Cinematography and Citizenship, M3 goes to Lansing

My career in the Boy Scouts of America was, to paraphrase Hobbes, brutish and short. But ah… those merit badges!

Here are two of the many merit badges that I did not earn when I was a Boy Scout – Cinematography and Citizenship in the Community. I’d like to think that I’m NOW getting close to the requirements on the first and after the last couple of weeks, I might have a shot at the second.

On February 27, M3’s hosting a SWOT with Deb Havens. All the great movie tribes of Northern Michigan will gather at the Inside Out Gallery in Traverse City to assess our collective Strengths, Weaknesses, Opportunities and Threats, hence SWOT. One of the issues that is sure to come up is the Michigan film credits / incentive and whether the Michigan legislature gets us yet… or not.

Deb Havens (Rex Larsen/The Grand Rapids Press)

Blissful ignorance of Lansing has been my personal policy, pre-SWOT.  For the sake of the COMMUNITY, I’ve offered myself as the lamb, exposing my innocent, artistic soul to the miasmic depravity of politics. Kind of fun actually, mostly because I’ve read Bruce Sterling’s Distraction about 12 times. Anyway, as a warm up to our SWOT next week, a little muck raking! If YOU have any Michigan film incentive war stories, please post!

IE Effects (IEE) is a visual effects and post-production studio based in Los Angeles. They HAD an office in Traverse City and were poised to bring plenty of skilled full time jobs to our region, but due to the film incentive debacle, (which is still in progress), IEE closed their doors. I asked Clover Roy, former Director of Regional Operations for IEE to give me some background.

Clover Roy with Patrick Barrett and Dennis Michel at IEE March 2011
(Record-Eagle/Keith King)

I then introduced myself (and the Michigan Movie Makers) to State Representative Ray Franz (District 110) and State Senator Howard Walker (37th District) and asked them where the film industry was on their radar screen. I also tried scheduling a meeting with Senator Darwin Booher but his office didn’t respond to my email.

The odyssey begins with the sparkling and erudite Clover Roy. She makes me want to launch an ambitious project just so I can work with her!

Interview with Clover Roy at Brew in Traverse City on 2/7/13 5:12 PM

Dan So you were in LA, working as a production manager, did you even know about IEE when you came here (Traverse City)?

Clover No, I didn’t know about IEE and they did not know about me. Many people mistakenly think that I came here for them, but it was just a happy circumstance. I’m a single mom, head of my household, film production doesn’t really work for me anyway, so wow, my connections land me a job running this visual effects company… and they are thrilled to find somebody with film production experience who knows the language and knows what it’s all about. They also have an interest in expanding into production as well. The founders and owners of IEE…

Dan David Kenneth?

Clover Yes, their background was in film production. So here we are working on Harry Potter and Deathly Hallows Part 2, the Green Lantern and all this great stuff, then the film incentives change dramatically, pretty much at the moment we are opening our doors. So I’m ordering chairs and phone service, and Rick Snyder’s got his axe on the desk… so we finish those projects and almost immediately, everything in the pipeline falls away. My job after those projects were over in 2011 was basically to do anything I could to keep the film incentives from dying completely. You are about to talk to people I’ve spoken to, I testified in front of the Senate, I testified twice in Lansing, once in front of the House of Representatives. Wayne Schmidt is our Representative for the 104 District, he was very sympathetic because we told him about the hundreds of jobs we were going to bring into Traverse City, his hometown, his district. So he was very keen to help us out and he was awesome. Everyone that came in initially and unabashedly had the attitude of… Hollywood, liberal, film… don’t want anything to do with it, and agreed that Rick Snyder was doing the right thing for the state.

  

Dan Uh huh.

Clover After they walked through the glass that was attached to the bricks that housed the computers… a place for young entrepreneurs, they went “oh… oh… ok, what is this you’re doing now here?” And we turned their heads completely, they walked out of there huge fans of IEE and the film incentive in general.

So cut to Wayne Schmidt and I in Lansing being instrumental in recrafting (the incentive), he was actually the one who threw in, “I think it’s a good idea for 5% of the film incentive budget to go towards post production,” and they passed that. So out of the 50 million that we have now, do the math, 5% is earmarked for post-production.


Representative Wayne Schmidt

Dan When it all came crumbling down earlier on, how much work was lost in numbers for IEE?

