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Friday, Jun 22, 2018
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Counties on the hook for film incentives

— If Hillsborough County is going to reap the benefits of new state tax incentives for the film and television industry, it could come at a cost — as much as $800,000 in county money per production.

The industry hailed Senate Bill 7128 for the $50 million a year in state money it would provide through 2020. Now, sponsor Sen. Nancy Detert of Venice has added an amendment requiring a 10 percent contribution from the county where each production takes place.

But that’s OK with Hillsborough leaders.

In fact, the idea may have been drawn up with Hillsborough in mind.

“I think the amendment is using Hillsborough County as a model,” said Hillsborough County Commissioner Ken Hagan.

Hagan cited the county commission’s recent approval of incentives for two films — $250,000 for the American film “The Infiltrator,” and $50,000 for the Bollywood feature “Saat Hindustani” — to further entice the productions to come here.

Still, Hagan wants to see changes in how the match is measured to include in-kind services such as discounts on filming on county property as well as cash.

“The state is offering tax incentives, not cash,” Hagan said. “So why should the county only have a cash option?”

He also wants to see the 10 percent requirement reduced for Hillsborough.

Florida counties considered to be “underutilized” as production locations only have to match 5 percent. Now, any county that receives less than $2.5 million a year in state incentives is considered underutilized, but that figure drops to $500,000 under the proposed legislation.

This penalizes Hillsborough, which recorded less than $900,000 of the $131 million in state incentives awarded last year.

“This would put us in the same category as cities like Orlando and Miami who get the majority of the productions,” said Dale Gordon, executive director of the Tampa Hillsborough Film and Digital Media Commission. “I’d like to see that changed.”

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It is unclear what a county’s responsibility would be if a production splits time among counties. Gordon said those details would be worked out in the coming weeks.

If a financial match is required, Hagan said, the County Commission would work with Gordon and an economic development team to decide if a project is worth pursuing. Criteria, according to Gordon, would include a production’s total economic impact on the area and its potential impact on tourism.

“How much is spent in the county on the workforce, on hotels and vendors? And we have to decide if the film projects a message about the area that would be beneficial,” Gordon said.

The proposed amendment was hailed for bringing more accountability to the tax incentive program.

“The public would benefit by improved vetting of proposed projects and approvals based on the best return for taxpayers,” said Dan Krasner with the watchdog group Integrity Florida.

Tax incentives, say industry leaders, have enabled the state to land productions that have generated more than 100,000 jobs in the state over the past three years paying more than $650 million in wages, according to a report released by the Florida Department of Economic Opportunity in November 2013.

Krasner wonders if Florida can do even better. Production incentives are currently given on a first-come, first-serve basis. Krasner prefers a process based on merit.

Film commissioner Gordon acknowledged that a production would need to prove tremendous economic impact for Hillsborough County to sign off on the full $800,000 to land the $8 million maximum state incentive.

She said counties may be more willing to fund a television series than a film at the high end because the benefits are longer term. A series can come back year after year, but a film is a one-shot deal.

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TV series accounted for close to 550,000 of the 930,000 in-state jobs created by productions and almost 150,000 of the 256,000 room nights booked, according to the Department of Economic Opportunity report.

None of those projects were in Hillsborough County.

A separate measure before the Legislature singles out television productions for low-interest loans through a proposed 10-year, $20 million trust fund.

The state would decide if a production receives the loan.

The initiative is being pushed in the House by Rep. Ronald Renuart of Ponte Vedra Beach and in the Senate by Sen. Aaron Bean of Jacksonville.

Renuart agrees that television promises the higher economic impact.

The loan program would help ease a financial burden on executive producers, he said. They often must cover all costs and are not reimbursed by a network until production is complete, requiring loans from a number of lenders who want a percentage of royalties as well as interest.

“It takes money out of the producer’s pocket,” Renuart said. “Under this program, they keep all royalties because we provide them with a low-interest loan over three years.”

The incentives program and the loan proposal, working in conjunction, could position Florida as a prime location for series with the highest rate of return.

If all the tax credits are spent quickly, he added, the state could still lure series with loans.

“Tax credits are not always reliable,” Renuart said. “This is a conservative way to make the state competitive in the television market.”

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