Home Depot To Open Store Inside New Pinewood Studio

April 3, 2014 11:05 am

by Buzz Brockway · 15 comments

Proponents of Georgia’s film tax credit like to talk about how producing a movie here in Georgia benefits the local economy. Here is a concrete example that supports their thesis:

Home Depot is opening a new store in south metro Atlanta next month, but the public won’t be allowed to shop there.

The Atlanta home improvement chain has built a 45,000-square-foot store dedicated solely to Pinewood Studios, the British filmmaker behind James Bond and the Harry Potter series, and its associates.

“It’s a new venture for us,” said J.T. Rieves, vice president of pro business for the retailer. “What they (Pinewood Studios) are trying to do is to create a level of control of predictability for someone who wants to make a movie.”
Pinewood is building a movie studio, its first in the United States, on more than 220 acres in Fayette County. The dedicated Home Depot store will open April 3.

I got a tour of Pinewood Atlanta last summer when it was not much more than dirt. They mentioned to us at the time the Home Depot store as well as how they will be employing seamstresses, construction crews, post-production experts, etc… They are also building houses at Pinewood where scenes can be filmed and actors will stay when working at the facility. The impact on the local economy will be positive.

I believe there are seven studios either being expanded (i.e. Tyler Perry) or being built (i.e. Pinewood Atlanta) so the movie industry ain’t going away. Hopefully we’ll see even more things like this dedicated Home Depot to employee more Georgians and benefit our economy for the long term.

A. Neil LeCage April 3, 2014 at 12:42 pm

Here’s a link to the tax credits that Rep. Brockway refers to: http://www.georgia.org/industries/entertainment/production-incentives/ The tax credits are often spoke about in general terms, but the link provides some more details about what is being offered and to whom.

NoTeabagging April 3, 2014 at 12:42 pm

Pinewood Studios is committed to producing local jobs, especially those in the Fayetteville/Peachtree City area. An education initiative created a film certificate program, partnered with Clayton State University, to give a quick overview to aspiring film crew employees. The education program is short and allows students to learn the ins/outs of working on set and gain knowledge in a variety of crafts in the field. Students may pursue more advanced studies in chosen fields as the program expands.
http://www.clayton.edu/conted/Digital-Film

A. Neil LeCage April 3, 2014 at 12:54 pm

It is so awesome when different organizations (public and private) can work together like this.

greencracker April 3, 2014 at 3:13 pm

So if the movie industry “ain’t going away,” time to sunset the tax credit, amirite? Simplify the tax code, amirite?

NoTeabagging April 3, 2014 at 5:32 pm

No, Greencracker. States are very competitive for movie business. Georgia film makers saw the writing on the wall with Louisiana and other states. They proved it to the legislators and got the tax incentive passed. Unlike other states, Georgia only gives the tax credit once the film/TV project spends money in Georgia. It is not a handout. The more spent on Georgia businesses, products and labor, the more return to the producers. The Film and TV business creates large numbers of jobs, and supports many independent, local businesses in the geographic areas of production. It has been a boon to tourism and state promotion which is encouraging to attract business and job growth in other sectors.

greencracker April 4, 2014 at 9:01 am

I thought that would be the answer. But I hadda ask.

saltycracker April 4, 2014 at 7:12 am

By transferable tax credit, does that mean if a film company doesn’t need the tax credit in Georgia they can sell some or all if it to someone that does ?

Disclosure: I’m all for reducing Georgia taxes but not so much when it is below zero.

greencracker April 4, 2014 at 8:58 am

They can sell the tax credit.

saltycracker April 4, 2014 at 9:29 am

Be interesting to see the list of Georgia tax buyers of this credit.
I believe I read the top broker in the U.S. for these state credits lives in Atlanta. Wasn’t exactly clear on Georgia’s law.

We have visited this on PP before and it was not libs voicing concerns of a tricky path but business publications. The film companies known for creative accounting insist on this transferable provision, enough to make it a deal breaker. Some states consider it tax fraud while others don’t. The devil is in the details.

