By proposing reimbursements for film companies that shoot in Los Angeles, Mayor James Hahn is plunging into a furious bidding war among cities and states looking to attract filming through incentives even as local officials acknowledge they may never undercut their competitors.
Hahn, in the midst of a runoff contest with City Councilman Antonio Villaraigosa, has proposed 5 percent reimbursements on below-the-line costs for production companies that shoot at least 75 percent of the production in Los Angeles. The subsidy would top out at $625,000 per production and the city could cap total reimbursements at $15 million in the first year.
With the proposal, which Hahn unveiled at a campaign stop in Hollywood, Los Angeles enters the increasingly competitive sweepstakes among cities and states that are offering broad incentives such as interest-free loans, tax credits, exemptions from sales and use taxes, and income tax rebates.
"Other cities, other states and other countries are luring our film industry away with powerful financial incentives," Hahn said at a press conference. "I'm fighting back with incentives of our own to make an offer that will be hard for filmmakers to refuse."
Villaraigosa was quick to attack the proposal and the timing. The real question, he said, is "why Hahn waited until the fourth year of his term to announce a plan to keep film production in Los Angeles."
Some in the entertainment industry said the mayor's measure offered only limited relief, given that $625,000 is a relatively modest savings on productions that sometimes run into the tens of million of dollars. They also note that while production continues to leave the area for cheaper locales, Los Angeles still leads the nation in the number of production days with its massive studio and talent infrastructure.
Still, others were enthusiastic about the additional incentive.
"I think that anything Los Angeles can do to promote filming here and be competitive in the world environment is going to help L.A.," said Hudson Hickman, senior vice president of television production for MGM Television Entertainment.
"For 80 years, Los Angeles had a virtual lock on production in this country and in the world. That's no longer true. This (relief) might be modest, but it opens the doors for something further," he said.
In fact, Los Angeles officials said they were awaiting a similar tax relief proposal from Gov. Arnold Schwarzenegger. A Schwarzenegger spokesman, Vince Solitto, said the governor is committed to introducing a relief package this year but had no details.
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