Clover I can’t even say that because after those projects, it’s not like we had contracts worth x amount of dollars that evaporated, it’s just that no one else would talk to us. I don’t know how you put a dollar amount to people not answering your phone call. Warner Bros, the Fox library… they are about to convert every single one of their movies to 3D, whole libraries we were lined up for.

Dan IEE was one of their designated vendors for that service?

Clover Yeah

Dan Wow, which would have meant years of work, a huge staff of roto people… 20 or 30 or more?

Clover Oh, our goal was to have 150 people working. David envisioned a whole technological digital arts campus at Building 50, his vision and his dream was so dynamic and so far reaching… and that really captured people’s imagination that we talked to. That’s why Wayne Schmidt had me in his office with the owner of Raleigh Studios in Pontiac (now Michigan Motion Picture Studios) because he saw us as bookends, Traverse City and Pontiac, two of the companies that actually had done what Michigan asked us to do, and probably prematurely. We invested in the infrastructure. They didn’t care so much about people flying in from Hollywood and going back to add another bathroom to their Malibu cottage, they wanted people to build companies here in Michigan – which is what we did. Then when it changed the rug just came out from under us.

It wasn’t so much that there was no incentives left because clearly there were, and then Snyder actually doubled it to 50 (million). “Oh that’s cool, great let’s go!” There’s money to play with at least, but the perception that Michigan was so wishy washy and wasn’t to be trusted was still very firmly in place. The damage is done, and I’m not saying it’s done forever but it unraveled to the point where it’s going to take a lot of pretty magical stitching to get it back.

________________

…but the perception that Michigan was so wishy washy and wasn’t to be trusted…

________________

Dan So the stupid rivalry between the Republicans and the Democrats f-ed us. Anything the Democrats put in place can’t be good, gotta just get rid of it.

Clover That’s part of it, I don’t know where Rick Snyder gets his agenda, his whole thing was, the incentives aren’t good, incentives are bad. Ok look, here’s an incentive, bad! Kill it. So he swept us out – baby in the bathwater. It didn’t help that Hollywood is (perceived as) a liberal enterprise and that it (film incentives) was a Democratic agenda, all of those things didn’t help. And he’s a bean counter. The benefit of the film incentives in a state like Michigan where it’s not necessarily organic, like it was in Hollywood…

Dan Organic, what you mean?

Clover (Film) was strong in Hollywood because of the climate and it was as far away from New York as possible, Edison invented the camera and had the patents and people were trying to get away from that. So there was partly organic stuff going on in Hollywood and partly not, but a lot of it was climate… Michigan, when I got my chops in the film industry back in the 80s, we were thrilled, we called it the best kept secret in America because we worked all the time, all the time. I was 26 years old, I owned a minivan and that was where I got my start, in film production on commercials. So there was already a base here, which is what Granholm understood.

What’s an industry that doesn’t take a lot of capital investment, a lot of time and surveys and committees and bullcrap to get started? We need help right now. If I throw an inventive, what industry can I throw it at, that it can spring up in a second? I need a chia pet, (laughter). I just made that up! Yeah so, we were the chia pet of Jennifer Granholm’s imagination… and it worked! It just needed the whole 5 years that it was designed for, to create the industry.

I also have to say though, there’s no lack of fault on the part of a business owner like David Kenneth who relies so implicitly and almost exclusively on a government incentive for the success of his business. Love Kenneth, he’s like a brother to me now, but he didn’t have a back-up plan. And it didn’t help that the perfect storm, the other accounts he had that didn’t rely on a film incentive in Michigan or film production in LA for that matter, Motorola… (IEE) did a lot of visual effects, modeling for Motorola, both in house and some broadcast stuff. Google bought (Motorola) out and the  whole company shifted what vendors they used. Poof! So the glue that held IEE together in between big film projects was Motorola, and it was gone.

Dan Some people might say “Well IEE left because they were a troubled company, blaa blaa… It’s not about the changes in the incentive.”

Clover The fact of the matter is that if the incentives had stayed in place and Mr Warner Brothers was happy to take our calls, IEE would still be here.

