The North Carolina Film Office ran small ads on three consecutive pages in the Hollywood Reporter during Oscars week.
The ads read: “25 percent rebate, $31 million annually, renowned crews.”
“And still you haven’t called.”
“How come Hollywood?”
The marketing plot: Trying to get a boost from “Three Billboards Outside Ebbing, Missouri,” an Academy Award and Golden Globe winning film shot in large part in Sylva, Black Mountain and other parts of western North Carolina.
The third ad has the caption “established infrastructure and amazing locations, it’s time to film your next award winner here.”
The obstacles: Overcoming Hollywood concerns about the stability of North Carolina’s film production incentives, and the lingering reputation damage from the March 2016 passage and March 2017 rescinding of House Bill 2, most known for transgender restroom restrictions.
State Commerce and Visit NC officials sought to remind Hollywood that North Carolina’s grant program currently has a $65 million pool.
The $31 million in annual funding rolls over if not spent.
Although Visit NC officials were hopeful the ads would attract interest, they acknowledge scrambling to secure grant takers.
So far in fiscal 2017-18, the program has committed $500,000 toward production of five 60-second commercials, Commerce spokesman David Rhoades said.
Visit NC officials say memories remain fresh in Hollywood about the Republican-controlled legislature’s decision in 2014 to eliminate film production tax credits, leading many companies and a touted production crew base to uproot and move to Georgia.
Guy Gaster, director of the N.C. Film Office, said that even though much of HB2 was repealed, many film production companies still don’t have North Carolina on their radar screen.
“It only takes one key person saying they’re not comfortable with being in North Carolina to kill our chances at a production,” Gaster said.
Wit Tuttell, Visit NC’s executive director, said that although Disney and ABC haven’t said it publicly, “they will not film in North Carolina right now.”
Rebecca Clark, director of the Piedmont Triad Film Commission, went to Hollywood recently for an Association of Film Commissioner’s International-affiliated event. She was accompanied by Gaster and officials with the Charlotte and Wilmington regional film offices.
“We had many opportunities to meet with film producers, location managers and heads of studios,” Clark said. “People want to come back to North Carolina. The interest is definitely there.”
For example, she mentioned marketing vacant hospitals and vacant schools sites in North Carolina, “big draws for filmmakers.”
Yet, since 2015, “not one project that has filmed in this region has benefited from the film grant,” she said. The last major feature film shot locally was “The Disappointments Room” in 2014.
“Abundant Acreage Available,” a movie directed by Winston-Salem native Angus MacLachlan, was filmed in the East Bend area in February and March 2016 with no incentives involved.
Clark said another “very low budget” film, “Switching Gears,” was filmed locally with no incentives.
“We’ve had a steady stream of commercial productions, TV episodes and two reality series: ‘My Big Fat Fabulous Life’ and ‘Toymakerz,’ which keep some of our local crew busy and employed,” Clark said.
“I don’t think the majority of our region’s legislators are aware that the limited grant isn’t benefiting this region, which is ripe for production.
Clark said the Triad was a runner-up to western N.C. for filming “Three Billboards.”
“I worked very hard with that production to bring them here, and it would have been the only film shot here to benefit from the grant,” Clark said.
“I’m optimistic that things will once again turn around and we’ll have some business soon.”
“Georgia is just killing it with film production,” Tuttell said.
Indeed it is, becoming in 2016 the world’s largest location for feature film production, overtaking California and New York.
Film and television productions spent $2.65 billion in Georgia in fiscal 2017, according to the Georgia Department of Economic Development.
It’s fair to say much of Georgia’s gain came at North Carolina’s expense.
In 2005, North Carolina began giving up to a 15 percent tax credit for qualifying film productions, raising it to 25 percent in 2009.
Meanwhile, Georgia began with a 20 percent tax credit in 2004 and padded it to 30 percent in 2008.
In 2013, Georgia paid $231 million in film tax credits — nearly four times the $61 million from North Carolina.
