Economic-Impact-of-Film-Production-Tax-Credits

Assessing the Economic Impacts of Film Production Tax Credits

HR&A has analyzed the economic impacts of film production tax credit programs in New York, Massachusetts, and Louisiana to support key policy goals on behalf of the Motion Picture Association of America.

New York

New York has a long and illustrious history as a center of film and television production. To remain an attractive place for filming and production, New York State enacted the Empire State Film Production Tax Credit, which has supported over 700 film and television projects since its 2004 inception.  In 2012, our study of the New York State Film Production Tax Credit demonstrated the credit’s essential role in bolstering the state’s thriving film and television production industry, generating 28,900 jobs and $6.9 billion in spending. Following the study’s release, Governor Andrew Cuomo released a proposed budget containing a five-year extension of the credit. The extension and enhancement of the state’s film and television tax credit will provide the stability necessary to attract more long-term investments and create more jobs for New Yorkers all across the state. The extension expanded the scope of projects eligible for the credit, accommodates the rise of visual effects spending as a portion of overall budgets, and included provisions to drive more film production and post-production in upstate New York.

 

Massachusetts

In 2013, HR&A assessed the economic and fiscal impacts of the Massachusetts Film Production Tax Credit Program. Our analysis estimated  jobs, wages and economic output generated from filming and post-production activities, and considered the economic impact of production as well as the spending associated with film tourism,  infrastructure investments for production facilities, and value from media exposure. We found, that the tax-credit program generated 2,200 jobs in 2011 and $375 million in state spending, and also significant infrastructure investment. Following the release of our study, the state legislature rejected a budget amendment that would have capped the Commonwealth’s investment in the incentive program.

 

Louisiana

HR&A examined the dramatic growth of the Louisiana motion picture and television industry, in our economic and fiscal impact analysis of the Louisiana Motion Picture Investor Tax Credit  on behalf of the Motion Picture Association of America and the Louisiana Film and Entertainment Association. The analysis considered three major sources of economic impact – direct production spending, visitor spending attributable to film-induced tourism, and construction of studio and other production infrastructure. The Louisiana State Legislature enacted the credit in 2002, and adjusted it to a 30% tax credit on all qualified Louisiana production spending and a 5%  tax credit on Louisiana resident payroll in 2009.

 

From 2002 to 2013, film and television production employment increased by over 5,000 jobs, with estimated production spending of over $1 billion in 2013. In 2013 – considering both production spending and visitor spending attributable to motion picture and television tourism – the credit supported up to 33,520 jobs in Louisiana across all industries, generating up to $1.2 billion in personal income and up to $4 billion in economic output in Louisiana. In particular, visitor spending attributable to motion picture and television induced tourism in the state supported up to 22,720 jobs in Louisiana, generating up to $767 million in personal income and up to $2.4 billion in economic output. The tourism impacts are based on a survey of 1,381 recent visitors to Louisiana conducted by HR&A and Federated Sample, which found that 14.5% of domestic, out-of-state, leisure visitors can be considered motion picture- and/or television- induced tourists.

 

In all of these studies, HR&A used IMPLAN modeling to estimate the full economic benefits of the film credits, capturing the results in terms of jobs, wages, and economic output generated. HR&A also examined the fiscal impacts of the credits, in terms of state and local tax revenues. In all cases, HR&A’s final reports helped demonstrate the value of these types of tax credits for each state.

Downtown Cincinnati Revitalization

HR&A recommended a bold strategy to revitalize Cincinnati’s Downtown, then worked with corporate, civic and governmental leaders to establish the Center City Development Corporation (3CDC), which has so successfully led the transformation of Fountain Square and Over-the-Rhine.

HR&A designed and supported the creation of 3CDC, a public-private development corporation, to steward revitalization and on-going development in Downtown Cincinnati. In 2004, 3CDC, in partnership with the City of Cincinnati began a two-year, $49 million renovation of Fountain Square. The completed project has brought people back to Downtown Cincinnati in record numbers, has spurred investment of over $125 million in additional private investment in the Fountain Square District, and continues to serve as a catalyst for new residential, retail and restaurant development in the region.

HR&A worked as the real estate and public policy advisor for the planning of Cincinnati’s Downtown.

Working in partnership with the City of Cincinnati, Downtown Cincinnati, Inc., the Cincinnati Business Committee, and master planning firm Cooper Robertson & Partners, HR&A crafted a strategic investment plan that addressed a number of Downtown planning and development issues, including enlivening Fountain Square.

 

Fountain Square, the traditional heart of Cincinnati suffered from poor design, an absence of programming and lack of maintenance, resulting in a void of life and activity Downtown. HR&A helped to create 3CDC to guide the redevelopment of the Square, conceived of an innovative financing structure, framed a programming strategy, and shaped the redesign of the public plaza. In the years since, 3CDC has proven to be a successful public-private partnership, serving as the principal advocate and steward of Downtown and its core assets.

 

HR&A also provided strategic implementation direction for revitalization of the city’s most troubled neighborhood, Over-the-Rhine.

