Lights. Camera. Economic stimulus?

But the company that has taken over the second floor of that building will be pumping millions of dollars into the state and local economy over the next few months. Its payroll includes a two-time Academy Award winner. And just one year ago, it had no intention of bringing its business to Michigan.

The movie “Betty Anne Waters,” starring Hilary Swank, will start its seven-week shoot in Ann Arbor on Feb. 17, though its production crew has been in the area since November and will likely stay until the end of April. The film is one of many that have flooded into the area in recent months, thanks to the passage of the Michigan Motion Picture Incentive Program. And with much of Michigan’s economy continuing to crumble, the face of the state’s quickly growing film industry may start to look less like short-term, converted offices and more like a Midwestern Tinseltown.

BIG REBATE, BIG NAMES

The Michigan Motion Picture Incentive Program took effect April 1 after passing unanimously in the House of Representatives and 37-1 in the Senate. It states that a film that spends at least $50,000 in the state can receive up to a 40 percent tax credit on Michigan cast, crew and production expenditures (with the exception of out-of-state crew members) and an extra two percent rebate if the film is set in one of 103 “core communities,” including Ann Arbor. The program is one of the most aggressive in the country to date.

With the auto industry floundering and an estimated $1.5 billion budget deficit heading into the new year, Michigan may not seem in the position to offer up to a 42 percent tax rebate to film companies that won’t be permanently funneling revenue into the state. But proponents of the program say it’s a way for Michigan to quickly diversify its economy in a time when revitalization is badly needed.

According to Jim Burnstein, vice-chairman of the Michigan Film Office Advisory Council, film revenue was about $4 million in Michigan the year before the incentive was passed.

In just nine months after the initiative was enacted, the state earned an estimated $100 million in production revenue, Michigan Film Office CEO Tony Wenson said.

“The film business is one that you can see immediate results — and we are,” Burnstein said. “Since the law was passed in April, it’s the equivalent from going from 0 to 100 miles an hour.”
After the initiative passed, Michigan played host to movies ranging from big-name blockbusters like Clint Eastwood’s “Gran Torino” to indie films like “Cherry,” filmed on the Kalamazoo College campus. And the names of actors and actresses who filmed in Michigan read like a guest list at an A-list Hollywood soiree.

Diane Lane. Drew Barrymore. Christina Ricci. Adrien Brody. Kim Cattrall. Sean Astin.

But Michigan isn’t alone in luring stars and film equipment away from Los Angeles. Michigan’s initiative followed similar plans in states like Louisiana and New Mexico, which both have 25 percent tax credit programs and are considered to have two of the country’s most successful fledgling film industries. Louisiana served as the backdrop for 80 films in 2008.

Before tax credit programs were implemented, the high cost of filming made it difficult for independent producers to shoot in the United States.

Producer Philippe Martinez said he often filmed in Canada and Eastern Europe because of the lower cost of production. But Martinez set up shop in Grand Rapids from August to October to shoot the $4.8 million thriller “The Steam Experiment,” a story about a scientist (Val Kilmer, “Alexander”) who takes six people hostage in a steam room until the local newspaper agrees to print his global warming theory.

Now, with multiple states offering tax rebates, there are more opportunities to shoot in the United States but the difference between states’ rebate percentages is minimal when deciding on a location, Martinez said.

“It’s not like, ‘How much would I save compared to another state?’ ” he said. “It’s more like you don’t even come to the state, as an independent producer, shooting somewhere where there’s no tax breaks.”

Even with bigger-budget and less price-sensitive movies, choosing a state in which to film requires a mixture of what makes the most economic and creative sense. Producer David Permut had two films slated for production in early 2008 — the $60 million film “Youth in Revolt,” starring Michael Cera (“Nick and Nora’s Infinite Playlist”), and “Prayers for Bobby,” a Lifetime movie starring Sigourney Weaver (“WALL-E”). Both films were set in northern California, but Permut had plans in early 2008 to shoot“Youth in Revolt” in Oregon and “Prayers for Bobby” in Alberta, Canada.

As soon as the Michigan film incentive passed, though, Permut moved both his films to Michigan — and part of the “Youth in Revolt” shoot to Ann Arbor.

