COVER STORY:

HOLLYVEGAS: How Nevada can lure back Hollywood productions

Hollywood film and television studios want to shoot in Nevada, if only the state gave them tax incentives to do so, as 44 states already do. This script needs a better ending.

VEGAS INC Coverage

The cinematic version of my life could go something like this: Growing up in one of the least glamorous towns in the U.S., where oversized sweatshirts and half-ponytails are considered fashionable, a wide-eyed young reporter dreams of Hollywood and the world of celebrity. Then, after a decade of covering red carpets and sipping champagne with Hollywood elite, our suburban star with big plans lands in Las Vegas, where the world of moviemaking is at her (now well-manicured) fingertips.

Except, while the high-paced world of Sin City is tantalizing and fun, it doesn’t have many movie sets. The only time I talk to film crews? When I’m on a Southwest flight home to Albuquerque, where a 25 percent tax incentive has lured some of the biggest film and television producers, bringing in an enormous amount of revenue and employment to what has historically been one of the poorest states in the country.

The dirty little secret is out: Filming movies isn’t glamorous. But it sure can pump money and jobs into even the most unassuming states.

With today’s technology, you can film a movie anywhere. Want a first-class Las Vegas casino? We’ll build one in Burbank. Setting a scene in a five-star Sin City restaurant? New Orleans will work. Location is no longer important, regardless of the plot line. So cash-strapped producers simply follow the money.

Persuading these filmmakers to bring their projects to Nevada would be easy—really easy—if we could give them a break financially, yet we’re one of only six states in the country without film tax incentives. The tax rebate war kicked off after the devaluation of the dollar meant fewer production sets were leaving for Canada, where they no longer enjoy getting twice the bang for their buck.

Money that could be flowing into our recession-beleaguered state, money that makes sense for our entertainment-based economy, is going elsewhere. Our unemployment rate has gotten comfortable at 13.6 percent, a whopping 4.8 percent more than the rest of the nation, yet we’re not going after these jobs. The argument for us catching up to the other states is too strong to even debate.

The real question is: Is this our last chance for a Hollywood ending? Is it now or never?

For those in our studio audience whose minds are now reeling with possibilities, don’t worry. Nevada has a plan. What’s being dubbed the Motion Picture Jobs Creation Act (Assembly Bill 506) was just drafted by Assemblywoman Marilyn Kirkpatrick, D-Las Vegas. The legislation is supported by Senate Majority Leader Steven Horsford, D-North Las Vegas, as well as the International Alliance of Theatrical Stage Employees Local 720, Screen Actors Guild, the Nevada Film Alliance, the Motion Picture Association of America and Directors Guild of America.

“If the Legislature gets busy, we can have film incentives this session,” says James “JR” Reid of JR Lighting, who’s been trying for a decade to get a bill like this passed. “By this time next year, this could be a done deal. We look forward to the days when we’re more worried about there not being enough people or equipment to handle the projects that are rolling in.”

Film tax incentive opponents have mocked other states’ plans, claiming they essentially pay people to do business and that the incentive is another way of saying “bailout.” The timing, they say, is off; we can’t afford to spend money to make money in these times of strained state budgets. New Mexico’s new Republican governor, Susana Martinez, agrees: On Jan. 10, she presented a state budget that called for reducing state tax credits for films from 25 percent to 15 percent. Five huge projects, including the $150 million The Avengers blockbuster hopeful, immediately threatened to pull out. (In the end, she was unsuccessful, but she did get through a cap of $50 million on total incentives per film). The issue remains a heated debate in the state whose film industry is second only to Hollywood, as well as in states such as Michigan and North Carolina.

Anti-incentive campaigns in other states mean it’s time for Nevada to jockey into position.

Kirkpatrick’s proposal would require $250,000 worth of qualifying in-state expenditures in movie or TV work—or $100,000 for smaller projects— in order to receive a 25 percent tax credit. Any expenditure for the project, from location and labor to the florist’s bill would be eligible for this credit. And a team would have to do 60 percent of the shooting days in Nevada to get the tax credit, as an extra safeguard for keeping the money in-state.

“There’s a big advantage to coming last to the race, after 44 other states,” says Joshua Cohen, owner and producer of Cohencidence Productions. “We know how to avoid fraud, and we’ve put in those additional safeguards to make sure the money made in Nevada stays in Nevada. We can become a paradigm of what a good tax credit can do.”

This is where Nevada might lead the pack, despite arriving late to the red carpet. New Mexico’s incentives were a pet project of former Gov. Bill Richardson, an infamously oversized personality and one-time presidential hopeful often teased for being too starry-eyed and reckless when it came to luring Hollywood to his desert state. His most vociferous adversary has been Dennis Kintigh, a Republican representative from Roswell, who has said, “You’re taking money out of the treasury and subsidizing the industry. Just because you spend money, doesn’t mean it gets back to the treasury.”