Over-the-Rhine, the site of riots in 2001, was crippled by residential and commercial disinvestment, a lack of retail options, and entrenched crime. In response, HR&A recommended a range of interventions including targeted public sector investments such as the redevelopment of its signature open space, creating new parking options, and buying and rehabilitating deteriorated multifamily housing units. We suggested a robust public-private partnership to facilitate reinvestment throughout the neighborhood, plus a regulatory system with revised design guidelines to create a physical sense of identity by complementing and celebrating the neighborhood’s historic architectural fabric. Today, Over-the-Rhine is enjoying a startling turnaround and is heralded nationally as a success story in neighborhood revitalization. Over-the-Rhine is now the center of Cincinnati’s thriving arts community, historic buildings have been renovated into a variety of housing and retail options, major new mixed-use projects have recently come online, and crime has decreased substantially.

 

  • International Economic Development Council Partnership Award, 2009­

Daniel Island

HR&A led the efforts to plan, entitle, then develop the award winning plan for Daniel Island. We also managed the initial phase of development, including financing, infrastructure construction, and creation of the initial residential program, in addition to attracting a vital educational partner. The result is one of the most successful developments in the Southeast.

Working on behalf of the Harry Frank Guggenheim Foundation, HR&A led Daniel Island, a tract of land spanning 4,500 acres in the center of Charleston’s busy waterways, through a comprehensive, award winning planning process, and into construction. Daniel Island became one of the largest real estate development projects ever undertaken in South Carolina. The island is currently home to almost 15,000 residents living in a mix of neighborhoods and some of the region’s top employers, both who enjoy the island’s unique coastal setting in the middle of a thriving metropolitan region. The keys to its success has been an innovative partnership with the City, a commitment to quality design, high standards of development management, and a long term approach to value creation.

HR&A led the creation of a master plan and the first phase of development of Daniel Island.

The master plan for Daniel Island aimed to strengthen connections with Charleston in the East and the suburb of Mount Pleasant in the West. Eschewing the traditional gated community, or suburban subdivisions, the plan included several interconnected residential communities, a large light industrial park, a new port facility, major new parks, and a town center, skillfully balancing environmental stewardship with private development. The plan also included a financing strategy to develop housing options for a diversity of incomes.

 

Under HR&A leadership, the successful template of a new town was developed.

  • Led the process of obtaining all land use approvals, including public outreach that was strongly supported by the community and environmental advocates;
  • Created and led the Daniel Island Development Corporation;
  • Arranged financing for the first phase of development;
  • Developed the design of the residential and commercial products;
  • Managed construction of the initial infrastructure; and
  • Managed the development of the first phase of residential construction, a new school, and the first office building.

 

To date, the Daniel Island Plan has catalyzed over $1 billion in real estate transactions.

  • The Urban Land Institute Award for Excellence in 2007 (cited internationally as the real estate and land planning industry’s most prestigious recognition); and
  • America’s Best Suburban Smart Growth Community award from the National Association of Home Builders.

CityCenterDC

HR&A supported the development of the District’s Master Plan and the developer selection process for the former Washington Convention Center site.

CityCenterDC is a new mixed-used project in the heart of downtown Washington, D.C. consisting of 2.5 million square feet of office, residential, and retail space on the 10-acre site of the former Washington Convention Center.  Former District of Columbia Mayor Vincent Gray lauds CityCenterDC as “one of the most important projects … in the history of the District of Columbia.” On behalf of the District of Columbia, HR&A led the initial concept planning for the site, solicited private development partners, and assisted with negotiations resulting in selection of the current development team.

HR&A supported the District of Columbia from master planning through developer designation.

Working in partnership with Skidmore Owings & Merrill, HR&A developed a reuse plan and program to illustrate the development potential for the site, encourage widespread private interest and ensure long-term economic benefits for the public. We created a development program for the site that balanced ambitious goals for downtown revitalization with market realities and development constraints.

After successfully preparing the conceptual reuse plan, HR&A managed the District’s RFQ/RFP process to designate a Master Developer.

We drafted the solicitation on behalf of the District, setting forth development guidelines and key designation criteria. HR&A evaluated the submissions and advised the District regarding each proposal’s policy and economic implications, identified urban design and financial implications, and ranked the proposals according to a decision-making framework that was established in collaboration with the District.

 

Ultimately, HR&A supported the negotiations that resulted in a Letter of Intent with two finalists, and advised the District on its designation of the Master Developer. CityCenterDC opened in 2015.

Image Courtesy of: SOM

Arlington County Community Energy Plan Development

HR&A advised Arlington County, Virginia on the development and implementation of the County’s Community Energy Plan.

The Community Energy Plan for Arlington provides a comprehensive approach to reducing the County’s greenhouse gas emissions by 75 percent between now and the year 2040. The plan advocates for improving energy generation, use, and distribution to create substantial economic, environmental, and quality of life benefits for the businesses and residents of the County.

The Plan promotes a number of goals which address residential and commercial building energy efficiency, implementation of renewable and district energy systems, transportation-related carbon reduction strategies, general County activities, and outreach and education. HR&A reviewed best practices throughout the United States and internationally to provide context in which to frame these goals and to recommend pathways to success. HR&A recommended implementation actions and public outreach approaches to advance the Plan and its goals, which included incentive and regulatory approaches, improvements to securing approvals, and social media.

 

On Saturday, June 15, 2013, the Arlington County Board unanimously adopted the Community Energy Plan as part of the County’s Comprehensive Plan, approved the Implementation Framework Plan, and directed the establishment of a Community Energy Plan Implementation Review Committee.