Pittsburgh film project's tax-credit nail-biter has happy ending
By Jason Cato
Published: Thursday, Jan. 23, 2014, 11:18 p.m.
A Pittsburgh film project with Russell Crowe nearly went south on Thursday, with a threat to pull out of Pennsylvania and head to New Orleans or Atlanta because the state wanted to dole out film tax-credit money over several years instead of in one lump sum.
“We were going to pull up stakes and go somewhere else, if we had to,” said producer Richard Middleton, who is set up Downtown to begin work on “Fathers and Daughters.”
The $16 million Voltage Productions film is set to shoot for about eight weeks, starting in mid-March. This week Middleton intended to sign deals with studios, hire crew members and make a $36,000 payment for a rental home for Italian director Gabriele Muccino and his family.
The Pennsylvania Film Office called Voltage executives in Los Angeles on Wednesday to say the production was approved for a $5.7 million tax credit.
A Thursday morning email from the state explained the rebates would be issued over three of the next four fiscal years — on the condition that the tax-credit program continues.
All work on the project halted temporarily.
“How do we even know there will be a film tax credit in Pennsylvania in three or four years?” a frustrated Middleton asked. “That was not the understanding, nor was it ever explained to us that this was even a possibility.”
A spokeswoman for the state Department of Community and Economic Development, which oversees the film office, said no one could comment immediately on the on the multi-year deal. Gov. Tom Corbett's office did not return a message.
Behind the scenes, Middleton, Pittsburgh Film Office Executive Dawn Keezer, Allegheny County Executive Rich Fitzgerald and state Sens. Wayne Fontana and Jay Costa worked the phones with Community and Economic Development officials to change the decision. They received assurances that Voltage would get its money from this year's allotment.
“We are very fortunate that our elected officials understand the importance of this industry to the region's economy and our local crews' and vendors' livelihoods,” Keezer said.
Fontana, D-Brookline, said it's all about securing jobs that would go elsewhere: “We were going to lose the film if something wasn't done here.”
Postponing production of “Fathers and Daughters” was not an option, said Middleton, a producer of “The Artist,” which won five Academy Awards in 2012, including best picture.
Schedules are set for Crowe and other actors, such as Amanda Seyfried and Aaron Paul.
“If we push (the starting date), we lose them,” he said. “And we're not going to lose them.”
Crowe would play a Pulitzer Prize-winning author who raises his young daughter in New York City during the 1980s after his wife's death. The story explores the father-daughter relationship and family drama.
It was one of 16 projects with pending tax-credit applications. The film office also approved a $1.7 million tax credit for an ABC television pilot, “How To Get Away With Murder.”
It has yet to process applications filed before Dec. 20 for three projects waiting to come to Western Pennsylvania, Keezer said. Two others plan to apply soon, if the year's allowance doesn't run out. She hopes to use as much as $20 million she said was approved in previous years but never claimed.
Pennsylvania in 2004 became the third state to offer a film tax-credit program to attract jobs and investment. More than 40 states have similar programs.
Pennsylvania revamped its program in 2007 to provide $75 million annually for film tax credits. Lawmakers since whittled that amount to $60 million.
The program allows filmmakers who spend at least 60 percent of their production budget in Pennsylvania to apply 25 percent of production expenses spent here to offset state taxes. Filmmakers can receive a rebate or sell the tax credit to recoup money once a project is completed and the state audits its expenses.
Since its inception, the film office has awarded $401 million in tax credits, according to the Department of Community and Economic Development.
Senate Majority Leader Dominic Pileggi, a Delaware County Republican, has introduced legislation so there would be no limit to annual tax credits for a program he has not always favored.
“I wasn't interested in subsidizing Hollywood starlets to come to Pennsylvania. But the reality is most of the jobs (added by film productions) are for caterers and carpenters and others. These are good, family-sustaining jobs,” Pileggi said. “We have to realize we are in competition with other states for this work. We simply cannot have a successful film industry if we don't have a competitive film tax-credit program.”
Critics say lawmakers should scrap all tax-credit programs and slash taxes to be fair to all industries, said Nate Benefield, vice president of policy analysis for the Commonwealth Foundation, a free-market policy group in Harrisburg.
“You shouldn't be treating the film industry differently than manufacturing, service or other industries,” Benefield said. “There's no doubt lower taxes attract investment. Some of these films might not come without the breaks. But that's also true for other industries.”
Keezer said the film industry invests more than other sectors.
“We have brought in $100 million into our region the last four years in a row,” she said. “There is no other industry doing that.”
Jason Cato is a Trib Total Media staff writer. Reach him at 412-320-7936 or email@example.com.
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