A look at the Michigan film industry - ABC 12 – WJRT – Flint, MI

A look at the Michigan film industry

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(02/24/13) - It was a cinematic plot that involved a heroic storyline. Hollywood saving Michigan.

It was 2007 - the Great Recession started to set in.

GM was headed towards an economic catastrophe, manufactures were closing up shop and job loss was beginning to spiral out of control.

"The structure of our economy was changing, we were losing these manufacturing jobs to a global world that was too happy to get them and we had to do things differently than we had in the last century in order to keep and attract the job providers," said former Gov. Jennifer Granholm.

Gov. Granholm started looking for ways to bring industry to our state.

Nothing was out of the question - battery technology, green energy, even movie making. Granholm began touting a package of bills to boost Michigan's role in the film industry.

In 2008, a set of bills giving filmmakers tax breaks was signed into law.

Within weeks, Hollywood stars started rolling into small towns, and big towns, across Michigan.

"We saw productions all across the state, they were having mass amounts of productions and the whole state was benefiting," said Dave Rembiesa, in February 2012.

In Pontiac, a former General Motor complex symbolizing job loss and heartache was transformed into an $80 million state-of-the art film studio - Raleigh Michigan studios.

Four investors bought the property in 2009, and for a short time, the studio brought a sense of peace in an otherwise crumbling manufacturing town - but there was a hook. Those investors needed $18 million in backing.

The State treasurer agreed to guarantee the bonds using money from the state workers pension fund

"On the surface, it was a good investment at the time. It would increase employment opportunities for Michigan, it would of put us more on the map," said Bob Kopaz, with the State Association of Retired Employees.

That would come at a cost though.

"Council president for the union representing state retirees says the investment of retirement funds was done without their knowledge," Kopaz said. "Why did they do it? It's never been done before, we found out by a newspaper article that there was money taken out of the fund to guarantee those bonds."

The hope though was that the retirees would get a return on the investment.

Meantime, a changing of the guard was about to cause a shift in the plan.

"The original program that was introduced and passed by the legislature was a different administration and they had different goals," said Margaret O'Riley, of the Michigan Film Office.

By the time the $80 million Raleigh studio opened in May 2011, Gov. Rick Snyder was elected in to office and put a $25 million cap on film tax incentives.

"When the program first started, there was an unlimited amount of money that could be available for a production, it was a 42 percent credit with no cap, and the governor coming into office again, he's all about accountability, transparency and putting some definition around how tax payer dollars are being spent, and wisely so. I think it's hard to run a program when you don't know how much is being spent," O'Riley said.

Before the tax incentives were capped, Raleigh Michigan Studios landed a contract for a big budget Disney movie.

With $39.9 million in incentives from the state, 'Oz: The Great and Powerful' began filming in July 2011.

As production and post-production continued on the set, a battle over the tax incentives continued in Lansing. Amid the uncertainty, filmmakers began taking their business elsewhere.

As the industry remained in Limbo, 'Oz: The Great and Powerful' wrapped up filming in December 2011.

Two months later, with no new projects, the studio defaulted on its payments.

"When the studio went bottom up, the retirement fund was on the hook for $18 million," Kopaz said. "We were duped, like the citizens of Michigan were duped."

It was the epic fall from grace for a studio, that for a moment, brought glitz and glamour to a blue collar town. The Studio is now named Michigan Motion Pictures, LLC.

But the story isn't over yet - it may just have an alternate ending.

Late last year, lawmakers succeeded in doubling Snyder's proposed $25 million tax cap to $50 million.

Now, the Michigan Film Office says they're rolling again.

Projects are underway at the Pontiac studio and big announcements are to come.

"So we're not necessarily in the business of financing a film, we're more in the business of supporting one that's ready to go," O'Riley said.

We asked if there is now enough support with the current incentives to bring a big film to Michigan.

"Oh yes. There's still a good chunk of films, fairly large ones that I think people will be very happy about. I wish I could tell you what they are, but we're just not quite there yet with our signed contracts," O'Riley said.

As we wait to hear what those announcements are, the state is also eagerly awaiting the release of the 'Oz: The Great and Powerful'  that was filmed entirely in our sate. It hits theaters March 8.

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