Wednesday, May 11, 2011

Michigan Firms Suffer From Lost Movie Business

Detroit News: The uncertainty over funding Michigan's film incentives — sparked by a proposed $25 million annual cap — is hurting local businesses from hotels and restaurants to security firms that benefited from movie and television productions over the past three years.

The four-star Westin Book Cadillac in Detroit has booked more than $1 million in overnight room sales since Michigan's film incentive program began in April 2008, said Amanda Toy, the Westin's group sales manager. Earlier this year, it lost $280,000 in business when Marvel Studios chose to shoot a major production in another state, Toy said.

Likewise, Homewood Suites by Hilton-Detroit/Troy learned March 15 that it was losing $124,000 in planned business this year when film crews for the romantic comedy "My Beautiful Mistake" canceled a booking of up to 30 hotel rooms, said hotel sales director Robert McCullough. The production asked the state for a $6.8 million cash rebate based on a projected $17.3 million in spending in Michigan.

"The tax incentive (proposal) pretty much scared them, so they're moving the entire project out of Michigan," McCullough said, adding that film business last year generated revenue for the hotel of nearly $96,000.

Representatives of "My Beautiful Mistake," a mob comedy, could not be reached for comment. But producer Warren Ostergard of Vitamin A Films told The Detroit News in late March that if his film doesn't get a state incentive, he will go to a state that gives one.

McCullough said business from the film industry helped save some of the Troy hotel's 35 jobs during the recession, when corporate business dwindled. "It came at a really good time. The automotive industry around 2008 and 2009 started drying up," he said. "At that same time, we started picking up film business from films 'Gran Torino' and 'Red Dawn' and few other smaller films."

But continuing those levels of sales — which also have aided caterers, car rental companies and restaurants — is in doubt after Gov. Rick Snyder on Feb. 17 announced plans to change the state's uncapped incentive program to a $25 million annual limit in fiscal 2012 and 2013.

Many firms this year got bookings or expected to land business from Marvel's "The Avengers," but it was among the first films to leave the state following Snyder's proposal. "The Avengers" planned to spend $33.67 million in Michigan, including nearly $2.2 million in lodging, more than $453,000 in contracted services such as security and $950,000 in food expenses, according to its incentive application.

RSIG Security lost four work deals when four productions pulled out of the state after Snyder's announcement, said Michael Whittaker, president and CEO of the Southfield-based company that did about $1.2 million in film business last year. The movie work would have brought in about $750,000, he said.

RSIG Security's Whittaker, like other film rebate supporters, is lobbying state lawmakers and hoping for a compromise. "I'm trying to stay positive," he said, "but knowing what we've already lost, you sort of have a hopeless feeling."

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