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The next day I met with Representative Ray Franz and his staffer Jennifer Smeltzer at their Onekama office, about 30 minutes drive from my place in Beulah. Jennifer and I got our times confused so I was there an hour later than they expected, but after a short wait Ray, Jennifer and I had a great talk. I explained that I’d probably blog about our meeting and to save me from having to take notes like mad, Ray agreed to let me record the conversation.

Interview with Representative Ray Franz, Representative Franz’s Office, Onekama on 2/8/13 4:24 PM

 
Representative Ray Franz

Michigan Movie Makers What’s your perspective on film in Michigan?

Representative Ray Franz (Film) is a part of the business community that we’re trying to promote and yet keep away from the picking of winners and losers and promoting one certain agenda over another. I think from my perspective what we want to do is level the playing field as much as possible so that everybody prospers, so that Michigan is a place that people know reliably that whether it’s movies or pharmaceuticals or oil and gas, they can come to Michigan and prosper.

Michigan Movie Makers I think it came out yesterday that Snyder was thinking about knocking down the incentive budget from 50 million to 25.

Abraham Lincoln: Vampire Hunter, 2012

Representative Ray Franz  I haven’t had a chance to go over the entire budget, that’s one day away from his proposal…

Michigan Movie Makers I wasn’t even going to talk about that today, I just heard it on the radio on the way over…

Representative Ray Franz I have no idea what his numbers are on that, we haven’t had a chance to go through it. Not being on the appropriations committee, we don’t get the full insight until the Appropriations Committee puts a package together that’s worth considering, that’s when the rest of the legislature gets involved.

Michigan Movie Makers Have you been approached before about this issue?

Representative Ray Franz A gentlemen in Manistee has come up and talked a little bit about the film credits. He was concerned when we started talking about eliminating some of the credits… the credit philosophy, the credit procedures led to some abuses, some things that really we’re not intended with the legislation. So when we looked at that a couple of years back… where you could apply for a credit and just get everything paid back, yada yada yada, changed dynamics into an appropriations process so we had tighter control, still be able to help the film industry, make Michigan more film industry friendly, but have a tighter control so we wouldn’t have some of the mishaps that have happened now in Southeastern Michigan.

Michigan Movie Makers I guess I’m not up to speed on that, was there anything specific?

Representative Ray Franz One of the circumstances that happened for example was a facility got sold as a film industry asset to be developed and the value was grossly over inflated, so the film credit covered all of the investment instead of just a portion as it was intended.

Michigan Movie Makers So tightening up those criteria will prevent that kind of stuff from slipping through.

Representative Ray Franz Exactly, it’s our job as the legislature to have some oversight and make sure things are done appropriately, not just give a blank check to whoever wants it.

The Producers, 1968 (production still)

Michigan Movie Makers We want to make sure that the incentives go to develop the indigenous industry, people who are already here working hard to build the infrastructure… you can attract these projects but unless the people, facilities and resources are here, it doesn’t make any sense. I’m interested in discussing how that can happen.

Representative Ray Franz Does your organization have some suggestions? Something we can work with? Something we can do?

Michigan Movie Makers I’m here to open a dialog. (Michigan Movie Makers) is actually going to meet this month and talk about that very thing. What would our suggestions be, what do we want? What are we trying to create? I’d like to come back and give you some feedback.

Representative Ray Franz Quite frankly, I am a meat cutter by trade, I own a chain of grocery stores. I would have not the first clue as to what you’re talking about as far as the needs of a movie industry that we can afford as a state and be advantageous to the state as a whole. I have no idea where to go. What we are going to need is some feedback on how we to get to where your at and what are your suggestions.

Michigan Movie Makers We lost a major opportunity, a company (IEE) left Traverse City, they got hit hard by the change in the incentive program. (IEE) invested heavily in our area and then they… had to leave. I talked to their Director of Regional Operations, (Clover Roy), she told me that Fox… so you know about 3D movies? People go and wear the glasses and see the movies in 3D? Well, all the old movies can be converted to 3D, but it’s a time and labor intensive process called rotoscoping… (IEE) was about to get a contract with Fox to do their entire library, they would have needed between 40 and 150 artists… they were gearing up to take that work, the incentive program fell apart… Hollywood was like, “You (Michigan) don’t have your act together, we can’t count on you. You have this incentive program that was great, we were going to come in there and do some stuff, now you’re cutting it off… what are you going to do next?” It doesn’t matter that (the incentives) were put back, (Michigan is perceived as) unpredictable. They don’t want to deal with things that are unpredictable.

