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Eco Development staff pitches city incentive plan for film producers

Tuesday, April 22, 2014 by Michael Kanin

City of Austin Economic Development staff briefed City Council members Thursday on a proposed new set of incentives aimed at creative industries such as film, television and computer gaming. The package, set for a vote May 1, would offer production companies as much as a 0.75 percent rebate for salaries paid to local production staff.


Deputy Economic Development Director Rodney Gonzales saidthat would cost the city $75,000 on a typical, $10 million production budget. However, Gonzales and Global Business Recruitment and Development Coordinator Natalie Betts said the proposal would leave the city somewhat below the incentive threshold offered by neighboring states Louisiana and New Mexico.


“It’s difficult to provide an exact comparison because our incentive is based only on local wages, whereas those other incentives, including the (State of) Texas incentives, are based on spending in the state which includes purchases as well as wages,” Betts added. “It’s difficult to give an exact comparison, but we would still be below.”


However, Betts noted that she and her colleagues “have heard that a level playing field would tilt toward Austin.”


In addition to those arguments, staff noted that any incentive dollars would come from revenue generated by creative projects. They added that the project would be net cash positive for the city.


Mayor Lee Leffingwell noted that the incentives would still represent an important offering. “It’s nice to say that Austin itself is an attractive place for the actors, the producers, and the directors to want to be but the fact is these films are funded by people other than those,” Leffingwell said.


He said that film offices in Louisiana and New Mexico are state-funded programs which offer tax credits to film producers, and that the State of Texas had dropped the ball in that regard.


Indeed, the City of Austin has extended its own creative industry incentives in the past. One notable example is what would have been a $40,000-per-season offering to the television series Friday Night Lights, which turned a bit sour after producers failed to appropriately credit the city for its role in assisting the series. That spat led to a suspension of the initial incentives for the program, though city officials and producers eventually agreed on a subsequent version of the deal.


Council Member Chris Riley took a turn raising a question that has started to punctuate any discussion of economic incentives before Council: Whether the City of Austin should extend economic bonuses to businesses that might otherwise be here regardless of such a program.


Staff batted down that argument. “We’ve got some examples…of where we were in a competitive situation and the production went elsewhere,” argued Gonzales.


“This is such a highly mobile industry, it’s very easy for companies to pick up and leave…if the incentives aren’t there,” argued Betts.


Meanwhile, Council Member Kathie Tovo seemed encouraged by the approach offered by staff. She used the occasion to hint at a resolution she and Council Member Mike Martinez plan to bring forward that could recast the city’s many large-scale special events as “economic development targets.”



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