Georgia’s Gone Hollywood

April 2, 2013 13:00 pm

by Charlie · 7 comments

Today’s Courier Herald Column:

The movie industry has returned to Georgia, and the industry continues to grow.  Last week, Fayette County Commissioners gave zoning approval to 288 acres of land that will soon see a movie studio rise from the rolling farmland.  The owner, Pinewood Studios, is the organization behind the Harry Potter and James Bond films among many others.  In short, it’s a big deal.

Georgia is not a stranger to the entertainment industry.  As a kid I grew up just a couple of miles from the proposed studio in an era that saw Georgia give the world the Smokey and the Bandit movies.  Fried Green Tomatoes was filmed in the area while I was in High School.  Midnight in the Garden of Good and Evil provided a nice lift to Savannah’s tourism industry on the other end of the state.

More recently, Alcon Entertainment rented my home church in North Fayette County for 6 weeks to be the main set for the film The Joyful Noise.  It is difficult to describe how surreal it is to see Dolly Parton and Queen Latifah singing in a choir loft where you performed in Christmas pageants as a kid, other actors talking in the yard of my Aunt Mae’s old house, or the funeral for Kris Kristofferson’s character a few headstones over from that of my father.

Because the production company used local actors, the memories I have of those in the place where I grew up were juxtaposed against these actors, as many from the church’s congregation were used as extras.  Thus, along with the stars mentioned above I got to see Bill and Linda Beckwith, Brenda Torbush, Sylvia Higgenbotham, and even a quick glimpse of my Mom during various scenes.   Even then, it was easy to note that many of them weren’t sitting in their normal pew.  So much for reality based movies.

The movie provided a good shot in the arm to a country church that is finding it tough to meet its budget in this economy, as well as a boost to many local businesses.  That is the point of growing this business in Georgia.

While the state has seen its share of film production over the years, tax breaks given to companies that produce here combined with Georgia’s right to work & low regulatory business environment have begun to pay off in a large way.  Riverwood studios (now Raleigh Studios) is located in Senoia Georgia just a few miles to the southeast of Pinewood’s location and produces The Walking Dead series.  Tyler Perry’s studios are just a few miles to the north in Southwest Atlanta.

Critics of the tax breaks argue that the incentives given to draw temporary filming do not provide a long term return on investment, claiming that the production companies pack up and leave town as each film wraps.  They argue that the production follows the incentives, and the industry provides too much flexibility to create a sustainable employment base.

The investments by the three studios listed above plus other smaller projects indicate otherwise.  Georgia’s development as an entertainment production center is one of its best economic success stories of the last decade.  It’s not about the temporary jobs that are created as production temporarily visits the area.  It’s about attracting the base of talent and the infrastructure required to support more permanent portions of the productions.

It’s also a lesson in tax policy.  The tax wasn’t used as a short term gimmick.  While some have argued it needs to be ended, it is a long term program that has allowed those in an industry with long term planning horizons for relatively short term projects to have stability in their projections.  That stability has generated companies who have tried Georgia and liked it.  We have developed a reputation, and it is a good one.

A reputation is much harder to earn than it is to lose.  Georgia has earned this reputation by keeping a stable, low cost, and low tax business environment.  Specific winners and losers in this scenario are still left to the open market.  Georgia just provides an open competitive environment for those who would come here to take advantage of it.

Georgia built it.  And the studios are coming here.  Just like from that movie.

drjay April 2, 2013 at 1:57 pm

if i recall correctly, meddin studios in sav’h is set to expand, and supposedly another studio is going up in the next county over–but it still seems sketchy to me at this point….

Lawton Sack (GATA Eagles!) April 2, 2013 at 2:27 pm

It is a $90 million movie studio “park” that is going in Effingham County. It is expected to produce 1000-1200 jobs. It will include a video game production facility, movie studios, hotels, botanical gardens and more.

A rendering of the “park” can be seen here, along with some other details: http://www.bryancountynews.net/section/49/article/25984/

drjay April 2, 2013 at 3:13 pm

i’m basically familiar with the details, which is part of why it seems sketchy–it is a little unclear just where mr kumaran’s financing is coming from–most of his film credits up to now are either bollywood or straight to video stuff–he plans to put a concert arena in effingham on the site? mcuh like the daimler plant that was never built on the mega site, i am cautiously optimistic at best on this projects prospects…

sockpuppet April 2, 2013 at 4:02 pm

“tax breaks given to companies that produce here combined with Georgia’s right to work & low regulatory business environment have begun to pay off in a large way”

One thing that the writer is leaving out: the talent to make these projects work. You not only need the actual moviemaking talent (i.e. actors, screenwriters, directors) but people behind the scenes to get these projects financed and distributed. That is something that Georgia has that other states that have these incentives (Michigan for example) do not. Without the people to make it work, all the tax credits and right to work laws in the world won’t do anything more than perhaps attracting poorly conceived and developed projects to your state that will only serve as writeoffs for the company that made them (again, which is usually the case for films made in Michigan).

The reasons why there is talent in Atlanta to actually sustain a profitable movie industry should be considered. Part of it is clearly due to the Turner Networks having been here for decades. Also, the music scene that began to grow in Atlanta in the 1990s, a lot of those guys began to branch out into films also, and because a lot of the music companies are part of conglomerates that have film divisions also, that brought a lot of connections and knowledge into Atlanta that would not have come here otherwise.