So anyway, (IEE) had all these things lined up… and then no one was taking their calls because of Michigan’s volatile incentive program. The upshot is that we just lost what could have been an incredible economic powerhouse in Traverse City. I called Senator Walker’s office and talked to one of his staffer, and (the staffer said), “Oh yeah! We talked with IEE on how to change the incentive program.” (Dan) “Maybe you haven’t heard but IEE closed their doors.” (Staffer) “No, really?”

After Office Hours 1935

So, if we have this dialog you guys (legislators) can be more up to speed… we just need to be in tighter contact I think. You’ve got to be patient with me, I am just understanding how this all works myself.

Representative Ray Franz As are we, obviously we’re from different backgrounds and to bring those two together into a working model is going to take a little bit of work. Obviously we haven’t written off the movie industry entirely, we’re still looking at a significant investment throughout the state. It’s not nearly as grand as the original plan which was pretty overzealous for what Michigan could afford. Between the brownfield credits and the movie credits we were looking at a long term indebtedness of about 5 billion dollars. That’s not sustainable. We couldn’t go there. But a more realistic, a more targeted opportunity that has some guideposts… we didn’t write it off entirely, we wanted to keep some of that in place with a little better oversight. If you’ve got a project, if you’ve got a scenario, a plan that is worthy of support, I’d be glad to take it to Lansing to the appropriations people and present it.

Michigan Movie Makers The main thing is we’ll stay in touch… (Michigan Movie Makers) is gathering to do this assessment in a couple of weeks, we’ll send you an email to let you know how that went.

Representative Ray Franz Anytime you got something keep me informed, keep me up to speed, it’s the only way I get to learn it too.

Jennifer Smeltzer Have you been to the Michigan Film Office page?

Michigan Movie Makers Yeah, there also the Michigan Economic Development Corporation, there’s been some criticism of them, they don’t really have the film industry on their radar as well as they could. One of the other concerns that I’ve heard is if the incentive program doesn’t show some serious return for Michigan, then it will just be slashed. With the tourism program Pure Michigan there’s all sorts of benchmarks and measures they have in place to see if it’s working, we need to put those in place for the film incentive so we can have the same kind of clear understanding of whether that’s working.

Representative Ray Franz That’s a great suggestion.

Michigan Movie Makers How are we going to know if any of this is any good unless we have some ways to measure it?

Jennifer Smeltzer Governor Snyder is all about dashboards, metrics and measuring, that would probably speak well to the administration if you could come up with some way to measure effectiveness and return to the state.

Michigan Movie Makers Movie makers are very good at administration. Coming out into this sort of a situation is not exactly my comfort zone, but realizing that I and others like me have to come out and “Hi, we exist, we are doing things and you can either get in our way or help us.”

Representative Ray Franz That’s entirely correct and we’re getting the same message from manufacturers, from tourism… Michigan did a lot of things poorly for probably more than a decade, fifteen years. It shows in where we were economically.

Michigan Movie Makers Now Ray… what do you prefer, Representative Franz?

Representative Ray Franz Ray is fine.

Michigan Movie Makers Here’s the thing, some people, like they say on Fox News, “some people say” that it’s actually the in-fighting between these two sides of government, the Democrats and Republicans, at least for my industry, that messed us up.  Ok, it’s Granholm’s program. Maybe she went overboard, it’s possible. But then the Republicans come in and say “This is outta there, boom!” Axe! What could have been moderately dealt with by Democrats and Republicans talking to each other, the (incentives) might not have gotten axed quite so badly… and we might have had a lot of industry people (still) looking at Michigan favorably. Now they’re like, “Michigan – those guys don’t know what they are doing. That state is completely out of control.”

The Shining, 1980

Representative Ray Franz Part of it is the demographics of politics of the change from one type of philosophy to another and I would agree with you, and Granholm, I think you would agree, may have exceeded expectations in her grandiose plan, her movie program was going to cost between 110-140 million dollars. That’s a lot of greenstamps that Michigan didn’t have. Did we overreact and go the other direction? Well, we didn’t cut it out entirely, even though there was some clamor for that. But we have scaled it back into the 25-50 range from 150. That seems pretty dramatic but maybe we get somewhere in the middle and that’s going to work.