Yet, North Carolina was able to gain productions during 2013 that included “Iron Man 3,” “Revolution,” “Homeland,” “Tammy,’ “Sleepy Hollow,” “Under the Dome,” “Banshee” and “Eastbound and Down.” Two feature films — “The Ultimate Life’” and “You Are Here” — were shot in the Triad.
At that time, film advocates in both states could agree to “win some, lose some” while counting on an increasing industry spotlight on the Southeast to attract a steady flow of productions.
However, in 2014, the Republican-controlled N.C. legislature let the film production tax credits sunset as one piece of a larger plan to end most incentive funding in favor of lower corporate income taxes.
Legislators also said they didn’t like that film tax credits aren’t earned over several years, as required in business economic incentive packages.
The result: film production spending in North Carolina dropped from $377 million in 2012 to $140 million in 2016.
The revenue falloff and extensive lobbying effort by state film officials led legislators to provide $10 million in film credit grant funding in 2015, and $31 million in performance-based grants for the 2016-17 and 2017-18 fiscal years.
During the regular 2017 legislative session, Senate Bill 358, co-sponsored by Sen. Paul Lowe, D-Forsyth, and House Bill 473 would have provided $55 million each year from the general fund.
Neither bill got out of committee.
Georgia entices film production companies with a 20 percent tax credit for spending at least $500,000 in Georgia, as well as an additional 10 percent tax credit for putting a Georgia logo in their credits.
Before 2014, the minimum N.C. spending requirement was $250,000 for a feature film or a television series to receive tax credits.
In establishing the grant program, legislators set minimum spending requirements of $5 million for a feature film, $1 million per episode for a series, and $250,000 for a commercial.
As a result, North Carolina has had to focus on recruiting mid-level feature films and TV series, rather than the blockbuster movies it hosted up until 2013.
“Many indie filmmakers said there is no way they can come here, but they could go to Georgia where the minimum is $500,000,” Clark said.
“On the opposite end, the big-budget feature films are going to Georgia because the (N.C.) cap per project is $5 million. It used to be a $20 million cap per project. There is a $9 million cap per season for a TV series.”
Clark said setting a minimum spend of $500,000 would be beneficial to recruiting efforts.
Gaster said he gets calls every time that a major production is completed in Georgia from production crew members who still live or have family in North Carolina.
“They’re constantly checking to see if things have changed and there’s something for them to come home to,” Gaster said. “We’re still telling them most times there’s little, or there’s not, so they stay in Georgia.”
North Carolina is not the only state whose film production industry has been significantly affected.
Louisiana was near par with Georgia on film production after being the first state to offer incentives.
However in 2015, during a budget crisis, Louisiana’s legislature capped incentives at $180 million. Legislators allowed the state’s development agency to recruit film production companies with pledges of reimbursement as its economy improved.
However, Site Selection magazine reported that a backlog of unpaid claims discouraged the companies enough to move their production to Georgia.
“The arms race is over,” Louisiana state Sen. J.P. Morrell said to The Advocate during budget negotiations in April. “Georgia has won the arms race.
“We’re trying to manage a steady flow of projects in the state. We’re competing for mid-tier Hollywood projects.”
Seeking a boost
Visit NC is trying to generate as much buzz as possible for the film industry.
For example, it has organized a three-day jaunt for the locations of “Three Billboards” to allow enthusiasts to bask in the setting of the film similar to how the sites for “Dirty Dancing” made parts of western N.C. a tourism hot spot.
“Three Billboards has that kind of iconic, weird feel to it that its audience loves,” Gaster said. “The mountain locations and small town atmosphere played a role in the attraction of the film and of the tourism.”
Meanwhile, Visit NC is optimistic that a United Kingdom-produced film, American Animals, could give the N.C. film industry another boost. Filming took place in Belmont, near Charlotte, and in Mooresville.
“What film producers want most of all is a sense of certainty and stability,” Gaster said.
“TV producers who are projecting filming for multiple seasons want to know that incentives won’t be swept away at a political whim.
“Our program is back at a decent funding level, but we have to be able to show consistency in our product and our availability.”