Lights! Camera! Inaction!
In 1974, author Stephen King found a change of scenery for his next book project by opening an atlas and randomly pointing to Boulder.
King and his wife, Tabitha, took the advice of some helpful locals and stayed at the imposing Stanley Hotel at the base of Rocky Mountain National Park – a setting that ultimately inspired his horror novel, The Shining.
It’s no wonder many people believe the hotel is haunted. The 1997 television mini-series version of The Shining was filmed there, and reports of supernatural activity brought in the Syfy Channel’s hit show Ghost Hunters. About 80,000 of the Stanley’s 350,000 annual visitors pay for ghost tours.
“It would be fair to say that the publicity, the movies, the mini-series as well as other TV shows have absolutely helped the hotel thrive,” says Daniel Swanson, the Stanley’s vice president of e-commerce. “It’s been a real revenue driver for us.”
The Stanley’s story serves as a testament to the potential of film and television projects to boost Colorado’s economic activity, job creation and tourism.
A 2011 University of Colorado Leeds School of Business economic analysis of a Colorado film incentive program found that every dollar invested in film and television brings $5 in production spending and nearly $10 in economic activity.
After the state hired Hollywood producer Donald Zuckerman as director of the Office of Film, Television and Media in 2011, he persuaded lawmakers to fund a $4 million rebate and loan guarantee incentive program. Zuckerman then landed three films, a Coors commercial, post-production work and three TV series.
State Rep. Mark Ferrandino (D-Denver) says the film incentive program, while modest by national standards, produces big results: more than $41 million in economic activity, 376 direct jobs, 195 indirect jobs and an estimated 515 part-time jobs.
“The pros definitely outweigh the cons,” he says.
But not everyone is so quick to roll out the red carpet.
In April, the Colorado legislature’s Joint Budget Committee rejected a House-approved request to increase the film office’s funding by $1.5 million.
“Generally the opponents think it’s corporate welfare or money not well spent that could have gone elsewhere,” Zuckerman says.
Sen. Kent Lambert (R-Colorado Springs) voted against the request, citing reports that cast doubt on the incentive’s supposed return on investment. He expressed further concern that the entertainment lobby is serving an already profitable industry, the Denver Post reported following the decision.
“The State government should treat all businesses equally; no subsidies for one specific industry,” says Linda Gorman, a former academic economist and the director of Health Care Policy at the Independence Institute, a Golden-based free market think-tank. “I’m against corporate welfare, and that’s what film and television incentive programs are. Just because you’re shooting a film here shouldn’t mean that you are so much more important than the team manufacturing a local product.”
Gorman also expressed doubts about ROI, citing a Boston Globe report that Massachusetts received only 16 cents back for every dollar of its $44 million tax credit program.
“It’s highly unlikely that Colorado will ever have a program of that magnitude,” says Brian Lewandowski, a research associate with the Leeds School of Business, referring to the tens of millions of dollars states such as Louisiana and Michigan have doled out in recent years to lure producers.
Still, Gorman and other opponents worry about the aggressive lobby, tax increases and potentially negative impact on the business environment.
“You have to be careful; we’re not a state with a mobile tax base, and even big manufacturing industries can be moved,” Gorman says. “Colorado has been attractive to businesses because it’s a nice place to live, but people are not willing to pay infinite amounts for that. Not giving any special tax breaks keeps the tax environment simple.”
But Lewandowski argues that tax credits can be beneficial. He cites the case of Arrow Electronics Inc., a Fortune 500 electronic component distribution company that moved to Denver in 2011 after the Colorado Economic Development Commission approved tax credits of as much as $11.4 million over five years for the creation of 11,700 jobs.
“The state has modest funding to use in incentive packages to help lure qualifying businesses to the state. When a company decides to relocate, incentive programs often underlie those moves,” Lewandowski says. “There’s the idea that Arrow brings a lot of indirect company growth with it. It’s important to remind people it’s the same concept with film.”
Before states began offering film incentives, Colorado’s inherent advantages – natural beauty, outstanding work force and creative capital – made it a hotbed of production.
“In the ‘80s, Colorado was a major hub, if not the major hub for cable aggregation and distribution,” says Michael Haskins, attorney and president of CINEMA, the statewide advocacy group to promote Colorado’s media industry. “This led to even more local film and television production through the early ‘90s.”