Michigan Movie Makers It actually doesn’t matter how much we spend on it as long as we make money, right?

Representative Ray Franz Exactly.

Michigan Movie Makers So what we really need to figure out is what are the metrics? To know that it is working.

Representative Ray Franz Yes.

Michigan Movie Makers I can spend $10 if I make $20. I can spend $100 if I make $1000. It all depends upon what the payback is.

Representative Ray Franz Yes.

Michigan Movie Makers I don’t care about Democrats or Republicans, I care about who has something to offer that’s viable… I’ll vote for YOU if I know you’re going to kick some ass for ME, that’s how it works, right?

Representative Ray Franz Well, generally speaking that’s how most people are.

Michigan Movie Makers Of course, so… we don’t care about Democratic or Republican… philosophical issues. So the general message, and I am just spouting now so bear with me…

Representative Ray Franz That’s fine.

Michigan Movie Makers The two parties need to be talking more.

Representative Ray Franz On some issues I’d agree with you there’s that wall. Most people don’t realize probably 80% or better of the legislation that comes through, at least through the house where I sit, comes through in a unanimous or near unanimous vote. Most people aren’t aware of that. On many, many items we work together very closely. The education bill I introduced to change the kindergarten start date was bi-partisan on a wide margin, the farmers bill had 19 Democratic co-sponsors on it, I had three other bills that passed the house almost unanimously, so we do work together. When we get to some dramatic things that get a lot of exposure like the budget, then it gets down to the party line philosophies. “Do we spend more for these things OR these things? How do we measure and what are the ways we expect returns?” That does sometimes gets into the weeds of politics, without question. But even there we have space where we work together.

Rocky III, 1982

Michigan Movie Makers You know what else? People need to take responsibility for their government. You guys are supposed to be our representatives, you’re not… the gods of government. We need to talk to you. A lot of people just don’t get involved.

Representative Ray Franz That’s why I come home every weekend. I don’t live in Lansing, I live right here (Onekama). That’s why we have an office in town. As a state rep, I’m one of the very few that actually have a local office and maintain a space for people to come and express themselves, that’s what this is all about. I do this at my own expense. We’re here for you, anytime you want to stop by get a hold of Jennifer, make sure I’m here in the office not out running errands or something…

Michigan Movie Makers And if I can help you, just call me.

Representative Ray Franz Get with your group, get a work paper, some sort of program, some sort of suggestion, something viable and something concrete that I can take to Lansing. Let’s look at these, this might work, give me something we can actually sink our teeth into.

Michigan Movie Makers What about a document that says that these are the things are group is very focused on right now, is that helpful at all?

Representative Ray Franz Of course, we need to know what you need to operate and be a viable option in our budget process, what we can do. “This is what we need, this what we think it will help us do and this is what we anticipate as the return.”

Jennifer Smeltzer With some numbers…

Representative Ray Franz If we can present some scenario that shows return and not just wild speculation, something concrete that people can actually have some confidence in, we’d love to have it.

Michigan Movie Makers The conversation I had… with the (Director of Regional Operations) who worked for (IEE) the company that closed it’s doors… sounds like they were poised to bring some serious money into the state and we lost it. So the question also becomes, how much money did we loose by not taking a more moderate approach… what do we project to earn from this program and what will we loose if we don’t keep it going?

Representative Ray Franz I’d love that kind of information. If I can take that to the appropriations people and show them this, it all works. Love to be involved.

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Finally, I met with Howard Walker at the Omelette Shop by NMC in Traverse City a week later. Senator Walker was much more cagey than Representative Franz. He was uncomfortable with my recording, stating that if I didn’t record we could have a friendly conversation, but if I did he would mostly just listen. As I was there to ask questions, having us both just listening would not give me much write about – and you know how I do love to poke the keys. So no recordings.

Turn that iPhone off, citizen.

Gotta definitely cut the Senator some slack. I was wearing my mostly black backstage super hero costume, 5 days without a shave. My manner might have been a bit gruff – trying to take notes at light speed, ask the next coherent question while trying to supress my signature four letter flourishes. When the Senator wryly poked me about having to translate my freak genius dialect, I felt that (perhaps) we had established some rapport.

