Small businesses benefiting from movie-struck Hub

Trish Seeney’s income nearly tripled over the past two years, letting the freelance makeup artist afford a home in the Boston suburbs for the first time in her 15-year career.

The reason? More movie-making in Massachusetts.

A revision of the state’s film tax credits earlier this year has opened the floodgates, putting Massachusetts on the “A” list as a desirable location for filming major motion pictures. Mega studios are currently shooting three movies in and around Boston — an unprecedented volume of films being made at one time in the state.

The activity means more than celebrity sightings at upscale restaurants. The increase in action is causing a surge in business for a range of companies and individuals related to filmmaking: Actors and freelancers are getting more, steady work; equipment rental companies and hardware stores are seeing double-digit increases in sales. Many owners and workers cite the revised tax incentives as the main reason for the booming business.

In the two years since the state film tax credits became law in 2006, total spending by moviemakers has been $154 million with six films, including the three movies — “Pink Panther 2”, “Bachelor No. 2” and “The Women” — shooting now, according to the Massachusetts Film Office. Before the tax credits, filmmakers spent $67 million in Massachusetts over seven years making five feature films.

Among the beneficiaries:

Backstage Hardware, a mom-and-pop owned store in Boston’s Seaport District, had its “best August ever”, according to owner Janet Engelson. The store, which has been operating for eight years and sells theatrical supplies, saw a 26 percent increase in sales for the month compared to last August. In September, Engelson said sales were up 16 percent over September 2006.
“There was a dry spell for awhile,” said Engelson, whose store’s annual revenue is below $1 million.

E-Z Disposal Service Inc. , a trash-collecting service in Revere, gets a 5 percent boost in business when producers call on them for dumpsters. This year “Bachelor No. 2” even requested an old beat-up dumpster as a prop. “They paid for transportation,” said operations manager Rolly Flynn.

Atlantic Tent Rental Co. sees an additional $10,000 to $50,000 in his pocket when movies are in town; the Leominster company supplies tents, tables and chairs to studios shooting outdoors. Owner Barry Perla thanks the tax incentives for the added cash.

Boston Casting Inc.’s founder and director Angela Peri said she had to hire five additional people earlier this year to handle the increased business from the uptick in movie-making, which is adding up to 20 percent more to her bottom line and keeping more of her 20,000 actors on file in work.

High Output Inc. , a Canton-based company that rents lighting, sound and audio-visual equipment for film and television production, sees a 10 percent increase in rental business, and an up to 5 percent increase in his overall business, when movies are made in Massachusetts.

Membership at Local 481, part of the International Alliance of Theatrical Stage Employees union, whose workers are behind the camera, shot up 37 percent in 2006, the first year the tax incentives were made law.

The close-up on Massachusetts has Hollywood producers circling the city for ultra high-end residential rentals for stars and scouting for studio spaces between 20,000 square feet and 100,000 square feet, according to Marcel Quiroga, a private wealth specialist with Merrill Lynch’s private banking and investment group. “I think there is huge potential as far as business opportunities for industries that serve the filmmaker industry,” said Quiroga. “It’s the tip of the iceberg.”

Two movies, “The Box” starring Cameron Diaz and “The Lonely Maiden” starring Christopher Walken, Morgan Freeman and William H. Macy, are slated to start filming in the state later this fall. Other projects are pending.

“Without those current (tax) incentives, those films would not have shot in Massachusetts,” said High Output President John Cini. “(Massachusetts) has always been an attractive state — now it’s economically attractive as well.” The tax credit has a short history in Massachusetts.

The law took effect in 2006, allowing filmmakers to receive a certain amount of credits with a $7 million cap and a $250,000 minimum on in-state spending. In July of this year Gov. Deval Patrick signed into law provisions, which were retroactive to January 2007. Those provisions were dropping the cap, lowering the spending bar to $50,000 and increasing the percentage of credits. For any entity to be eligible, the money must be spent in Massachusetts.

According to the law, producers and filmmakers can receive a 25 percent tax credit on all in-state spending, including payroll, provided workers are paid in Massachusetts. There is no sales tax on production spending.

Because the provisions were made Sony/Columbia decided to film “Pink Panther 2” in Massachusetts rather than Rhode Island, according to Nick Paleologos, executive director of the Mass. Film Office.

In addition, those tax credits can be transferred to a broker, sold to another taxpayer or carried forward for five years. They can also be sold back to the state, which has guaranteed a 90-cents-to-the-dollar return.

As for Seeney, she’s head of makeup for “Bachelor No. 2,” previously unheard of for a local girl to be boss of an L.A. production.

“We lost a lot of work to Canada and other parts of the world,” she said. “Without a doubt, in the last year, the abundance of work (is) due to the hard work to have that incentive put in place.”

Source: The Boston Business Journal, October 12, 2007, A trickle-down story from Hollywood
Small businesses benefiting from movie-struck Hub by: NAOMI R. KOOKER

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