Film tax credit benefits for state? Iffy
A Las Vegas company fabricates high-end aquariums for high-end clients and delivers the goods to celebs such as comedian Tracy Morgan and actor Neil Patrick Harris for TV entertainment.
Meanwhile, celebrity chef Robert Irvine whips his way through Oklahoma, New York, Oregon and Washington to save struggling eateries on camera.
And Pennsylvania taxpayers shell out millions to make that reality TV magic happen.
In the 2014-15 fiscal year, state film and television production tax credits paid more than $3.75 million to Nancy Glass Productions and MSPT, the Philadelphia-area production companies behind the Animal Planet show “Tanked” and the Food Network series “Restaurant: Impossible,” even though little filming for either ever occurs in Pennsylvania.
Neither company responded to messages seeking comment.
The Pennsylvania Film Office in Harrisburg is finalizing its 2015-16 report before submitting it to state lawmakers. The annual summary will detail more lucrative tax credits for each company.
State Sen. Wayne Fontana, D-Brookline, said the point of the film tax credit program is to create jobs and promote Pennsylvania.
“If Pennsylvania is not getting any notoriety or credit, then that is a problem,” said Fontana, who for years has tried to raise the program's $60 million annual cap that once was at $75 million.
The state program provides a tax credit of as much as 25 percent of a filmmaker's production budget, provided that at least 60 percent of that budget is spent in Pennsylvania. Productions using certain studios in Pennsylvania are eligible for an additional 5 percent credit.
Beginning next fiscal year, post-production work will be eligible for a 30 percent tax credit. Available film tax credits are slated to increase to $65 million.
One program goal is to spur economic growth, which includes attracting production companies to the state to increase “the number of projects filming in Pennsylvania,” according to guidelines from the state film office. Other objectives are to provide jobs in the film and film-related industries as well as support tourism in Pennsylvania.
Criteria used to determine which projects receive money include the number of days a qualified studio in the state will be used, total amount of production that will occur in Pennsylvania, the number of Pennsylvanians who will be hired, how much money will be spent in the state and other criteria determined by the director of the state film office, which falls under the Department of Community and Economic Development.
“The weighting of these criteria is confidential and cannot be disclosed,” said DCED spokesman David Misner, who noted that both “Tanked” and “Restaurant: Impossible” qualify for tax credits as the law is written despite being mostly filmed elsewhere.
Perhaps changes are needed, Fontana said.
“That is potentially a problem with the mission of the program,” he said. “They are meeting the loose criteria for them to qualify. Maybe we need to tighten it up.”
Less for new productions
Dawn Keezer, director of the Pittsburgh Film Office, fears record years for film and television projects in Western Pennsylvania could be in jeopardy because of the way the tax credit program is being used.
Production companies spent more than $100 million in the region during each of the past six years and have spent $1.1 billion here since 1995, the Pittsburgh Film Office reports.
But less and less is available for new productions each year, Keezer said, even with $5 million set to be added next year since post-production work will be eligible for tax credits. That includes Billy Penn Music, a for-profit venture that the Greater Philadelphia Film Office started this summer that offers a library of songs from Pennsylvania musicians for use in films, television shows, commercials and other projects.
“Everybody needs music in all of their shows,” said Sharon Pinkenson, executive director of the Greater Philadelphia Film Office. “We're getting work for more Pennsylvanians.”
For the past several years, the Pennsylvania Film Office has used up to 30 percent of future tax credits to provide multiyear funding for projects. West Chester-based QVC Network has claimed $41.4 million overall and more than $8 million in each of the past three years — somehow convincing state officials that the tax program's explicit ban of productions that “solicit funds” does not apply to the home-shopping giant.
Then Pittsburgh and Western Pennsylvania compete for what's left with productions in Philadelphia and the rest of the state.
This year, the Pittsburgh region landed “Fences,” an HBO movie based on an August Wilson play, and “Mindhunter,” a new Netflix series, as well as continued productions for two other television series: “Downward Dog,” which ABC picked up after the pilot filmed here in December, and a second season of “Outsiders” for WGN America.