ANN ARBOR’S LEADING ROLE

The potential future economic impact of the “Betty Anne Waters” crew in Ann Arbor was first seen on a smaller scale July 28-31, when “Youth in Revolt” was brought downtown for four days of filming. The entire film was shot in Michigan, but mainly in the Royal Oak and Traverse City areas. Based off the C.D. Payne book of the same name, “Youth in Revolt” chronicles a sex-obsessed teenager’s quest to lose his virginity to a girl he meets on vacation.

A scaled-down, special effects-heavy crew set up at the corner of Liberty Street and Ashley Street to shoot the movie’s third act. The action sequence included a vintage Lincoln careening down a hill and crashing into the Obama campaign’s county headquarters, which was converted into a hot dog stand named Too Frank Sausages during the shoot.

“Ann Arbor saved us on this film, because quite honestly, one of our biggest challenges was to find an area geographically that we could create that stunt,” Permut said. “We actually even talked about shooting in a landfill at one point, trying to basically build our own mountain, which would have been really problematic. So believe me, Ann Arbor became very meaningful for us.”

Even in just a few days of shooting, Ann Arbor businesses benefited. Kay Seaser, account manager for the Ann Arbor Tourist Bureau, said Downtown Home and Garden sold sun hats and patio umbrellas during the shoot, and Sign-o-Rama printed signs for parking and set operations.
Cast and crew frequented restaurants like Fleetwood Diner, Sweetwater’s and Conor O’Neill’s.

“Typically, they would have caterers on site,” Seaser said. “But the second unit location manager who was here a month in advance, she said, ‘(Ann Arbor has) such great restaurants here — instead of bringing catering to (the cast and crew) every day, we’re going to give them a per diem and let them eat in the local restaurants.’ ”

Fleetwood Diner owner Andy Demiri estimated an increase in sales of at least 25 percent while the film crew worked around the corner — a lot of take-out was ordered and one night, Michael Cera even made a midnight stop.

A construction crew came to town to build the “Too Frank Sausages” façade for the fiery crash scene at least two weeks before the actual shoot. Demiri said by the end of the movie’s time in Ann Arbor, members of that crew were loyal customers, eating at his diner once or twice a day.

After “Youth in Revolt” left the city, others followed. Part of Drew Barrymore’s roller derby film “Whip It!” was filmed in Ypsilanti in late August. The cast members made Ann Arbor club Necto their late-night destination one Friday. Necto owner Scot Greig said the visit from Barrymore and about 20 other people was unexpected, and though he gave the group the club’s VIP room, they preferred to walk around the club and mingle with the crowd.

In mid-November, when an existing metro Detroit location fell through for the raunchy Rob Schneider comedy “Virgin on Bourbon Street,” the crew used Ingalls Mall on short notice.

The arrival of the “Betty Anne Waters” cast and crew marks the first long-term, major project to be filmed in the city — and the first time residents and businesses in Ann Arbor can truly evaluate the extended effects of the tax incentive program.

The movie, based off a true story, follows a woman’s attempts to prove the innocence of her brother, who was convicted of a murder he didn’t commit. She puts herself through law school and exhausts his appeals in hopes of proving him innocent.

“Betty Anne Waters” will be set in Massachusetts, and producer Andrew Sugerman said he considered filming in both Massachusetts and Rhode Island before deciding on Ann Arbor. Though the primary reason for shooting in Michigan was the financial incentive, Sugerman said he specifically found Ann Arbor attractive because the architecture in the city was similar to New England’s.

When filming starts in February, only about 20 percent of the film will be shot on campus, he said, with much of the movie set in a private home. He declined to name specific University or off-campus shooting locations.

“We’re not seeing that much exterior scenes and streets,” Sugerman said. “A large portion is in interiors. And the days we are shooting exteriors, it will be cold, so I don’t think it will be that much fun to watch for long hours.”

Sugerman said about 60 percent of the “Betty Anne Waters” crew will be brought in from out of state, especially for technical positions. The movie plans to hire local extras and possibly actors for some of the film’s smaller roles.

