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Darling No More: Hollywood Flees Louisiana for Sweeter Taxes

  • Associated Press

In this June 1, 2016 photo, a worker for MBS Equipment Co., a grip and lighting company, moves equipment in their warehouse at Second line Stages, in New Orleans. Louisiana’s once-booming film industry, branded as “Hollywood South”, has gone from darling to Hollywood castoff.

In this June 1, 2016 photo, a worker for MBS Equipment Co., a grip and lighting company, moves equipment in their warehouse at Second line Stages, in New Orleans. Louisiana’s once-booming film industry, branded as “Hollywood South”, has gone from darling to Hollywood castoff.

It's the middle of a recent work day inside a Hollywood-style movie studio in downtown New Orleans, and Trey Burvant turns off the lights on an empty Stage 1. He heads over to stages 2 and 3, and they're empty, too.

"Not much going on,'' Burvant says inside Second Line Stages studio. "Nothing going on.''

He's a Louisiana-raised actor and producer who came back from the East Coast when the movie industry started to take off a decade ago in his home state, thanks to generous tax breaks for movie makers.

But now the slick $32 million state-of-the-art studio Burvant runs, with its air conditioning turned off, its stages dark and its empty parking lot, is a forlorn window into the volatile business of America's race to attract movie makers with tax breaks.

Louisiana's once-booming film industry, dubbed "Hollywood South'', was off by as much as 90 percent this past year, according to the Louisiana Film Entertainment Association. The drop is all attributed to the state's decision to wind down its generous incentives last July, scaring off movie makers.

Show biz in the state was booming as late as last year, thanks to a generous incentive program that offered productions tax credits equal to 30 percent of their costs.

Between 2008 and mid-2015, more than 1,100 productions were filmed in the state, among them box office and Oscar-winning hits like "12 Years A Slave'' and "Django Unchained.''

The tax incentive program had become so successful that Louisiana's budding film industry even outpaced California's in the number of major studio productions, 18 to 15, in 2013, according to FilmL.A. Inc., a Los Angeles nonprofit.

On the flip side, success did not come cheaply: Louisiana also dished out about $1.4 billion in tax credits in the past eight years.

"We were the dog that caught the Cadillac,'' said Jan Moller, the director of the Louisiana Budget Project, a nonpartisan group that monitors state spending. "It was unaffordable.''

And catastrophic budget news, a drop in oil prices that contributed to a state budget shortfall of $1.6 billion last year, put an end to the largesse. Louisiana's politicians decided that halting tax breaks to Hollywood actors and film crews was better than firing teachers and closing hospitals. So they capped tax credit payments at $180 million a year.

And just like that, film crews went elsewhere: To Georgia, Kentucky and Canada, among other hot spots.

"The producers just run the numbers. If it pays off, then they're in Louisiana or they're in Vancouver. It's purely a bottom-line kind of thing to Hollywood,'' said Jonathan Kuntz, a film historian at UCLA.

Hollywood has a history of going wherever it's cheapest to make a movie.

In the early 20th century Los Angeles was an escape from the hefty costs of New York City and its unions, high prices and bad weather. Then there was a wave of movie making in Europe and elsewhere around the world after World War II.

Since the early 2000s, Hollywood has been lured by tax breaks from one place to another, from New Mexico to Michigan to Louisiana. At least 36 states now offer some kind of tax incentive, but that number is down from a few years ago, according to Entertainment Partners, a financial services company for the entertainment industry.

Other states besides Louisiana have put the brakes on.

Last year, Michigan and Alaska chose to end the tax breaks because they were deemed too expensive. North Carolina has put a $30 million cap on how much it spends a year. Programs in New Jersey, Arizona and Iowa have also ended recently, according to Entertainment Partners. Florida's program ends in July.

Louisiana's film industry is hopeful still. The $180 million cap is still very generous, and could be lifted in 2018; also, a backlog of credits owed by the state, which has held up new productions, may be cleared sooner than first feared.

But for now, movie makers have been leaving Louisiana.

Will Greenfield, a 38-year-old line producer, is part of the shedding of camera assistants, grips, electricians, actors and producers moving from Louisiana to Georgia and elsewhere, chasing work wherever it's popping up.

"Had the incentives not changed, we would not have left,'' Greenfield said in a telephone interview as he stood in a sound stage in Atlanta.

He and his wife sold their home in New Orleans in January and moved to Atlanta after a decade of film work in Louisiana.

Shortly after they moved to Atlanta, he said four industry friends were staying at their house, all of them from Louisiana and looking for work.

"And they found work right away,'' he said. "It's an exodus.''

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