That’s a valid argument during a state budget crisis, but film incentives are most sought after for jobs and economic activity, rather than money being deposited into state coffers. Tens of thousands of dollars are spent per month, per production company, on everything from camera rentals and food for the crew at Costco. Richardson says that more than 10,000 jobs have been created and the state has earned $1.50 for every dollar spent, but even supporters have questioned the numbers. “New Mexico needs to start over,” scoffed one bitter budget analyst from Albuquerque, when we had drinks at the Bellagio one recent Friday evening. “The whole thing is dirty and nasty, thrown together in Richardson’s haste to run for president, which blew up in his face. We have no hard numbers, and nothing is run like a professional business. Nevada should be careful. Don’t look to New Mexico as a model.”

As Nevada closely watches and studies its neighbors’ programs, it’s sitting on an important, unique advantage: It could quite possibly be the perfect location to shoot a movie. I’ve spent an enormous chunk of time on movie sets in towns so small that the only thing to do on Saturdays is throw on your Uggs and hang out at Best Buy, or even larger cities such as Baton Rouge. There, I once hung out with the pretty extras at Hooters, where they were scouted, and there were exactly two “nice” restaurants the stars called home. Filming in and around Las Vegas seems like a cinematic slam dunk: A-listers such as Angelina Jolie, Nicole Kidman and George Clooney would have an enormous selection of five-star restaurants and hotels to make them feel comfortable; plus, depending on the shooting schedule, they can fly home every night or day if they really wanted to—we’re that close to L.A. And the crew? If enough work was created in Nevada, the low cost of living makes it easy for them to move their families here. With prices so high in Los Angeles right now, who wouldn’t want a reverse commute from neighboring Nevada?

As Joshua Cohen pointed out in a letter to voters last month, Las Vegas could easily become Hollywood’s unofficial “back lot.”

“With the proximity to L.A.,” he says, “and the amount of natural locations we have to shoot here, from the Valley of Fire and Red Rock to the Strip, it’s a no-brainer.”

Just like New Mexico, Nevada has plenty of wide-open spaces to build sets and sound stages. We just don’t have the tax help set up yet to make doing so financially viable.

“It’s so easy to film here,” Cohen says. “Getting permits is cake compared to other states. It’s just that it’s expensive.”

If a producer is shooting a film for $10 million, for example, it’d end up being $7.5 million in New Mexico after the rebate, or only $6.6 million in Alaska. Louisiana, considered a tax incentive success story, offers a whopping 35 percent tax credit, and has recently nabbed enormous projects, such as the latest Twilight movie. California, New Mexico and New York, which has a 30 percent rebate, currently generate the most film work.

“We could be stealing hundreds of millions of dollars from New Mexico, Oregon and Michigan, because of our proximity to L.A. alone,” Cohen says. “If someone’s working in L.A. and encounters union problems or an earthquake and needs to move, they can be here in a day.”

UNLV professor Robert Lang this year presented some seemingly disturbing news at the Nevada 2.0 economic summit: Las Vegas is the least educated major metropolitan area in the West. Politicians immediately started rallying for better education in the state, something I’m sure we can all get behind. Meanwhile, we’re staring down an entire industry with jobs that don’t require four-year degrees, jobs for technicians and people who are good with their hands. Good pay without a college education, but in a career with more longevity than, say, cocktail waitressing? Come now, has there ever been a better fit for this city’s psyche.

“UNLV is never going to be Stanford or Harvard,” says Chuck Muth, president of the limited government advocacy nonprofit organization, Citizen Outreach. “There are good-paying honest jobs in the film industry in support roles, jobs that could be here in Nevada. We need to stop pushing all kids into college.”

If Nevada couldn’t make this happen before, why do we stand a chance now? And if we’re last to the party anyway, does it matter when we actually arrive in our dancing shoes?

“There have been attempts in the past, but they didn’t help local businesses,” JR Lighting’s Reid says. “This bill does, and it would create lots of jobs. There’s a very good chance that this will happen now.”

One of the earlier attempts was Senate Bill 493, introduced by Lorraine Hunt-Bono, Nevada’s lieutenant governor from 1999 to 2007. Despite the bill’s failure to pass, Hunt is credited by many as a pioneer who set the stage for the current tax incentive program to finally reach success. A torch singer herself, Hunt focused on helping the state’s entertainers, plus economic development. She’s highly revered—almost as a demigod—by the local film industry.

“Lorraine Hunt went to bat for us for eight years,” says Phyllis Carreon-Taie, co-owner of Dream Vision Studios on Russell Road, the first and only major motion picture studio and event venue in Nevada. “There were so many obstacles in the beginning: We couldn’t get permits or licenses. But she finally got us what we needed.”