Then the rest of the global market caught on to the benefits of inviting film crews onto their turf at discounted costs.
“Other countries offer support because they know it’s good for their economies and good for tourism,” says Brad Krevoy, executive producer of “When Calls the Heart,” a Hallmark Channel series scheduled to shoot in Telluride July through August.
Krevoy, who has developed and distributed more than 100 motion pictures and television programs, points out that the entertainment industry produces one of our nation’s leading exports.
As a result, many states got smart and re-shored the making of the movies and television shows with bargain programs of their own, including tax credits and exemptions, cash grants, fee-free locations and other perks.
Colorado took its time getting on board, and proponents believe it would be a mistake to back out now.
“With many states competing against one another by offering incentives for film projects, it’s necessary for us to be in the game,” Ferrandino says.
And a fiercely competitive game it is: Currently, 37 states offer incentives.
“I think the real problem is the need to educate the public as to how incentive programs work and why they are essential,” Zuckerman says. “What a lot of the opponents do not like is that everyone else is doing it, so why should we? They want to see proof, metrics, showing that we get something substantial back for
He says they will have actual numbers, not just projections, ready for the next legislative session.
“And it is important to factor in the intangibles: increase in tourism, positive branding for the state which might cause a business to open an office here,” he says. “While these cannot be easily quantified, there is ample anecdotal and some empirical evidence.”
Zuckerman points to Disney’s upcoming American action western, “The Lone Ranger,” starring Johnny Depp and Armie Hammer. The project reportedly spent $7 million in Creede during 14 weeks of set construction and filming. After last year’s shoot, sales tax collection went up 24.7 percent from July through September.
Zuckerman says he’s primarily steered clear of corporate giants, attempting instead to bolster local companies, including High Noon Entertainment, Rocky Mountain PBS and The Frame, a Colorado production company.
“We’ve been out of money since February,” he says. “We have a number of other projects that would like to come here, including a potential $10 million movie, and we cannot close on it now.”
Ferrandino says the film incentive program drives tourism and complements ongoing efforts to spread the Colorado brand.
“We want people to watch a Colorado-made film or TV show and say, ‘I want to visit the state where that beautiful scene was filmed,’” he says.
“Once they visit, they’ll want to do business here – and live here.”
MOVIES (and TV) in the MAKING
“The Prospectors”: Tracking five gem-mining families on their mountain adventures, Colorado’s High Noon Entertainment – one of the largest independent production companies in the country – ramps up its second season after a successful nine-episode stint, distributed and fully funded by The Weather Channel. First Season Budget: $1.8 million. Est. Colorado spend (on all High Noon’s productions) $1,807,785. Est. Colorado hires: 34.
“Dear Eleanor”: Actor/producer Leonardo DiCaprio and his independent production company, Appian Way Productions are set to come to Colorado to film scenes of two teenage girls’ cross-country road trip to meet Eleanor Roosevelt. Set in the 1960’s, the crew will capture views from Lyons to Niwot to Longmont, Boulder and Denver. Budget: $3 million. Est. Colorado spend: $2,500,000. Est. Colorado crew hires: 40.
Universal Sports: The collaboration between NBC Sports and InterMedia Partners, LP will produce a number of Olympic sports programs in the coming fiscal year, including the comeback story of skier Lindsay Vonn. After moving the team from Los Angeles to the Comcast Media Center in Denver, production will begin with a $2.5 million budget for shooting in Colorado Springs, Steamboat Springs, Aspen and Vail. Est. Colorado Spend: $6,188,000. Est. Colorado hires: 44.
“The Frame” by The Frame LLC: The Colorado-based production company is currently filming its supernatural thriller about a young cargo thief and a paramedic, forced together by a mysterious event. Est. Colorado spend: $380,000. Est. Colorado hires: 13.
“When Calls the Heart”: To boost its original programming efforts, The Hallmark Channel green-lighted a new series set to film in Telluride July through August. Est. Colorado hires: 75 cast, 25 extras.
ON HOLD—“Caribou Records”: The story of James William Guercio’s recording studio in Boulder has been postponed following the JBC vote. The funds set aside for this project were used for the Hallmark series incentive.