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A New Business Genre For Michigan



The debate over Michigan's film incentives has gotten heated with rhetoric that often obscures the very real issues it is attempting to address, namely the exodus of young talent from our state and our lack of economic diversity. Silly statements about fat cat Hollywood types (as if other industries didn't have rich people at their helms) sucking Michigan dry of tax money have overshadowed important discussions about where our we are headed and what policies we can put into practice that will turn our foundering ship of state around.

While there is no illusion that Michigan's generous incentive to lure film productions here will solve our financial woes, it is a small effort intended to inject some energy and creativity in a sector that has never been able to flourish in the Mitten State. Proponents say that anything that creates so much buzz, entices young creatives to stick around and opens Michigan to the rest of the country is a welcome step in the right direction. They say that all discussions should look beyond the immediate dollar in, dollar out impact of the program and instead focus on the potential long range gains from the incentive. After all, when was the last time you heard someone from California complain that Michigan was stealing their jobs. 

The incentive also represents a tiny part of the state's enormous annual budget (estimated to reach $40 billion). Still, there is little doubt that it is emblematic of a new way of thinking about the transformation of our industrial and creative centers.

Keep this simple fact in mind: The only products the United States exports more of than it imports is software and media. Michigan's film incentive has allowed us to put a foot, well, more like a toe, in that door.

And through that toe-sized crack Genre Film Partners has squeezed through to set up shop in Metro Detroit.

Wooed by local entrepreneur Ken Higbee to come to Michigan, and sharing a small, non-descript Southfield office, partners Julie Richardson and Jon Karas announced that their film start-up company intends to produces eight to ten films in Michigan with budgets of $2-$10 million.

More promisingly, these two Hollywood veterans and their new local partner expanded their mission beyond simple movie-making profits. Genre Films intends to help grow the film industry here in Michigan by starting internship and mentoring programs, helping to build the state's crew base, bringing post production projects here and then reinvesting in the community by setting up a slate of Michigan-made films (rather than a series of hit-and-run productions).

"Ken said we need to do something different, something other production companies weren't doing," says Jon Karas, a former attorney and agent at the William Morris Agency. "We need to make a home in Michigan and become a part of the landscape. And so we came here with the idea that we want to give back as much as we take out."

Genre Films sees its future tied to the state, committing it to build long-lasting relationships with local businesses, investors, sponsors, and suppliers. With an impressive board of advisors, including Frank Darabont (The Shawshank Redemption, The Green Mile), Chuck Russell (Scorpion King) and film and television producer Jay Firestone, and a plan to focus on genre films (thus the name) like horror, thrillers and small character comedies (think Juno or Garden State), Genre sees a unique opportunity to make profitable, modestly budgeted films aimed at 12-29 year-olds.

In their cramped but collegial conference room, Metromode sat down with the company's three pincipals to get a better view of what their ambitious film start-up has in mind, how Michigan's film incentive package fits into their future, and where their industry is heading.

Karas is clearly the more nuts and bolts member of the team, offering matter-of-fact observations and opinions about the economic and political realities of his industry. Richardson is the charismatic enthusiast, an energetic and charming producer whose past successes (Collateral with Tom Cruise, in particular) have wetted her appetite for greater involvement in the industry. Smart and funny, she has an obvious love for the creative process of film. Higbee, new to the industry but no stranger to the complexities of financial investment, sits back listening and nodding, offering only an occasional comment. 

METROMODE
: Your film, The Collector, was filmed in Louisiana, taking advantage of that state's film incentive program. How was that experience for you, and more importantly, for Louisiana?

Julie Richardson: Louisiana has profited greatly from their incentives. But LA is an interesting bag of goods. The boys behind The Collector would often complain how hard it was to get to Shreveport, which is where the state's film industry has become centered. Their incentives are a discount rather than a credit, and so given the state's, well, interesting politics, there's a Huey Long type of process you have to engage in.

Because Michigan has taken the rebate route ľa rebate being the most effective investment return- and at such a level, it really allows us to choose to shoot here first, especially since there are certain limitations to shooting in Michigan, namely the weather.