Unlike some states with successful programs, Nevada’s state constitution forbids direct payment to for-profit businesses, so the bill uses some creative accounting so the state doesn’t pay anything.

“Our plan uses tax vouchers of elective credit,” Cohen says. “It’s a transferable tax credit that you can sell to someone with tax liability here, like a casino. Casinos can save on taxes, as the producer gets a check.”

Learning from other states is great, but I hope they’ve learned swiftly and wisely. This bill is Nevada’s ninth attempt at getting film tax incentives, and it just might be the last. At a certain point, the window of opportunity will close. As other states commit to years of filmmaking, they’re building soundstages and prop houses, making it harder and harder for the Johnny-come-latelys to catch up.

Nevada, our star of the Wild West, has come a long way in just the past few years. Just ask Carreon-Taie and her partner, Shawn Lane, of Cheyenne Marketing.

“In the beginning, it was ten times harder than in California,” Lane says. “In California, you’ve got all of the studios. Here? When we first came here, we tried to get permits, but there wasn’t a category for us to fit into. We needed ‘studio facility’ and ended up having to secure a ‘promoters license.’”

Dream Vision covers everything from set construction and catering to hair and makeup and filming. It has also housed the production of Sprint commercials and cable programs as well as created props for Cirque du Soleil for more than a decade. Business is booming so much that they’re expanding from 16,000 square feet to 82,000 square feet. Lane’s field of expertise is throwing specialized, one-of-a-kind events, which she does at the studio. Dream Vision is in the process of bringing in Aqua Dome for underwater filming and has the largest hard cyc wall and green screen—both necessary to film special effects—in the state, as well as the ability to do full 3-D filming and editing.

“Ten years ago, the casinos didn’t want us here,” Carreon-Taie says. “They told me the crew wouldn’t gamble because they’d be working 10-12 hours a day. Now? Things have really opened up here.”

To make up for the state government’s lack of incentives, Carreon-Taie and Lane essentially create their own by offering steep discounts in a variety of ways, including through their educational programs.

“Everyone says, ‘You’ve got to get incentives,’” Carreon-Taie says. “They love it here. They would love to film here.”

When asked if she personally knows any industry folk who would move here if we got enough work going. “Yes!” she says. “I get told all the time that people would move here if they found work.”

Lane cut in: “What about the unemployed here? They can’t get work. Let’s get them jobs.”

The enormous expense of filming in Nevada is a huge reason why the only attention Las Vegas often gets on-screen is reality TV, by far the cheapest form of entertainment. When E!’s Holly’s World or MTV’s The Real World film here, a tiny band of about three or four people (usually out-of-towners) makes up the entire crew, unlike the up to 150 people, including many locals, who are on the set of a cable show such as Sons of Anarchy, currently being shot in New Mexico, at any time. The longer we wait to pass incentives, the harder it will be to convince people that we can become a big player in the movie business.

“It’ll be a snowball effect once it gets going,” Cohen says. “People will think to produce in this town, and that will force employees to come here. It will keep things rolling.”

But, as it stands now, we’re a decade behind.

Recent blockbusters The Hangover and What Happens In Vegas take place here, but often, little other than exterior shots are actually filmed in town. For example, the “Hangover Suite” made famous by a tiger and a baby garnered so much attention that Caesars Palace ended up building one for tourists, even though the original was shot on a California soundstage. (Unlike many Las Vegas-based movies, however, The Hangover does boast interior shots actually filmed at Caesars.) Meanwhile, more than 95 percent of CSI:—television’s No. 1 drama—now in its 12th season, is filmed in California.

“I know the CSI: producers,” Reid says. ““If there had been incentives, they would’ve shot everything here.”

Las Vegas has a natural relationship with cinema, starting with the benefits it reaps from starring in hits such as Ocean’s Eleven.

“Before The Hangover, Las Vegas was at a

7 percent loss of gaming revenue,” Reid says. “After the movie, it went up to zero percent. That’s a

7 percent increase because of the movie. It happens every time there’s a movie about Vegas.”

I asked if we get the same result if the movie about Vegas isn’t actually filmed here.

“The more that Vegas is seen in the movie, the better it is for us,” Reid says. “CSI: films here about three days a year. Casinos understand what The Hangover did for Caesars, although some are friendlier than others. They just don’t want to be perceived in a negative light.”

