Newark's Film Hopes Snag on State Budget Fight

NEWARK, New Jersey (Reuters) – Newark, New Jersey is auditioning to be Hollywood's next great backdrop -- a cheaper alternative to nearby New York with the architectural diversity to allow it to play almost any urban role.

Since the start of the year, the brand new Ironbound Film and Television Studios opened its doors and the city now has an Office of Film and Television. In January, Newark Mayor Cory Booker, a Democrat, went to the Sundance Film Festival in Utah in part to talk up the city with top industry players.

But the nascent industry has been caught in the middle of the state's budget battle, after Republican Governor Chris Christie vetoed a bill that would have reinstated and increased a film tax credit that he suspended last year.

Most U.S. states offer tax credits to film production companies using their locations. But across America, a municipal fiscal crisis is forcing states to rethink their courtship of the movie industry, which has taken up in unlikely locations such as Louisiana with the help of incentives.

Just eight miles from Manhattan and with a seaport, international airport, a robust rail network, Newark -- once a thriving manufacturing center for leather, celluloid and light bulbs -- has worked to overcome its image of urban blight by attracting an array of new development projects.

"It's such a psychological lift for the people of Newark to see their city on screen. It instills a huge sense of civic pride," said O'Brien Kelley, a lawyer who heads the Newark office of Film and Television.

Albie Hecht, the former president of Nickelodeon Entertainment, said Newark "actually has the potential for being a new hub for TV and film."

Hecht was filming his latest project, the Current TV show "Bar Karma," in the Ironbound studio, and said the tax credit would have saved his production about $300,000.
A Good Value?

Such credits are intended to entice producers to film in a state, attracting jobs and fostering a local film industry. But a study by the Center on Budget and Policy Priorities last December concluded such credits were not a good value since the best jobs went to people from outside the state.

Rhode Island, Georgia and Missouri are poised to end their credits, while Connecticut and Michigan are looking at scaling back theirs.

By contrast, Puerto Rico has expanded its film tax credit, while Nebraska is considering adopting one.

Officials in Louisiana say its embrace of the film industry, including a generous film tax credit, has encouraged long-term investment in its flourishing film industry. "Battle: Los Angeles," opening this weekend, was shot in Louisiana, and not in less-generous California as its moniker suggests.

Jeff Steele of Film Closings, a company specializing in film finance, argues that states should "try to capture a market during a down time."

He likened a film crew's arrival to a cruise ship docking -- a boon for local restaurants and other businesses.

"It's a very fast, high-powered start-up that comes in, leaves a lot of money and goes," he said of film productions.

New Jersey's tax credit of up to $10 million per year, began in 2005, allowed producers who spent 60 percent of their budgets in the state to write-off up to 20 percent of those costs. A related credit of up to $5 million was later added to encourage productions for the Internet.

Christie, who has taken an aggressive approach to closing the state's huge budget deficit, suspended the tax credit last year and this year vetoed a bill that would have raised the cap on the tax credit to $50 million.

For now, the tax credits remain suspended.

Meanwhile, Newark -- the location for parts of Steven Spielberg's 2005 film "War of the Worlds," and more recently the 2008 film "Cadillac Records" and many scenes in HBO's hit mobster show "The Sopranos" -- is forging ahead.

The city, nicknamed "Brick City" for its many red-brick, high-rise housing projects, has worked to build a reputation for being accommodating. Last year, the rapper Eminem shot a video for his song "Not Afraid" on a busy downtown street, holding up traffic for hours.

Now, industry watchers say that without a tax credit, the city might be relegated to becoming a place to shoot television commercials rather than movies.

While politicians haggle in budget talks over whether to reinstate the tax credit, the 37,000 square foot Ironbound plans to double its size this year, hoping to draw more business away from more expensive studios across the Hudson River in New York.

And Kelley, of the city's office of Film and Television, wants to launch an education and internship program to encourage Newark kids to work in the film industry.

"People think of it as a career that is so unattainable," he said. "But when you expose them, it just opens up a whole career vista."

(Reporting by Edith Honan; Editing by Mark Egan and Vicki Allen)

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