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Pittsburgh Tries to Keep Its Budding Movie Role

Jan 02, 2015 15:07:00 (ET)

By Kris Maher
PITTSBURGH--This former steel city has become a center of movie and television production, but the uncertain future of state tax incentives has advocates concerned that the region could soon lose that starring role.

Spending on film and television projects in this city hit $150 million last year, up from about $10 million a decade ago, according to the Pittsburgh Film Office, an economic-development nonprofit. Several film producers said the city's range of backdrops, relatively low labor costs and mild summer weather have helped to push it onto the list of top U.S. locations where major movies are filmed, along with such places as Atlanta, New Orleans and New York.

Outside downtown Pittsburgh, in a former steel mill transformed into a 300,000-square-foot studio space, crews were busy working in recent weeks on elaborate sets for two $80 million-plus movies, "The Last Witch Hunter," starring Vin Diesel, and "Concussion," starring Will Smith.

Dawn Keezer, head of the Pittsburgh Film Office, said the city is benefiting from a 2012 boost in statewide incentives that put Pennsylvania on equal footing with Louisiana and Georgia. Companies that spend at least 60% of their project budgets in state at qualified facilities can get the equivalent of 30% of that money back under a measure signed by outgoing Republican Gov. Tom Corbett. The incentive is in the form of a tax credit that can be used by the film company or sold to Pennsylvania corporations, which use them to offset their state taxes. Kevin McQuillan, a Pittsburgh accountant whose firm audits film-company expenses, said the credits typically sell for 90 cents on the dollar.

The state caps the total amount of incentives money at $60 million per fiscal year. Ms. Keezer and others want governor-elect Tom Wolf, a Democrat who takes office later this month, to raise that cap to $100 million, or remove it altogether. New York's tax credit is capped at $450 million, while Louisiana's limit is $150 million and Georgia has no cap. Local lawmakers have joined the effort. "We're hopeful that he's going to see how important the film industry is," Ms. Keezer said.

Mr. Wolf, who faces a potential $2 billion state budget gap next year, hasn't taken a public stand on the issue. Jeffrey Sheridan, a spokesman, said Mr. Wolf would thoroughly review all programs that affect the budget as he tries to solve the state's fiscal woes.

Film tax credits have drawn opposition in many states. North Carolina and Michigan recently eliminated some tax breaks for the industry after critics said the programs cost the states revenue without creating promised jobs. In Maryland, state legislative analysts in October recommended letting the state's film tax-credit program expire in 2016.

Joe Henchman of the Tax Foundation, a Washington, D.C., think tank, said that while the incentives boost film projects and create jobs in the short term, the programs aren't cost-effective and have been shown to not benefit longer-term job creation in some states. "The money can be better used for almost any other form of economic development," he said.

Meanwhile, other states are boosting their film tax credits. Most notably, California recently more than tripled its incentives package to $330 million a year in an effort to lure producers back to Hollywood who had been drawn elsewhere by incentives.

Pittsburgh has other draws. Its dense downtown can double for New York or Chicago, and its bridges, hills, old neighborhoods and industrial sites provide a range of backdrops. The 300,000-square-foot studio space is the largest outside Los Angeles and New York, and several others are being built.

Pittsburgh has a long film history. Scenes from the "Perils of Pauline," a 1914 serial cliffhanger that featured a damsel in distress, were filmed here. George Romero's "Night of the Living Dead" was filmed in 1968, and two best picture winners, 1978's "The Deer Hunter" and 1991's "The Silence of the Lambs" were both shot here.

"When you're saving 25% to 30% of the money you're spending, why wouldn't you take advantage of that? It makes no sense to ignore it," said Bernie Goldmann, a producer of "The Last Witch Hunter" from Lions Gate Entertainment Corp., which is believed to be the most expensive movie ever filmed entirely in the region.

Mr. Goldmann said the movie was written to have a New York look and there was no way to shoot it in Georgia or Louisiana. The production used several locations that included two city churches, a nearby abandoned mine and an old bakery. "The great thing about Pittsburgh is you can have so many different looks," he said.

Lions Gate has filmed six projects in the city since 2008. In 2014 it hired 80% of the 1,500 crew members for "The Last Witch Hunter" from Pittsburgh, compared with a local hiring rate of about 65% six years ago, said Michael Paseornek, the company's president of motion picture production.

On a recent day, Chris Breakwell, owner of 31st Street Studios, the city's biggest sound stage, pointed to a spot inside the 60-foot-high former steelmaking complex that once held industrial machinery but now contained various sets built from fresh lumber for "Concussion."

"It's nice to take an old industry in Pittsburgh and create modern-day jobs," he said.

Write to Kris Maher at [e-mail]


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January 02, 2015 15:07 ET (20:07 GMT)