry prior to the passing of the law caused many Michigan residents to lose confidence in their state. Burnstein said that the film industry may have helped reverse that effect. He said he believes Clint Eastwood’s movie “Grand Torino,” which was filmed in Detroit, was a significant turning point that helped instill a sense of pride in Michiganders.

“A perception of ourselves began to change with all of these bright lights,” said Burnstein.

Ann Arbor has been a hot spot for Michigan film production. Stars such as Michael Cera, Clive Owen, Hayden Panettiere and Hilary Swank have all been to Ann Arbor to film since the law passed.

“Answer This!” a comedy filmed this year in Ann Arbor and which will be premiering at the Michigan Theatre on Friday, has even deeper roots in this city. It was directed by University alum Chris Farah. Farah said that it was his dream to film here in Ann Arbor and the tax incentive made it possible.

“Without the incentives, we really wouldn’t have been able to make it here,” Farah said. “It’s pure economics.”

Farah added that though Michigan is now a competitor with Tinseltown, it still lacks the cinema infrastructure of Los Angeles. His team had issues finding a certain crane for his cameras, which he said could have been found within minutes in Hollywood.

Though Michigan isn’t quite Hollywood, these incentives have certainly aided many film producers. Begnoche said that films can receive up to a 40-percent credit if they meet certain qualifications and hire enough Michigan residents to work for their films.

“You need to have that kind of incentive to come shoot in Michigan,” said Farah.