December 19, 2009
QUINCY — The words “quiet on the set” may suggest imminent action in the world of movie making but in the world of studio financing they have a less promising connotation.
Plymouth Rock Studios’ chief financial officer was in Quincy on Tuesday touting the boost his endeavor would give to the region.
Speaking to the Massachusetts Workforce Board Association, Joseph DiLorenzo touched on all the positives: 14 sound stages, a 10-acre back lot, a hotel village, and 3,000 new jobs.
He said little, however, about what had to be the elephant in the room: the group’s inability to secure the money needed to make the dream a reality.
The studio last month severed a $550 million construction financing agreement with Orlando-based Prosperity International LLC out of concerns Prosperity could not provide financing throughout the 28-month project. Since then, questions have arisen about Plymouth Rock Studios that call into question the project’s viability.
Studio executives say they hope to have alternative financing by next month, but there’s one hurdle that’s likely to remain for them and other studios even if the economy bounces back. It’s Beacon Hill.
It is hard to imagine a financial institution putting money into the local film industry – whether it’s Plymouth or the group planning to come to SouthField in Weymouth – while the state’s commitment to a film industry tax credit is in doubt.
The Legislature has formed an ad hoc revenue subcommittee to analyze tax credits, exemptions and incentives to determine whether the money sacrificed creates enough revenue to justify them.
Proponents of the film tax breaks say they are necessary to nurture a local industry that could bring millions in new revenue to the state. A recent Department of Revenue report, however, found that from 2006 to 2008 the state only saw a return of 16 cents for every dollar spent on incentives.
Whether it’s determined the credits make sense or not, mixed signals from Beacon Hill not only threaten the film industry here, they also potentially damage the state’s ability to woo other employers.
In April 2007, the state Office of Business Development encouraged Plymouth Rock Studio to locate in Massachusetts, saying it could save up to $103 million through state programs. Part of this pledge was a $55 million grant for infrastructure improvements, an offer the state later retracted.
That move and the ever-looming threat to end the film tax credit paint the state as a less-than-reliable partner not only in the eyes of film executives but in the eyes of other industries, which are being wooed in hopes they will bring the jobs Massachusetts needs to thrive.
It’s exciting to dream about what a vibrant film industry could mean for the local economy.
But as long as the tax incentives debate continues, it’s likely to remain quiet on the set. And if the state isn’t careful about its image as a reliable economic partner, that quiet may extend even further.
This editorial is spot on. Congratulations Ledger — at least, you folks are ‘business friendly’! Massachusetts needs to keep its commitment to the tax incentives. The Commonwealth has already disappointed the studio project by rescinding the $50 million I Cubed money that was promised the studio before everyone moved to Plymouth.
There are 37 states with film tax incentives — leave it to Massachusetts to not be in the market.