Also, a lot of the guys who built a lot of the movie industry aren’t originally from here. For example, Tyler Perry is from New Orleans and the guys from Rainforest Films aren’t from Georgia either. Even among the homegrown talent, consider the good special effects companies, including Giant Studios, the guys who did a lot of the special effects for the “Lord of The Rings” movies, that are here because Georgia Tech, the Art Institute of Atlanta, and a major hub of the Savannah College of Art and Design are here. Places like that draw a lot of entertainment work to Atlanta even when the films aren’t shot here and/or the studios aren’t located here. (Unfortunately Giant Studios took the main portion of their film special effects business to Los Angeles, but they still have their corporate headquarters here – for tax purposes – as well as keeping a lot of their R&D here, again because of all the tech talent.)

We have to look at what attracts and keeps creative risk takers like that, and it often isn’t tax credits or right to work laws, which usually are favored by more established, risk-averse business types and not creative entrepreneurs. The talent is why this movie making scene is here, and not in, say, Tennessee with their much ballyhooed lack of a state income tax. No one is going to start their film company or video game company in Chattanooga, Nashville or Memphis to take advantage of the better tax climate because the talent to make such a viable company get off the ground is totally absent. And even the large music and publishing scene in Tennessee (mostly Nashville) when combined with the tax climate hasn’t helped Nashville become Hollywood South.

It is something that really does have to be considered.

gchidi April 2, 2013 at 6:05 pm

Sockpuppet is right on. The talent and the capital are self-reinforcing. It’s classical economic clustering, and properly encouraged can eventually grow from its own momentum.

I think often about the crazy story of the Hayes modem — the ping noise and static-sounding device anyone over the age of 30 remembers as the early way to get on the Internet. Hayes came out of Georgia Tech, and the device was developed in Norcross. So much of the growth of the Internet depended on the open standards and development of that modem. I wonder often what would have happened if Hayes had had access to the entrepreneurial genius of a Bill Gates or a Steve Jobs or the Packard clan — and what would have become of Atlanta as a result.

Instead, last I heard, Hayes had lost his fortune and was tending a bar near campus.

You can say the same thing about the massive former Lucent facility at the corner of Jimmy Carter Boulevard and I-85, or what has become of Scientific Atlanta. Do you know that one of the largest pager makers in America was based in Gwinnett at one point? All gone, because they couldn’t innovate.

And they couldn’t innovate because they didn’t have access to the human capital necessary to do so.

It’s not just tax policy; that is a necessary yet insufficient condition. Clusters form because the people working in the industry need to believe if they lose their job, they’ll find another nearby without having to move. Industry sees that and locates close to talent. And capital sees the industry cluster and knows that it can learn how to discern a good investment from a bad by watching the local economic environment and listening to the cocktail-party chatter. It snowballs from there.

So taxes are part of it, but so is a local employment situation that isn’t punishing to the people in the business. Atlanta has a relatively low cost of living, which helps, but the way at-will employment and contract enforcement works in this state is a net disadvantage. The state of the local school systems makes it much harder to attract talent, as do the lingering remnants of racial stupidity and religious intolerance.

And transportation remains a nightmare, which makes the development of true clusters much more difficult. The creatives who might want to work on a lot in Fayette County sure aren’t going to want to live there — not while the county is perceived as culturally dominated by the social mores of religious conservatives, and certainly not while all the nightlife is still downtown. The commute is 45 minutes from midtown in good traffic, one way, 60 to 90 in typically terrible traffic. It’s not an accident that Hollywood has major studios right in the middle of town. It’s on purpose, the result of a deal between producers and the unions to create a thirty-mile zone designated for local production. (You’ve heard the term before — TMZ is Thirty Mile Zone.)

Atlanta has several economic clusters going right now, all of which can be rendered vulnerable to disruption if the needs of the creative class aren’t heeded. There’s a bunch of medical software stuff here, along with payment processing, logistics (particularly auto parts distribution), heavy construction services, medical devices, some relatively obscure financial services stuff, chemical products, building fixtures, aerospace, motor driven products and textiles.

I would be skeptical about targeting tax breaks outside of these industries.

saltycracker April 2, 2013 at 6:59 pm

The tax breaks given to attract business are, generally, not across the board but very politically selective. We recently posted a multi-million dollar annual tax break for a video game company, written by the company’s lobbyist and attached to a bill by the local Fla. (R) legislator.

We also see BOC’s waiving property taxes for large shopping centers (coming anyway due to demographics but utilizing jurisdiction shopping). Even as a frequent critic of the overfunded, inefficient educational system it raises an eyebrow to see millions taken out of BOE hands for a retail center or specific property tax cut. When the employees send their kids to school, taxes will be raised on everyone or services will be cut.

There has to be a better tax abatement method to spread across an industry or population that improves s community lifestyle & attracts more business. But that might diminish the elected & other specific business beneficiaries.

DavidTC April 8, 2013 at 12:22 pm

Also, by merely having film studios in the area, we will see a lot more local productions, even by studies that do not own one of the local studios.

Why? Because they know they can find talent and, just as important, crew and equipment. And a soundstage to rent for two weeks if they need it. Instead of having to fly in their own people and build things and all sorts of nonsense. Instead, they just fly out the main actors, call the local union and say ‘Hey, we need a camera guy.’ (and all the other people they need), and, presto, six days of George Clooney or whoever driving around Georgia getting filmed before going back to Hollywood.

Added bonus: We’ll see more films _set_ in Georgia, which can’t help but promote the state.

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