Meeting with Senator Howard Walker, Omelette Shoppe, Traverse City February 15, 11:10 AM

 
Senator Howard Walker

Michigan Movie Makers What role do you see film playing in Michigan’s economy?

Senator Howard Walker Not bubbling up very often. Efforts with film credits have not been very effective, (in either the Granholm or Snyder administrations). (Economic benefits) either haven’t happened or I haven’t seen the advances that have been made because of film credits.

Michigan Movie Makers The state has metrics for other programs, like the Pure Michigan campaign which is supposedly very effective. What about the Pure Michigan metrics?

Senator Howard Walker I’m not sure there are clear metrics for Pure Michigan. We can measure flights, occupancy – where they (visitors to Michigan) are coming from, I think they (MEDC) do pay attention to that. The MEDC does provide us with information on return of investment on Pure Michigan dollars, I think it’s 2-3 to 1.  Michigan gets back 2-3 dollars for every dollar we invest in Pure Michigan.

Michigan Movie Makers So you feel those metrics are reliable?

Senator Howard Walker I do, and there’s anecdotal information as well.  Hospitality businesses tell us that occupancy is up.

Michigan Movie Makers So for the film credits / incentive, could we put metrics in place?

Senator Howard Walker There could be metrics in place. (The film industry is) mercurial to legislators, we can’t be sure which film jobs are new to Michigan, what do the new jobs look like? The concern is that they are transient jobs, what are the part time and what are the full time jobs? There could be a construction or landscape contractor who was already here but now maybe 10%-15% of their work is coming from building movie sets, how do we know?

Michigan Movie Makers Would you support the establishment of metrics to measure the effectiveness of film incentives?

Senator Howard Walker Before you talk about metrics, you’ve got to talk about goals, what are your goals?

Michigan Movie Makers For the film incentives, to bring in more money than the state spends, like the Pure Michigan campaign for example.

How much money did THIS movie make Michigan?

Senator Howard Walker I support accountability for the money we spend, but it’s not my job to develop those metrics.

Michigan Movie Makers Isn’t there expertise you can draw on, a gear in Lansing that you can start turning? Don’t you have oversight over the people whose job it is to develop metrics? Won’t they jump if you say ‘jump’?

Senator Howard Walker We can ask for it and sometimes it happens and sometimes it doesn’t. There’s not just one gear to turn, there’s 1000s of gears that have to be turned. I represent my district, but this (metrics) would need not just me but many more districts’ support and their Representatives and Senators. You might ask the Senate Majority leader, Senator Randy Richardville, (district Monroe) to help build that strategy.

Modern Times, 1936

Michigan Movie Makers The visual effects and post-production company, IEE had established a Traverse City office, but that’s gone now. Here’s the short version – IEE had big projects lined up with major studios (like converting Fox’s entire library to 3D) but all the work evaporated, their clients stopped taking their calls. Michigan’s erratic behavior towards the film incentives scared the big players off. The Democrats put incentives in place, the Republicans slash them away, then decide to put them back. Having them back doesn’t matter, Michigan is now seen as unpredictable, capricious! Who want’s to gamble on what Michigan will do next?

Senator Howard Walker The moral of the story is don’t rely on government.

Michigan Movie Makers IEE did everything they were asked to, they invested, built resources here. Isn’t it important to establish a partnership between government and business?

Casablanca, 1942

Senator Howard Walker Yes

Michigan Movie Makers Would you be willing to work with us?

Senator Howard Walker I am, but with regards to what?

Michigan Movie Makers Let’s start with metrics for the film incentives – what they could be and how to get them in place.

Senator Howard Walker Yes

Michigan Movie Makers So you’d be down with helping to craft a policy?

Senator Howard Walker (deadpan) ‘Down with’… does that means agreeable to?

Michigan Movie Makers  (flummoxed) uh… yes, ‘down with’ means agreeable to. Would your staff help us stay informed about any developments in the legislature regarding the film industry?

Senator Howard Walker Yes. Call my office, tell them we talked and tell them what issues you want to be kept informed about.

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Blast from the Past

Michigan Governor Proposes Slashing Film Tax Credits (2011)

The Ten Commandments 1956

Epliogue

Film credits more profitable than Pure Michigan (2/2013)

Film Industry Reels at Governor Snyder’s Michigan Budget Proposal (2/2013)