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NM film industry excited about new momentum

Copyright © 2019 Albuquerque Journal

In her inaugural address Jan. 1, newly minted Gov. Michelle Lujan Grisham promised to “take off the shackles” from New Mexico’s film industry, shining a spotlight on its potential to become a blockbuster force for economic development in the Land of Enchantment.

“With Netflix in Albuquerque and moviemakers in California recognizing our world-class crew base and brilliantly talented homegrown writers, performers and filmmakers, we will take off the shackles and let it rip – and in the process we will put New Mexicans to work,” Lujan Grisham said.

That has movers and shakers in the movie business in Santa Fe excited. Ex-Gov. Susana Martinez, Lujan Grisham’s predecessor, early in her administration pushed for and got a cap on film rebates that some say handcuffed the success of a growing enterprise.

Martinez, who in 2011 signed a bill putting a $50 million cap on the amount of rebates in a single year, said the limit was necessary to ensure budget stability, and she has since said the film industry has continued to thrive.

Not everyone agrees.

“Everybody recognizes that there is a tremendous opportunity like we haven’t seen in the past eight years on a lot of levels to really build this industry in the state – not just a tremendous opportunity internally, but national dynamics and international dynamics,” Eric Witt, executive director of the Santa Fe Film Office, said during a meeting of the Santa Fe Film and Digital Media Commission last week.

“The stars are aligned in a very fortuitous fashion for New Mexico if we take advantage of them.”

Missing New Mexico

Lee Zlotoff, a producer, director and screenwriter who co-founded the Santa Fe Network, which, according to its website, serves to “showcase the extraordinary cultural, artistic and intellectual resources of the Santa Fe region” and the rest of New Mexico, aims to line up some industry and political stars for an “Above the Line” event during the upcoming legislative session.

“Above the Line” is a film term that refers to producers, directors, actors and screenwriters – people with influence on the creative direction of any project. Previous Above the Line events have addressed such topics as film financing and distribution. Zlotoff said the theme of the event planned for Jan. 30 at the Hotel Santa Fe will be “making the most of the coming wave,” brought on by the purchase of Albuquerque Studios by Netflix in October and the new governor’s pledge to remove the filmmakers’ rebate cap.

Zlotoff said he hoped some good ideas for capitalizing on opportunities would come out of the event.

“Let’s come away if we can with four or five, a half-dozen, proposals and say these are specific things that the (state) Film Office can do to really promote local content creation,” he said.

Zlotoff said he’s hoping to attract representatives from Netflix, the New Mexico Film Office and other “players” in the film industry.

House Speaker Brian Egolf will also get an invite, as will former Disney executive Alicia Keyes, who most recently headed the Albuquerque Film Office before being tapped as state Economic Development secretary by Lujan Grisham.

That, too, gave members of the commission reason for optimism about the future of the film industry in New Mexico.

“She’s super cool,” said Matt Brown, who heads up economic development efforts for the city of Santa Fe. “And because she comes out of the film industry and she likes doing deals, I would expect her to be looking hard, not just in Santa Fe, but in other cities about how to amplify that.”

The state Film Office is currently absent a director and speculation was that Keyes would have a say as to who would fill the position.

Commission member Anna Darrah, a film producer and director, said she hoped the Film Office would be given more resources under the new governor.

“I think in the last few years, the Film Office first of all had their budget slashed entirely, so they have very little resources. Which is why, when I go to festivals, it’s amazing how they are not there,” she said, adding that New Mexico’s film industry wasn’t represented at South by Southwest in Austin or at Santa Monica’s American Film Market last year.

“Russia was there, and New Mexico wasn’t. Louisiana and Georgia were there. And it could be it was because we were so booked. But here’s this huge location expo with everybody, and (New Mexico was) not there.”

Looking at options

Lujan Grisham said for the first time during her inaugural address that she wants to eliminate the $50 million rebate cap entirely. But Rep. Egolf was more cautious when he spoke with a Journal reporter after her speech. He said staffers were studying different options – including the option to leave the annual spending cap in place for movies, but remove it for television productions.

The cap led to a $250 million backlog of rebates now owed filmmakers because while the cap was in place for how much the state could pay out, the cap statute did not place any limitations on the amount of film rebates that could be earned during any given year.

