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'Avatar' tax break a win-win for film studio, New Zealand

| Friday, Dec. 27, 2013, 7:36 p.m.

LOS ANGELES — In the old days, filmmakers flocked to Hollywood for its abundant sunshine, beautiful people and sandy beaches. But today, a new filmmaking diaspora is spreading across the globe to places like Vancouver, London and Wellington, New Zealand.

Fueled by politicians doling out generous tax breaks, filmmaking talent is migrating to where the money is. The result is an incentives arms race that pits California against governments around the world and allows powerful studios — with hundreds of millions of dollars at their disposal — to cherry-pick the best deals.

The most recent iteration of the phenomenon occurred this month when James Cameron announced plans to shoot and produce the next three “Avatar” sequels largely in New Zealand. What Cameron gets out of the deal is a 25 percent rebate on production costs, as long as his company spends at least $413 million on the three films.

“There's no place in the world that we could make these sequels more cost-effectively,” producer Jon Landau said. It is neither the archipelago's volcanoes nor its glaciers that are attractive because the “Avatar” movies will be shot indoors.

Sure, Peter Jackson's award-winning special effects infrastructure is there, but the deciding factor was the money. “We looked at other places,” Landau said. But in the end, “it was this rebate.”

In exchange, the local economy will benefit hugely, Landau said, comparing the ripple effect with the boost that comes from new home construction. “We're doing lumber, we're catering for hundreds of people a day. We're housing people in hotels. We're going to a stationery store and tripling their business in a year.”

The deal was “the best Christmas present we could have possibly hoped for,” said Alex Lee, an Auckland, New Zealand-based entertainment lawyer.

The news is especially welcome because the local screen industry is experiencing a potential drought: The Starz pay-TV series “Spartacus” finished this year, and Jackson's “The Hobbit” trilogy is set to wrap next year. Thanks to the “Avatar” sequels, the 1,100 workers at Weta Digital Ltd., the ground-breaking digital effects house Jackson co-founded in 1993, can keep plugging away through 2018.

“It would have been a real shame if we had lost any of that talent and they had to move to follow the films,” Wellington Mayor Celia Wade-Brown said.

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