VOL. 121 | NO. 177 | Friday, September 8, 2006
State Film Incentives Offer Clue About Village Roadshow in Memphis
By Andy Meek
New $10 Million
Film Incentive Fund
Will be disbursed starting Jan. '07
Part of Gov. Phil Bredesen's $26.1 billion state budget for '07
Can incentivize an estimated 8 to 12 film projects in Tennessee.
For the big-league Hollywood film company that's in talks to set up a movie production hub in Memphis, it's lights, camera, inaction - at least for now.
On the one hand, sources have confirmed that either Village Roadshow Pictures Group or a division of that company is interested in opening a major operation in Memphis, an undertaking that would include building a soundstage and production offices. Village Roadshow, in turn, would spend $250 million on productions in the city over a five-year period.
But plenty of details remain to be ironed out, such as the prime ingredient to any real estate recipe: location, location, location. And, just as important, Village Roadshow - the Hollywood film company responsible for blockbusters like "The Matrix" trilogy - would apparently depend on new state tax credits to finance its move to Memphis.
Show - or no show?
That may offer a clue to the project's timetable, assuming the whole thing materializes. The way the tax incentive program the Tennessee General Assembly recently passed is set up, funds won't be available to filmmakers until January 2007.
But Village Roadshow's proposed Memphis operation, said State Sen. Jim Kyle, D-Memphis, is an example of the kinds of projects the film legislation was designed to encourage and reward.
"What we have in place is a $10 million, one-time fund," said Jan Austin, deputy director of the Tennessee Film, Entertainment & Music Commission. The group's executive director is David Bennett.
"David and I have been going through the process of establishing the criteria which people will have to match in order to qualify for it," Austin said. "Then it has to go through the procedure of all of the legal processes in the state to make sure that the language is cool, which is always the longest process around here. And the $10 million - that's it."
That's the maximum amount for now. Gov. Phil Bredesen's $26.1 billion budget for 2007 includes $10 million set aside for state officials to offer rebates to filmmakers who spend money in-state.
Film officials plan to begin dipping into the fund come January, handing out awards to movie projects that are deemed worthwhile, until the fund is used up.
Limited resources, information
Once that's done, those film officials can go back to state legislators and present hard evidence that the fund is indispensable, showing a list of projects the fund brought to the state - and why the fund possibly needs to be enlarged.
"It's $10 million of nonrecurring money, so it's not going to last forever," Kyle said. "Of course, one of the downsides of having a low-tax state is that it's hard to give tax incentives away for people to come here, because we're not taxing them to begin with.
"What they forgive taxes for in some states, we never tax to begin with in our state."
One reason the fund is important, especially to Memphis, is Village Roadshow has expressed an interest in using the city as a supplemental location to what the company already has in Los Angeles and Australia.
And some of the recent Memphis-based film productions, such as Craig Brewer's "Hustle & Flow," are appealing to the company, according to sources with knowledge of the negotiations.
For its part, the state Film, Entertainment & Music Commission still isn't saying one way or the other whether Village Roadshow has Memphis on its radar.
"It's not ours to talk about - it's theirs," Austin said.
Our piece of the pie
Village Roadshow has maintained a co-producing agreement with Warner Bros. Entertainment Inc. since 1998 and is the movie company responsible for such films as 2001's "Ocean's Eleven" - with George Clooney, Brad Pitt, and other big-name celebrities - as well as 2005's "Charlie and the Chocolate Factory," starring Johnny Depp.
Village Roadshow Limited, parent company of Village Roadshow Pictures, reported net profit for the 2005 financial year as $40.7 million Australian dollars after taxes, specific items and discontinuing operations, according to its annual report. The company's divisions include cinema exhibition, theme parks, radio stations, film distribution and film production.
Meanwhile, Tennessee lawmakers are expecting that the first round of film projects approved to receive some of the $10 million enticement will be Memphis projects, Kyle said.
The Tennessee General Assembly, currently out of session, starts up again on the second Tuesday in January.
"And I would be surprised if the wheels had not started already turning for the mechanism of approving grants by that time," Kyle said.
Next act, next scene
State officials estimate the $10 million fund is enough to be spread between eight to 12 film projects in Tennessee. Sometime this fall, applications will be prepared that will be made available to filmmakers who want their projects to be eligible for the money.
Screenplays already are flowing in to state film officials for consideration, and the lucrative fund has generated a flood of calls, Austin said. But the script for what happens next - and how Village Roadshow fits into the picture - is still being written.
"Come late fall, into the first of the year, we will have made some hard and fast decisions about who's going to receive the incentive," Austin said. "But I think things are going to be quiet for a little while, and I'll tell you why.
"Since this is a one-time fund, it makes no sense for us to throw the doors open and advertise. We can't do like Louisiana does and basically say, 'Here's the money - first come, first serve,' because it's a limited supply."