Critics say that because filmmakers were having to wait more than a year to receive their rebates, it discouraged them from bringing other film projects to New Mexico. The rebates amount to 25 percent of direct in-state spending by movie-makers and up to 30 percent for long-running TV series.

On Thursday, Lujan Grisham released her proposed budget for the upcoming fiscal year. It calls for the state to pay off the rebate backlog in its entirety in one year, rather than a phased approach.

Witt says the film rebate program was designed to be self-sustaining and there shouldn’t have been a backlog in the first place.

And while Lujan Grisham’s words sounded promising, “never underestimate the capacity of government to screw stuff up,” said Witt, who served as former Gov. Bill Richardson’s deputy chief of staff when New Mexico was among the first states to enact a film incentive program in 2003.

The program helped attract tent pole productions, such as “The Avengers,” “Thor” and 2007’s Academy Award-winning Best Picture “No Country for Old Men,” as well as television productions like “Breaking Bad” and “Longmire.”

“I keep reminding people that up until about eight years ago, New Mexico had the most well-funded, aggressive film program as anyone in the country,” Witt said. “We were kind of the envy around the country.”

While he senses that most state legislators favored removing the cap, Witt warned that there are still some lawmakers in powerful positions opposed to removing the limit.

Rebate skeptics doubt whether the millions spent on enticing film work to New Mexico really pay off in terms of economic impact and revenue for the state. Some states have pared back their financial incentive programs, and different studies around the country have produced varied results, pro and con, on the value of film incentives.

“People, for whatever reason, whether they don’t believe it on an empirical basis, or they just don’t like film, are not inclined to go after the opportunities that we have,” Witt told the commission. “I think the ones in favor (of removing the cap) outweigh those who aren’t. But don’t underestimate the opposition; they occupy some key places.”

Darrah asked Witt about studies that have been conducted to measure the economic impact the film industry has in New Mexico. Witt mentioned two, one that was conducted during the Richardson administration and another done while Martinez was in office. “And they were both essentially the exact same conclusion, that it is tremendously beneficial for the state of New Mexico,” he said.

Critics of the film incentive program call it “corporate welfare” and suggest the money could be better spent on other programs.

Floodgates will open

Commission member NaNi Rivera, executive director of the Santa Fe Film Festival, asked Witt about another incentive program. A program through the state Investment Council has offered no-interest loans of up to $15 million for TV shows and movies being made in New Mexico.

Witt said that while the program is “still on the books,” it has been inactive since the Investment Council, which is authorized to invest a percentage of the Land Grant Permanent Fund into the film loan fund, stopped doing so.

“This is when the Great Recession hit and the state permanent fund took about a $3 billion loss over the course of about 12 months,” said Witt. “The only aspect of the state investment portfolio that didn’t lose money was the film loan program. Because it was guaranteed, it became a safe haven investment. I think they loaned over the course of that program about $250 million and didn’t lose a dime. And 85 percent of that was invested in the state of New Mexico, whereas 85 percent of the general state portfolio was invested in New York, London, Hong Kong – outside the state.”

Randy Randall, tourism director for the city of Santa Fe, and others at the meeting said they hope the new state administration will recognize the importance of building infrastructure for the film business.

“The more we can get infrastructure developed here, the better chance we have for keeping the film business,” he said. “The big film could be filmed anywhere. If our credits were to get reduced or go away in the future, we’ll lose the business – just like some of the other states that have reduced their programs have. But to the extent that infrastructure gets built and developed, those things won’t move. They will help to keep it as a viable part of our economy.”

Several members of the commission said the state should work to build the “below-the-line” workforce that includes camera and boom operators, gaffers, film editors, location managers, sound engineers and the like that make filmmaking in New Mexico possible.

Zlotoff said New Mexico is losing talent because many people are moving away for better economic opportunity elsewhere.

“How can we take advantage of the fact that there’s all this production going on here to create enough of an infrastructure and community that people want to move here or graduate from a film program, like at Santa Fe Community College, and become a content creator here, rather than have to leave and go to LA, or New York or San Francisco? Because that’s what the state is lacking,” he said.

Stay tuned to see what happens, Witt said. While the new governor and the Legislature surely support the film industry in New Mexico, there will be other priorities – like education, health care and public safety – that rank ahead of film for the 60-day session that begins Tuesday.

“This session is going to be crazy,” he said. “There’s eight years of pent-up momentum that is just going to blow up on the opening day of the session … The floodgates are going to open.”

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