Lack of film incentives deal jeopardizes Gateway Studios plan - East Valley Tribune: Mesa

Lack of film incentives deal jeopardizes Gateway Studios plan

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Posted: Tuesday, April 12, 2011 3:55 pm | Updated: 11:54 pm, Tue Apr 12, 2011.

A planned movie production studio in Mesa is in jeopardy as the Legislature is close to ending its session without passing a film production incentive bill.

The $70 million Gateway Studios relies on tax incentives to lure investors and producers, but developer Vince Stark said he expects key lawmakers will continue to fight the plan.

Stark put the studio plan together after seeing movie producers looking to cut the expensive California prices, and figuring Arizona was a good alternative because it’s so close to Hollywood. But lawmakers have essentially killed the bill this year.

“From what I understand, there’s not much hope for this year,” Stark said. “Next year is questionable but we will take this major effort upon us again to overcome the political agendas of certain individuals.

Senate Bill 1159 won approval in the Senate but was blocked from a vote in the House, where Rep. Jack Harper, R-Surprise, held the bill through his position as chairman of the House Means and Ways Committee.

Harper’s reasoning has the intrigue of a Hollywood film, according to one of his memos that incentive supporters have posted online. Harper wrote on a Thursday that the bill was widely expected to fail in a committee hearing the next Monday, which opened the door to illegal activity.

“Rather than risking that committee members would endure a weekend of coercion and possible attempted bribes, I have arbitrarily decided to remove SB 1159 from the agenda and end the proposal for the year,” Harper wrote. “When one business stands to gain $35 million to $50 million in a single piece of legislation, felony quid-pro-quo’s are bound to materialize.”

Harper didn’t return a phone call to comment, but said in his memo the incentives were a drain on taxpayers and likely unconstitutional.

House Speaker Kirk Adams, R-Mesa, killed a similar bill last year by not allowing a full vote of the House. It passed the Senate two years in a row. Incentive supporters speculated Harper held the bill because it had enough support to pass a House vote.

Movie production can be worth hundreds of millions a year in Arizona, said Mike Kucharo, president of the Arizona Film & Media Coalition. The activity includes big-budget Hollywood blockbusters, television shows, commercials and even video games.

The state’s five-year incentives expired at the end of 2010. Production has slowed considerably with the incentives going away, Kucharo said, because most other states offer incentives. Several studios have been planned in Arizona, but it doesn’t make sense to build them unless the credits come back, he said. He knows of at least one proposed studio that decided to build in New Mexico, where incentives have triggered a boom in that industry.

“We have the people, we have the experience, we’ve been making movies in Arizona almost as long as they have in Hollywood,” Kucharo said. “New Mexico can’t say that. Now they’re the backyard to Hollywood.”

Stark said Gateway had a dozen studios lined up at his facility if the incentives were passed, bringing 200-300 jobs. Mesa has already approved the studio, near Ellsworth and Germann roads.

Incentive supporters say production typically requires hiring a large number of locals, and that incentives only apply to money spent on Arizona employees. The state was once big in the production industry but has fallen behind, said Ken Chapa, program manager for the Arizona Department of Commerce’s Film Office. Industry changes hurt places without incentives, he said.

“A project is not guided by location, (but) it used to be,” Chapa said. “Location is like third down on the list. Now it’s, ‘What’s your incentives?’ and, ‘What does your work force look like?’ ”

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