So, the 7 percent gaming revenue jump after The Hangover illustrates how Las Vegas can benefit from exposure. In non-entertainment-based states, if stars such as Jessica Simpson, Scarlett Johansson or Katie Holmes are caught doing tequila shots at the local watering hole or ordering a five-star meal in an impossible to get into restaurant, visitors aren’t really going to flock there in droves, although New Mexico’s statewide tourism has received an obvious jump since it became the Hollywood of the Southwest. In Vegas, such sightings hit the weekly tabloids. Once a venue is attached to A-listers like Leonardo DiCaprio, Anne Hathaway or Jennifer Aniston in People or Us Weekly, tourists visiting Sin City to party or gamble make it a priority to visit the places their favorite stars like. Not convinced? Try showing up to Tao when huge reality star and self-made cottage industry Kim Kardashian is throwing a birthday party. For a tourist magnet like Las Vegas, exposure on TV and in movies means nothing less than millions upon millions of dollars in free advertising.

Because of Las Vegas’ iconic Strip, which is rarely if ever recreated on a television or movie set, and the fact that we’re so close to Los Angeles, Nevada does still get its share of Tinseltown, managing to make the top 10 in television and movie production as recently as 2009. The problem is that a few years prior, we were in the top five, when fewer states offered rebates. In 2002, only five states offered them, now that number is 44. For better or worse, Hollywood’s outsourcing has resulted in a culture of incentives, and we’ll continue to drop in the rankings and lose money to other states if we don’t join the tax incentives party train.

With gambling now legal in 48 states and Nevada’s economy in the dumps, diversifying is the cocktail hour small talk du jour. This movie/TV business makes sense for us, so let’s solidify our reputation as the Entertainment Capital of the World. With help from incentives, we can reclaim our spot among the top states for moviemaking and give New Mexico and New York a run for their money for the No. 1 non-California position. It’s almost too easy.

There’s finally a bill on the table that fixes what have been hang-ups in the past: not doing enough to help the local economy and a state constitution that forbids direct payment to for-profit industries such as film and television. Though seemingly controversial, I didn’t find a single notable person who would go on the record opposing the idea of giving incentives to bring business to Nevada. Maybe—just maybe—this is the bill that the Nevada Legislature, the governor and the people of this great state all agree on so that all that easy untapped Hollywood money can start flowing directly into our economically depressed region.

It’s time to get behind it, folks.

We’re the closest state to Hollywood, and yet we’re still one of only six states to not give these cost-obsessed producers financial help. If we carry on too long like this, Nevada will never be able to overcome its “don’t film there” reputation.

And, sadly, Las Vegas won’t get the Hollywood ending it so richly deserves.

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  1. This is a good article. Sensible, with a solution. When even states like Oklahoma are giving incentives for film production, then it seems like a no brainer for Nevada.

  2. Chunky says:

    Anything bringing jobs to Las Vegas, especially high-profile projects that feature the city is good for local production crews, support services and tourism. Even a two-day commercial budget of $125k+ leaves 25-30% of that in Las Vegas.

    Cheers to Mr. Cohen and JR for fighting this fight. By the same token, the indie film world Mr. Cohen lives in is a far cry from professional studio based feature films and episodic television.

    Chunky has several bones to pick with the facts and statements presented in this story:

    1. Dream Vision Studios is not what they make themselves out to be... it's a commercial warehouse with make-do offices decorated like my grandmothers house, ran by people who have little real clue and even less experience how a professional Hollywood studio set is run. Ms. Tegnelia, please check your facts before falling prey to marketing hype.

    2. Son's of Anarchy is NOT shot in New Mexico and nor does it shoot there for establishing shots. SOA is shot in North Hollywood at Occidental Studios and other locations around LA. Again, check your facts.

    3. Reality brings a few more than 3-4 local positions but aside from specialty positions the pay is low and the hours are long. We have all the reality work we need no doubt.

    As for incentives lining the pockets of Producers and talent, that may be the case but if 60% of the crew is required to PROVE residency in NV that can be a great win.

    The problem we face here in Las Vegas is that few so called production professionals in this town can work at the pace, attitude and skill set of the crews in Los Angeles. Producers come here and hire people in key positions but they often leave saying "never again". Most only hire locals now to save on travel expenses.

    Union problems that are large enough to affect the LA / Hollywood market affect Nevada just the same. The unions may be "Local" as is the case with Local 720 but the allied "Locals" for IATSE, SAG, AFTRA etc. are National by nature, thus you won't get LA Producers flocking to Las Vegas to beat a Union deal as none of the Vegas area Union members would cross that line and the main players are still LA based. Whoever made this statement does not understand the business or the unions.

    Chunky is thrilled to see progress on all the hard work put in by Mr. Cohen, Mr. Reid and others. For the legislation to work we have to have talented and hard working crews in Nevada with the skills and work ethic to compete on that level as well. Tax incentives don't make a movie; teams of people do. Our local crew members as well need to quit shooting themselves in the foot by low-balling prices and that includes the local Producers who co-Produce or Production Manage these jobs.

    If Dream Vision wants to play in this arena they should lead by example offering real-world rates to crews instead of low-budget crew pay and marketing hype to Producers.

    That IS what Chunky thinks!