MPN: Can you tell me when and why the film office was created?
Begnoche: It was created in 1979 and its role was always to assist and attract film companies and production companies and kind of help promote the growth of Michigan film industry. Up until 2008, the office was a “film office of one” so for many, many, many years there was one person who was in charge of the film office and kind of did it all. If you look on the film office website, you can find a list of many of the projects that have shot in Michigan in the past. We’ve always had a lot of projects. We have a very strong indigenous film community; there have always been those who want movies made here and through the years we’ve had some major films which have been shot here, for example, Point Blank was shot here along with Beverly Hills Cop. So, we’ve always had some movies shooting in Michigan for at least certain parts of them and the film office has been around for a long time trying to encourage new or other projects to film here. Obviously in 2008, when the film incentive passed, our volume increased significantly, so now we have six people. We have a director, two people on staff who handle locations, a specialist who deals with projects while they are applying, and myself who does communications for the office.
MPN: Can you tell me other than some of the more notable films are there any other past accomplishments of the film office that stand out?
Begnoche: The film office used to be a part of History, Arts, and Libraries so it was always kind of part of the arts in Michigan. It is now a part of the Michigan Economic Development Corporation, so the focus has shifted a little bit.
MPN: So it wasn’t always a part of the Michigan Economic Development Corporation?
Begnoche: No, it was under Arts and Libraries for a long time. That office was basically disbanded some time under Governor Granholm, and after that it was its own entity for about a year before it joined the Economic Development Corporation under Governor Snyder’s administration.
MPN: Now what has that shift done to the goal or the work around the office?
Begnoche: Well the day-to-day work really hasn’t changed, and the goal really hasn’t changed either. The only change was really in who we are reporting to, as far as the way the office runs we find the data for the jobs the film projects create and we feed that data into the EDC and that data gets combined with all the economic development initiatives they are working on and that combined data is feed into the state dashboard.
MPN: The Michigan Economic Development Corporation is quite big isn’t it?
Begnoche: Yes there is the travel, the film office, the Better Michigan Campaign, a lot of the talent development programs and projects in Detroit, workforce development is now also a part of the MEDC, and a lot of our business attraction through the state is now run through the MEDC. So the MDEC has many parts to it and the film is one of those.
MPN: You brought up the tax credit which is obviously a big deal for the film office. Can you explain what it is?
Begnoche: In 2008, the legislature passed a tax credit law which went up to 42% and it was the most aggressive film incentive law in the country. We went from the year before when we had a baby incentive which financed three projects who spent about $2 million in Michigan to 2008, the first year it was in effect, when we had 38 projects and about $125 million spent in Michigan, to 2010, when we had around $293 million spent in Michigan. So it grew really fast. The incentives we awarded last year for the projects shooting in Michigan were about $115 million. So at the beginning of 2011, the new administration revamped how they deal with the incentive process. All of the different film incentives the MDEC had in their ability to use went from being a tax credit to being a budget or allocation-based. Starting in the physical year 2012 to October 1st of this year our program went from being a tax credit to us being allocated money out of the general budget, so this year we were allocated $25 million for incentives for new projects, so now every year we are awarded money through that budget process, as opposed to the tax credit, which didn’t have any sort of cap in place.
MPN: So what was the tax credit, before 2008?
Begnoche: Before the new direction in 2008 we had a small allocation in 2007, but we didn’t have any incentive prior to that.
MPN: Some of the information on the new incentive program said that the Michigan taxpayers gave the films more money than the films managed to gross at the box office. Do you know if that’s true or not?
Begnoche: Yeah, that’s very likely in some cases. The goal of the incentive is not to incentivize the movies that will make the most money; the goal of the film incentive is to incent those movies who will spend the most money in Michigan. So we are not looking at whether or not they get their money back. We are looking at how much are they going to spend on Michigan workers making that movie and how much are they going to spend in Michigan hotels and in the local areas while making that movie. That is really how they get that benefit and how we look to give them money by looking at the making of the film, not the ultimate box office success of the film.
MPN: How would you compare one movie to another in how much they are going to spend in Michigan?
