Business
9:35 am
Wed June 11, 2014

Are NC Film Incentives Worth It? Part 1: How They Work

A chair on set of CBS's "Under The Dome"
A chair on set of CBS's "Under The Dome"
Credit Courtesy of EUE/Screen Gems

For the past seven years North Carolina has been aggressively trying to lure movie and television shows to film in the state. Their bait? Tax dollars.

Since the program began it has been hugely successful. But the film incentive program is controversial. In Raleigh there is a movement to change the program or let it sunset at the end of this year.

This week, we take a closer look at the incentives program and proposals to change it. This report looks at how the system works and how much money just one TV show spends in the state.

Arial shot of EUE/Screen Gems Studio in Wilmington. Its the largest studio complex outside of California in the United States.
Arial shot of EUE/Screen Gems Studio in Wilmington. Its the largest studio complex outside of California in the United States.
Credit Courtesy of EUE/Screen Gems

Standing in front of EUE Screen Gems studio, there are only two things that remind you that you're not in California, a noticeable absence of palm trees and the fact the airport up the street is not LAX - it's ILM, Wilmington International.

The lot is a complex of wardrobe, lighting and prop warehouses, woodshops and production office space. The parking lots have surplus army trucks and humvees parked next to pickups and Toyota Priuses. And there's a wooden gallows set up near a cluster of trees. All of this is a testament to the power and allure of North Carolina's film incentive which ranks as one of the most attractive in the country.

This studio is the largest outside of Los Angeles. The centerpiece of the lot are ten giant sound stages ready to be turned into any set imaginable. Say a diner from the popular CBS sci-fi drama "Under the Dome."

Interior of Stage 10 with a set from the FOX drama "Sleepy Hollow".
Interior of Stage 10 with a set from the FOX drama "Sleepy Hollow".
Credit Courtesy of EUE/Screen Gems

But here's the funny thing about soundstages. They're really just big empty spaces. They resemble airplane hangars more than diners or a sheriff's office or a school. And these sound stages are similar to the many others built across the country.

So why is "Under The Dome" filmed in North Carolina? The same question can be asked about the FOX drama "Sleepy Hollow," the four TV pilots that just finished filming here and the slew of movies ranging from blockbusters like "Iron Man 3" to the comedy "We're the Millers" and the screen adaptation of "The Secret Life of Bees."

It's all about the money the state pays productions to come here.

"I would say it's 100 percent of the dialogue with the client base in California," says Chris Cooney, the chief operating officer for EUE Screen Gems Studios. "They have so much downward pressure on themselves to produce for a price and if they can't meet that price the project is not going to go forward or their going to be heavily shopping for other states or countries than can offer a deal," continues Cooney.

Thirty-nine states, the District of Columbia and Puerto Rico offer some kind of film incentive program.

In North Carolina, when a TV show, commercial, film or documentary spends at least $250,000 shooting in the state they get back 25 cents for every qualifying dollar spent. This includes salaries for actors and crew and supplies, such as Post-It notes and paper clips to lumber, cars and equipment.

There are some limits. No porn, live sporting events, political ads or award shows qualify for the incentive. And no individual project can receive more than $20 million.

North Carolina's film incentive is officially a tax rebate. But the state can lose money on the deal since it's based on overall dollars spent and not tax revenue.

For this to be an economic win-win, productions must spend enough money locally to make up the difference. And create full time, well paying jobs for North Carolinians that generate steady income tax for the state.

That's just what the film industry says it does.

Take "Under The Dome" for instance. "Currently the crew is made up of 202 locals and eight people from out of town." says Robbie Beck after a quick head count. 

Robbie Beck in his prop warehouse. Beck is the Property Master for CBS's "Under The Dome"
Robbie Beck in his prop warehouse. Beck is the Property Master for CBS's "Under The Dome"
Credit Tom Bullock/WFAE News

Beck is the head of the props department. He's responsible for finding the random things found on set. "Oh, license plates, people's wedding bands and if you have a stunt with an axe we supply the rubber axe," states Beck.

In essence, he's a professional hoarder. And if he doesn't have what he needs in his warehouse, he buys or rents it locally.

And he has money to spend. An average of $10,000 per episode for "Under The Dome," which shoots 13 episodes in a season.

"Just my purchases and rentals would be "$130,000 roughly. It's probably a little more than that at the end of the day because you always go a little over like you're building a house," Beck says.

Beck runs only one department and a relatively small one at that. Add in transportation, set decoration, catering and more.

It all adds up to a lot of buying and renting - and a lot of dollars being spent. In its first season "Under The Dome" spent more than $33.4 million in qualifying dollars in North Carolina. And received an $8.3 million check from the state for doing so.

That's only one of the TV shows being filmed here. Last year TV shows filming in North Carolina spent more than $180 million statewide. And they received more than $45 million in subsidies.

Sounds like a good return on investment - right?

It depends on how you run the numbers on jobs, spending, even tourism. That story in part 2 of this series.