JON KARAS: But to answer the question about whether it made a difference for Louisiana, the answer is a resounding "yes". They created tens of thousands of jobs since passing their incentive and they created tens of millions of dollars in revenue in the state, which is why they re-up the program year in and year out. It's had a huge impact on building industry where there really wasn't one.

The model used to be that companies would come in to occasionally shoot in New Orleans, then leave. But the rebate allows companies to come and put some flags in their ground, which is exactly what we're doing here. We actually see ourselves as early adapters, moving into Michigan because we believe in the direction the state is headed. Louisiana has built a whole industry from physical stages, to post-production facilities, to a whole  infrastructure of well-trained crews and equipment rental companies, location scouts, etc.

METROMODE: On the flip side, are they now going to suffer because Michigan has lured away business with a more effective incentive package? After all, you've been quoted as saying that if The Collector did well enough at the box office you would shoot sequels here rather than there. Are we just joining an incentive arms race?

JULIE RICHARDSON: I see what you're saying, but we're buying into the community here, not just planning a single film. And the community here has been incredibly enthusiastic and generous, which makes an incredible difference for a company like ours. It is absolutely the size of the incentive that brought us here initially. And then we discovered all the state had to offer. So, now the appeal is multi-faceted.

We hope that Michigan continues the rebate program. The fear is always that we'll move here, make a commitment to the community and then the legislature says we can't do this anymore. So, it's definitely a gamble on both sides.

JON KARAS: We do think about it. What if we shoot two films here and the legislature rethinks the incentives? Well, we'd have to rethink our being here. But to the degree that this incentive continues, our goal is to put firmly down roots here. We intend to have offices, employees, production facilities, post-production facilities and equipment that is based here in Michigan.

METROMODE: How does Michigan stay relevant to the marketplace as other states, even countries, vie for film productions. What's going to keep The Collector 3 and 4 here as opposed to moving on?

JON KARAS: One thing that is so appealing to us is the geographic diversity. Even here, right now, you can go half an hour and you're in farmland or downtown Detroit or suburbia. So, the ability to shoot in two or three locations in a day or even a week is very practical.

JULIE RICHARDSON: And that's coming from a guy who just shot a film in the jungles of Thailand.

The ease of travel here is really important. It's a non-stop flight to L.A., which is huge. You wouldn't believe how tired you get of layovers, especially when you're bringing in actors and above the line talent, or if we have to shuttle back and forth. The trouble of getting talent to Shreveport for The Collector was just so difficult, with connections through Dallas or Houston.

The other thing is how much the community is getting involved. For example: As we were out trying to make housing deals for our next production, local businesses have really been willing to work with us. That interest and accommodation reaps huge rewards for us and encourages us to stay as a start-up film company.

KEN HIGBEE: As a former Californian who has been living here for nearly 20 years, one of the things I saw as important was getting the local business community to really grab a hold of this and become investors, that way they benefit from this incentive as much as anyone in Hollywood. I mean, my philosophy is why not do it ourselves, become investors, rather than leave it to out of state investors?

JON KARAS: As we have met with local investors and members of the community it's very clear they feel a great sadness that so much of their talent, their kids, are leaving the state. We're hoping to provide an opportunity to stay.

JULIE RICHARDSON: It's interesting to see the way cash flows into the community from productions, because it can impact everything from local restaurants and dry cleaners to transportation and construction. If you want an illustration of that, just think about the enormous dip in business L.A. suffered during the writer's strike. It was huge. Because films weren't being made a lot of businesses that have nothing to do with the film industry were affected. It demonstrates how much a part of the local economic fabric film productions can become.

METROMODE: Your website talks about building infrastructure and offering mentorship and educational offerings to Michigan workers. Can you expand on that? What do you have in mind?

JON KARAS: One thing we really want to do is bring in different categories of mentorship. So, for instance, we'll bring in people to lead mentorship programs for both above and below the line positions. That means writer's workshops, directors, and us as producers offering guidance, as well as the more technical positions - props, design, electrical, etc. We want to provide consistent, practical experiences, which will provide a path of learning that will also help Michigan crews to accumulate credits in the industry. That way they can go out and get jobs with other production companies. We want to offer continued exposure for both college grads and high school kids.