Ongoing television series provide the type of work that Keezer has long wanted for Western Pennsylvania.
“Episodic work allows for long-term employment, internal workforce training and larger economic impact on a community,” she said. “(But) the tax credit program is woefully underfunded when compared to the amount of film work that wants to come to southwestern Pennsylvania.”
At least $100 million should be available each year, she said.
Keezer said it's not smart business for Keystone State taxpayers to offset productions that feature people and businesses elsewhere when incentives could go to productions that want to film in Pennsylvania.
“Given the limited funds, the priority should be on projects that shoot in Pennsylvania,” she said.
Pinkenson agreed that more money should be available for the tax credit program, but she strongly opposed restricting productions like “Tanked” or “Restaurant: Impossible,” even though they film 10 percent or less of their shows in Pennsylvania.
“It's of no concern to me,” she said. “We have a huge reality TV industry in Philadelphia. Reality TV shoots where it needs to shoot.”
MSPT, or Marc Summers Productions, has visited 40 states and Washington, D.C., to shoot 13 seasons of “Restaurant: Impossible.” Of its 160 episodes, 17 filmed in Pennsylvania.
To date, “Restaurant: Impossible” has received or been approved for $8.4 million in Pennsylvania film tax credits — $5.5 million of which has come since 2014, records show.
MSPT is affiliated with Alkemy-X, a production company with offices in New York City and Philadelphia. Summers, based in Beverly Hills, Calif., serves as executive producer of “Restaurant: Impossible” and hosts “Unwrapped” on Food Network.
The partnership also is behind “Food Feuds” and “Dinner: Impossible” on Food Network. Those shows have collected $2.55 million in Pennsylvania film tax credits, records show.
Nancy Glass Productions rebranded in April to Glass Entertainment Group after forging several new production ventures.
The Philadelphia Inquirer in 2015 called the company based in a Philly suburb one of the country's top reality TV producers. Its credits include shows such as “Staten Island Cakes,” “Save My Bakery,” “Kitchen Impossible” and “Dangerous Grounds,” which travels the world with Todd Carmichael, CEO and co-founder of a Philadelphia-based coffee roaster as he searches for premier beans.
Since 2007, records show Glass has received or been approved for nearly $12 million in tax credits — with $5.8 million for “Tanked,” which features the exploits of Las Vegas-based Acrylic Tank Manufacturing and its owners Wayde King and Brett Raymer. Less than 4 percent of shooting has occurred in Pennsylvania, according to records from the state film office.
The company this year launched three new television series. None film in Pennsylvania.
“The Vet Life” debuted on Animal Planet in June and features a clinic and animal shelter run by three veterinarians in Houston, Texas. The show is approved for $435,000 in film tax credits from the 2016-17 budget, records show.
The state film office is reviewing a tax credit application for “Big Easy Motors,” a Glass-produced show that the History Channel introduced this summer about a classic car restoration outfit in New Orleans.
Another new Glass show is “Desert Flippers,” an HGTV program focused on a real estate couple in Palm Springs, Calif.
These Philadelphia-area companies and others provide jobs and perform pre-production and post-production work in the state, Pinkenson said.
“The reality of our reality TV companies is that these are companies that have full-time employees, multiple employees who are getting 401(k)s and who are not freelancers,” she said. “These people have full-time jobs developing and then getting approval from the networks. All of the pre-production and planning and all of the post-production is done in-house. They could have 80 people working in one of these companies full-time as opposed to gearing up for a couple of months with freelancers.”
While it is nice to have movies and television shows film in Pennsylvania, that is not the most important aspect of the tax credit program, Pinkenson said.
“Tourism is a side effect. If we were only looking for projects that promoted tourism, we wouldn't have very many projects,” she said. “All over Pennsylvania we're shooting projects for stories that have nothing to do with Pennsylvania. You don't want to lose jobs over (tourism.) That's silly.”
Jason Cato is a Tribune-Review staff writer. Reach him at 412-320-7936 or firstname.lastname@example.org.