Begnoche: We have an extremely rigorous application process. When you apply, you have to give us a budget and you have to break down how much you are going to spend. Now of course these are all estimates and we recognize that it is hard to find exact numbers, but they have to say they are going to hire this many Michigan workers and all of the crew positions the film is going to use Michigan workers to fill, we are expecting them to pay Michigan workers this much money, pay non Michigan workers this much money, spend this much money on hotel rooms, spend this much money on catering. We have that break down on the front end so that we can figure out how much of that money is actually staying in Michigan. We also require them to have financing in place so projects need to have at least 80% of their financing in place and they have to prove that to us...we want to make sure they have the money on hand so that they can pay their bills, basically.
MPN: Now is that hard for films to do? Do a lot of projects have that already or no?
Begnoche: Certainly they would prefer not to…what it does for us is it makes sure we are getting the projects that are serious, they are ready to go, they are ready to spend money. This process kind of weeds out the ones that are still in the process or kind of sketchy. We also stipulate that the financing they claim to have is not dependent on our funds, they have to have this money regardless. It can’t be like they need this money from the film incentive in order to be able to start filming.
MPN: Now do you weigh different areas? I’m sure different films will want to shoot in different areas. Does that have any effect on your decisions?
Begnoche: The review process goes like this: you’ve got a review committee here at the MEDC who is made up of the film commissioner, senior vice president of policy, senior vice president of communications and marketing, and our senior vice president of economic development. They look at each application that comes in and there are five criteria we are looking at. First is whether or not the production is financially viable--that’s where the financing comes in. If they are not finically viable, that is as far as they go. Two, are they going to utilize Michigan’s infrastructure? Are they using the people we have, are they using the film lots we have and other things. Three, how many Michigan workers are they hiring and at what wage level? A project planning to hire 90% of their crew from Michigan is probably going to weigh higher than a project bringing 70% of their people form out of state. Fourth, is this a project we can use to help promote the state? Will it help promote tourism? A lot of the projects we approved in 2011 through the incentive system were either set in Michigan or they have some sort of ties to Michigan, so we can use those things that aren’t necessarily film-related to help tell the story about Michigan. The fifth is the magnitude of their spending in Michigan. So, are they doing the whole project in Michigan or are they doing two weeks here and ten weeks someplace else, just to gage our return on investment and again to see if we give them the incentive how much of that money is going to stay here in Michigan.
MPN: Now the people that are hired to work with the films, do they keep working in the film industry or do they go back to do other jobs?
Begnoche: It depends; most of the crew try to make this a full time job. When you do work in the movie industry the hours tend to be long so it’s not like you can do this as a side job. If you are going to be on a crew, it’s your main job. So what we have really tried to do is build our crew base up. So when you have projects like “Oz the Great and Powerful,” which is being filmed in Pontiac, they bring in a lot of their crew from LA, because that is a top tier production, its Disney and it’s a $100 million plus budget production. The Michigan crew on that set is trained up by some of the best in the business. Once our crew gets trained up to that level, it makes Michigan that much more desirable for projects to come, because they are hiring Michigan people that they believe have the skills to get the job done and to do it well.
MPN: How do you train the crews? Is it through the experience or are there ways Michigan can make its crew members better than other states?
Begnoche: There are a lot of different film programs and training programs in the state. Our office has guidelines on if you are looking to go back to school and are looking to get into the program, these are some of the criteria films look at to get into the industry and here are some schools which can provide you that education and training for being a member of the crew. The other main thing is just getting on set. One of the great things about Michigan is if you are working in Michigan you are kind of a big fish in a small pond. It is a lot easier to work your way up much more quickly in Michigan than if you went out to LA where there are many, many, many people going out for the same job as you. We have heard time and time again people who got out of college and got there first job on set and just worked their way up moving from assistant to a position of greater importance on set.
MPN: What do you see for the future of the film office?
Begnoche: The film office has been here for a long time and it will continue to be here. We have got $25 million for the physical year 2012, so we are going to continue to work to bring projects to Michigan and the best projects we can to Michigan. Also, we are going to work to support that home grown industry we have here. We have some really talented people that are making movies without the incentive, we are kind of in that dual role of brining in those top level projects that will help train up our workers and giving us that national exposure while also really trying to grow and support that home grown industry.