JULIE RICHARDSON: The truth is, I started out as a PA, hauling trashcans. But because I was on the set all the time I learned so much. I think that exposure is invaluable. In particular I have a huge affection for writers, especially first time writers, and I will tell you, it is a lot of extra work for me. But if you find that unique voice, it's part of what this business is all about, what makes it exciting.

METROMODE: So, right now what does Michigan need most to make this industry work here?

JON KARAS: Deeper crew depth. The biggest thing the state needs is more experienced crews. That's been the biggest complaint we hear from people when they go to a new state. Because Louisiana and New Mexico have had so much of a lead in this arena, Michigan has to catch up. I had a producer who was shooting in New Mexico three years ago and he complained he couldn't find the crew he needed. Today, the state has it. It was the same story for Louisiana five or six years ago. So, it's building that base and understanding that it'll come but it takes time to develop. That's why the bigger, more expensive movies aren't going to come right away. They aren't going to take chances because they'll have to fly in a whole lot of people, which ruins your incentive credit. If they have to bring in and house the vast majority of their crew it really dilutes the benefit of the credit and makes the difference between a Louisiana or New Mexico and Michigan far less significant.

METROMODE: Do you get the sense that Michigan is acting proactively in this way?

JON KARAS: I think they are but I think it takes time. The state has to be a little bit patient because it's sort of a catch-22: People won't come because there isn't enough crew depth, but then the state says they won't get enough crew depth until there's enough production.... So, it's going to make the path toward an appropriate level of production take a little longer than anyone wants. You have to be patient and understand that local crews need to get four, five, six films under their belt. And because of the thin schedule in the winter that'll mean a little more time than a place like New Mexico where you can shoot 365 days a year. But that's the nature of the beast. If Michigan stays committed they'll see it happen like those other states did.

JULIE RICHARDSON: And we're already seeing evidence that it's happening. The film office has been pointing us to Michiganders who moved away to be part of the industry out west and now they're moving back. That's a good sign.

JON KARAS: Of course, they don't count as Michiganders until they've been back for two years.

METROMODE: As a state that has had to deal with the decentralization of the auto industry, Michigan knows all too well the pain of losing its core business. How is Hollywood reacting to the decentralization of film productions and what does it say about the future of the industry?

JON KARAS: Like the auto industry, some part of it goes away, some doesn't. The physical production might go places like Michigan or Eastern Europe or Asia, or even Quebec and Ontario, which recently expanded their credit to 30 percent. Those places are definitely trying to pull the productions away from L.A. and it's for good reasons. But the center of the business --the studios, the distribution, the talent agencies, the banking, the bond companies -- that's not going anywhere.

JULIE RICHARDSON: Hollywood has been trying to take counter measures against this idea of runaway productions but it's largely been unsuccessful. The state isn't really in a place to finance any incentives, and the truth is, they already provide many. So, they're caught between a rock and a hard place. Still, there is still a level where it is very cost effective to make a film in L.A., either really cheap or really expensive. If it's less than $2M it's amazing what you can get away with.

JON KARAS: Or if it gets to be a big expensive studio movie, where the stars can basically say, "I'm not leaving home." People like Eddie Murphy simply refuse to get on an airplane.

JULIE RICHARDSON: We are definitely feeling a gap that is not being filled. Studios cannot make movies at this budget level. They much prefer acquisitions. The Collector is a great example. The eradication of the smaller studio specialty units, like Fox Atomic, has opened up a market for us to step into. There is no one other than maybe Lionsgate that is doing what we're doing. Especially at this price point. And Michigan's incentive helps make that possible.


Jeff Meyers is the managing editor of Metromode and Concentrate. He also moonlights as a film critic for Detroit's Metro Times. Send him your thoughts or ask for a movie recommendation by emailing him at: jeff@metromodemedia.com

Photos:

Film crew in Eastern Market

Julie Richardson and Jon Karas during a production meeting

Julie Richardson

Jon Karas

The Collector promo art

Photographs by Detroit Photographer Marvin Shaouni Marvin Shaouni is the Managing Photographer for Metromode & Model D Contact Marvin here
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