NoTeabagging April 4, 2014 at 3:14 pm

Some production companies get investors to “buy” the tax credit as a way of getting front money to pay for the production costs. The “Investor” must wait until the production completes and the audit creates the tax credit/refund. This investor usually gets a small return on their investment. For example, they may invest $81K and get back a $92K tax credit. Not cash. It still remains a tax credit. The investor can apply this $100k to their own tax bill and save money. As you may guess, it is rich individuals who have maxed out the usual loopholes and need more line items to avoid paying high taxes. (read about the mechanics of these deals here: http://articles.latimes.com/2013/dec/26/entertainment/la-et-ct-hollywood-financiers-20131226/3) and please correct any errors I made in my summary above.

Here is an oft quoted result of the film industry: “The economic impact of the more than 330 feature films, TV movies and shows, commercials, and music videos filmed from Hiawassee to Savannah in 2012 totaled more than $3.1 billion, according to the Georgia Film, Music and Digital Entertainment Office — up almost 30 percent from 2011. The industry provides an estimated 25,000 jobs — 11,000 of which are full-time”. Not sure how much is generated in tax credits of the $1.3B. One local broker sold $15M in credits last year and expect to double that this year. Make no mistake, there are still plenty of sales taxes and employment taxes generated by film business in Georgia that stay in Georgia.

The state website has all the info and forms here, as quoted by Neil Cage in an earlier post: http://www.georgia.org/industries/entertainment/production-incentives/

saltycracker April 4, 2014 at 4:13 pm

If production incentives were $1.3B and generated the 30% tax credits we’d have about $400M spread over 25,000 full and part time folks or $16,000 each…..that can’t be so I missed something…

greencracker April 4, 2014 at 5:16 pm

I’d be interested to know how “economic impact” is calculated. Literally, what’s the formula? Cause there’s lots of ways to decide what is and isn’t “impact.”

I mean, no doubt it’s a huge industry here, lots of jobs. I’ve got a buddy (no college degree/debt, even) making enough money as a cameraman to support his elaborate lifestyle. And he is using the heck out of services like mani/pedi, dog baby-sitters & fancy restaurants & etc.

But I also know about any kind of state tax incentive for one industry or another is a form of playing winners & losers and that it sets states on a race to the bottom.

But OTOH, at least film is something cool; at least we’re not trying to be number one at medical waste incinerators.

NoTeabagging April 4, 2014 at 7:10 pm

That is THE important question, what is the “economic impact”? It’s not like the state is giving away millions to a single industry, like an auto manufacturer, just to create 1500 jobs, is it? Oops, did that happen in Georgia?

The film industry impact puts millions of dollars directly into everyday retail business, service industries, restaurants, catering, commercial space rents, hotel and apartment rents, vehicles, etc. etc. Not to mention the Georgia based film/tv related businesses that supply equipment and supplies to these productions. Some of the equipment rentals and expenses are not qualified for the tax incentive. That was a recent legislative change that the industry was willing to live with.

As you also pointed out , those in the upper tier of the business make enough money to spend on local services and luxuries. Just my opinion, but I think there are far more winners than losers by staying competitive for film/TV production business. Not everyone has to work in ‘show biz’ to reap some economic benefit. The productions will get done in the best economic environment. Might as well be in Georgia.

saltycracker April 5, 2014 at 9:42 am

So many good causes in Georgia to participate in, thank goodness we have good credit and deep pockets.

saltycracker April 6, 2014 at 1:39 pm

“what is the “economic impact? ”
It is very questionable when the incentive exceeds taxes due.

Tax codes and deductions are difficult to sort out for most legislators with all the complexities, limited time, definitions, hidden agendas/unintended consequences and other nuances. Most can’t get by deficit, debt reduction….Even our U.S. Senator Isakson termed a rebate as a tax deduction in the First Time Home Buyer program.

Perhaps when we consider incentive for corporations or individuals a critical threshold is when the incentive zeros out income and/or property taxes. Income and property taxes due/paid are generally easier to work with when it comes to incentives than considering impact from sales taxes, fees, imbedded taxes and such. Then we start throwing in potential impacts from “forecasts”.

Beyond that some very clear, new level in the process needs to kick in to determine its public value. Particularly so when we introduce the idea of selling a portion we don’t want/need to use is.

Not saying we shouldn’t do it, we just need to understand when in the bidding war with other states someone has to have an understanding when we have hit the level of final offer – sans a better understanding, I’d think when the incentive wipes out taxes due.

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