FILM STUDENTS SHUN L.A. AND STAY

The biggest piece of the Ann Arbor economy isn’t local businesses — it’s the University. And with the incentive, some students are finding opportunities to become a part of the state’s fledgling movie industry.
Burnstein, who also heads the screenwriting program at the University, said this is the first year that a significant number of Michigan film students are staying in the state after graduation instead of immediately leaving for Los Angeles to find work.

One recent graduate landed his first out-of-college job when Burnstein referred him to “Youth in Revolt” director Miguel Arteta, who was looking to hire a student as his assistant while he and Cera made changes to the script.

“After a few days, (the student) says to Miguel, ‘Is it okay if I say something? I sort of got an idea,’ ” Burnstein said. “So he tells him, and it’s great. It’s in the script. This kid who’s three days out of school has now played a vital role in the end of the production.”

For other students in the University’s Screen Arts and Cultures program, the rebate money has allowed them a larger budget to make independent films. This summer, LSA senior Eddie Rubin and University alum Debashis Mazumder co-produced the film “Art House,” about a co-op of art students who risk getting evicted if they don’t prove they can be productive artists.

“Art House” was shot entirely in Ann Arbor, mainly at Black Elk Co-Op House near the corner of Washtenaw Avenue and Hill Street and at Sigma Alpha Mu fraternity on Oxford Street.

Although the majority of the actors and crew came from in state, the film hired the lead actors, production designer and sound crew from outside of Michigan. Rubin said that if not for the tax incentive, the film wouldn’t have had the money to approach talent like Iggy Pop (from Iggy Pop and the Stooges) or Tim Brennen (“Hancock”), who both had sizable roles in the film.

A Farmington Hills native, Rubin said he plans to stay in Michigan after graduation to continue his film work. Having founded the production company Deep Blue Pictures with University alum Danny Mooney in 2007, Rubin said he has recently been talking with several out-of-state producers, directors and investors to fund scripts and get films into production.

“We’re trying to really bring people back,” Rubin said. “A lot of our friends who have moved up to L.A. and New York are continually coming back to Michigan for work and auditions, and we’re trying to set ourselves up as one of the premier production companies here in Michigan.”

Building the fledgling industry

While the immediate results of the initiative are encouraging, Michigan has some work to do to reap the maximum benefits.

The state’s inexperienced workforce and lack of permanent infrastructure present problems to filmmakers looking to shoot here. Without sound stages and studios in the state, post-production must happen elsewhere after a film wraps up shooting in Michigan. A lack of studios also makes it difficult to shoot in the winter, preventing the industry from providing a year-round source of revenue.

Other states with successful tax credit programs have followed up by developing infrastructure — Louisiana now has six soundstages and studios in its three largest cities. Michigan started to take that next step in early January, when the Michigan Film Office announced plans to build three production studios in the state.

“The Steam Experiment” producer Martinez said the program’s success in Michigan can only be evaluated after a minimum of five to 10 years, after investment opportunities start to take shape and the reputation of the state as a good filming location flourishes among filmmakers.
“If it’s not a permanent program, that would be a waste,” Martinez said. “Those tax incentives make sense only if there is a long-term plan.”

Both Martinez and “Youth in Revolt” producer Permut noticed on their sets that crewmembers hired in state hadn’t quite learned the ropes of the industry yet.

“If you go to Louisiana today and you want to hire someone for a job, you have the choice of 10 to 12 people that apply for that specific job, and they are very, very qualified,” Martinez said. “In Michigan, you have a couple. So that means that what we had to do on this film was train a lot of people.”

Both the tax credit percentage and the amount of funding required to launch a new industry are high, but Burnstein estimated that for every rebate-eligible dollar spent on production, three more are spent in the local economy — meaning small businesses stand the most to gain from the tax credit program.

And it can’t be ignored that one of the industry’s main advantages is its glamour — especially in Michigan, where a little star-studded stimulus could go a long way in counterbalancing the dismal economic news preoccupying residents.

“People can read the front page stories and see Hollywood is taking notice of Michigan, and then they go to the movies and see it up there on the screen,” Burnstein said. “You don’t think people take pride in that? ‘Hey, that was my neighborhood. … That is my friend’s house they shot at.’ That’s worth something, and to not figure that into the equation would be a huge mistake.”