Once a growing hub for moviemakers, North Carolina hopes to regain a foothold in the industry
This past March, Governor Roy Cooper outlined a plan to boost film and TV production revenue statewide. Cooper’s proposal is an attempt to stem the tide of productions leaving North Carolina for more incentive-friendly states like Georgia and Louisiana; in a perfect world, the plan would not only entice those productions to return, but also lure others to join them when it goes into effect in January 2018.
The exodus was partially due to the expiration of a tax credit system that previously offered film, television, and commercial productions a 25 percent refund on qualified spending, up to $20 million. In both 2013 and 2014, productions claimed over $60 million, and a whopping $83 million in 2012. When the tax incentive program terminated at the end of 2014, it was replaced with a grant system that featured a flat $10 million per year, a pool made available only to qualifying productions.
According to Rob Shoaf, managing director of the Triangle Regional Film Commission, the elimination of the tax incentives “effectively gutted the indigenous production industry across the state, and especially in the areas not considered production centers. The Western Carolina office was closed, the Triad and Triangle offices were drastically cut back, and Charlotte and Wilmington saw their lists of possible productions curtailed.”
Productions fled North Carolina because “it’s a simple numbers game,” says Eric Roth, co-founder of Raleigh’s Dailypint visual effects studio. “Georgia has great tax incentives that most are flocking to. The base amount to take advantage of that is a $500,000 minimum, which is why Atlanta is booming right now.”
The base amount to which Roth refers is the minimum that a production must spend in order to qualify for a grant. In Georgia, that minimum is half a million dollars; in North Carolina it’s currently $1 million per episode for a TV series and $5 million for feature films. That leaves many smaller, independent productions—both narrative and documentary—out of the loop. In 2015, Georgia hosted almost 250 TV and film productions with a $6 billion impact on the state.
The Full Frame Documentary Film Festival has been a mainstay in Durham for over two decades. The festival’s director, Deirdre Haj, notes that tax incentives impact the overall environment for the film industry, as “filmmakers often need to move back and forth between these industries to have enough work to survive. Most people that work in entertainment are not on-screen talent or millionaires; they drive trucks, haul lights and cable, run equipment and do hair and makeup, and they buy homes and cars and pay taxes. Many of those folks have moved to Georgia, where incentives are strong.”
Cultivating talent at home
While the situation sounds dire, it should be noted that not everyone’s shipping out. In fact, some filmmakers like Raleigh native and NC State alum Patrick Shanahan of Denim Buffalo Film Collective are doubling down on their home base. Shanahan, who directed local documentary The No Hand King, will shoot his feature The Hounds of Dixie in-state, but he bemoans the loss of opportunities for local filmmakers.
“The truth of all this is that NC does very little for filmmakers here already in the state,” says Shanahan. “The Hounds of Dixie has a $500,000 budget so we don’t even qualify for an incentive in our own state.”
Amidst the uncertainty about the industry’s future in the state, writer/director/producer Shanahan is committed to making the Triangle a burgeoning axis of production activity, and he’s optimistic about opportunities for growth. For starters, he is planning a co-op film studio in Raleigh specifically due to the area’s inimitable development as a national and global hub for technology. “The studio I envision is a modern, energy-efficient ‘pre’ and ‘post’ facility with resources for filmmakers, musicians, video game developers and the like to produce and create their work from beginning to end,” he says.
In Shanahan’s vision, his studio works with out-of-state productions while fostering young talent coming out of North Carolina’s universities. His goal? Stimulating creativity in a way that will benefit the filmmakers’ individual careers as well as the entire state.
Indeed, many local talents have left the state and turned to Georgia for their productions. Case in point: Durham natives Matt and Ross Duffer, known professionally as the Duffer Brothers. Their hit Netflix show Stranger Things became a cultural phenomenon and could have been filmed in North Carolina given the right environment. Matt Duffer told the Hollywood Reporter: “We’re actually from North Carolina, so when we wound up in Atlanta and I started scouting Atlanta, we got excited about it, because it looked actually much more like our own childhoods.”
Had there been enough incentive perhaps the Duffer Brothers could have filmed the show, now in production for a second season, in North Carolina, bringing accolades to the state and boosting its economy.
Raleigh’s Trailblazer Studios has a similar mission to Shanahan’s. Vice President of Sound + Engagement Eric Johnson points out the company’s strong outreach to colleges and universities in North Carolina, which not only brings in talented, media-savvy students, but also entices those students to stay in state to work after graduation. “There’s a myth that you have to live and work in New York or Los Angeles to have a career in this industry,” Johnson says. “We’re trying to dispel the myth and create those opportunities [in the Triangle].”
Late to the party
The remaining question, then, is why has the Triangle lagged behind other areas of North Carolina in the realm of film and TV production? Shoaf says that the Triangle “is at the center of the last area of the state that was without aggressive professional representation to the industry by a dedicated regional representative. We were a bit late to the party when other areas, with ongoing funding and several years track record
in place, were making their pitch to the Hollywood producers. Even so, from a low of zero production dollars in 2010, the TRFC was instrumental in growing production spending in the Triangle to around $5 million/year just before the incentives were withdrawn.”
Other local media companies who may not be as affected by the tax breaks will still continue to flourish, primarily because they’re providing services for bigger productions. Dailypint’s Roth notes that plenty of productions shoot in Atlanta but send the post-production work like editing and visual effects back to California—or elsewhere–for the final pass. There’s no reason pre- or post-production outsourcing can’t continue to work here in the Triangle.
Even Triangle-based business that aren’t actively involved in production have managed to carve out their niche. A/V Geeks, helmed by Raleigh’s Skip Elsheimer, focuses on digitizing non-theatrical and academic films, creating one of the country’s largest libraries of 16mm film. Like Dailypint, the contracts A/V Geeks earns are most frequently from out of state—with productions of all sizes farming out motion-capture, virtual-reality and digitization work in a manner practically impossible a generation ago.
While bringing back major film, TV and commercial productions (and keeping them) is clearly one of Governor Cooper’s priorities, nurturing promising young filmmakers and keeping them working in-state tops the list of a number of local media businesses’ goals.
Trailblazer’s Johnson promotes the idea of tax credits or incentives for companies who ground themselves in North Carolina, akin to in-state tuition for state universities. “I’d ideally like to see us revisit [the incentives] in a way that supports everyone,” he says. “I’d love to see all parties come to the table for a creative solution.” Johnson’s in-state “advantage” would apply to companies that move to the state and establish a presence instead of “dropping in” and doing the finishing work in New York or L.A. “That way, you’d need to commit to the area and make a home for North Carolina graduates” before earning any kind of tax break or incentive.
Full Frame director Haj would like to see a similar incentive available to students who graduate from in-state universities, a proviso that would allow a financial incentive which would be tethered to their debuts. “If you graduate in North Carolina and you make your first film here in our state, perhaps there is a financial incentive for that,” she posits. “It’s a great way to attract and retain young talent that is trained here and perhaps can stay here.”
In the long run, will even amending the current plan, as Governor Cooper proposes, have the desired impact? Shoaf believes it will. “If our indigenous resources bounce back and funding rebounds for both filmmaking incentives and film commission support that make North Carolina production spending make sense to them, the commercial industry from Hollywood and beyond would love to return,” he says. “But they will do so only if they know there will be a long-term dedication by not only the filmmakers, but also the legislative, educational and business communities.”
Looking toward the future, Shanahan says that “North Carolina has to fix itself from within and build up with what we have here, before we can return to the thriving film climate we once had. These are tough times in North Carolina for film, but we’re going to continue to shoot and work here no matter what.”