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Hollywood companies seek tax credits to build facilities in Hawaii

By Derrick DePledge

POSTED:
LAST UPDATED: 09:43 p.m. HST, Feb 10, 2011



Two major Hollywood entertainment companies have offered to build production facilities on Maui and Oahu if the state sweetens its tax credits.

Executives from Relativity Media LLC and Shangri-La Industries told state lawmakers yesterday that they would commit to environmentally friendly state-of-the-art production facilities that could lure more films and television shows, create jobs and bring additional economic development to the islands.

Film and television production spending in Hawaii was a record $407 million last year, but executives from Relativity and Shangri-La said the state needs to increase its film tax incentives to remain competitive with film production hubs in states such as Louisiana, Michigan and New Mexico.

A bill before lawmakers would increase the film production tax credit from 15 percent to 35 percent on Oahu and from 20 percent to 40 percent on the Neighbor Islands, with 5 percent bonuses for productions involving computer-aided special effects and animation. The bill would also provide tax credits for new production facilities, rebates to help with a local crew training program, and exemptions from hotel-room taxes for productions longer than 30 days.

The state Department of Taxation estimates the state's revenue loss from the bill at $46.3 million a year, a figure supporters believe would be offset by revenues from additional film and television productions.

Ryan Kavanaugh, chief executive officer and founder of Relativity Media, which was behind films such as "Frost/Nixon," "Atonement," and "American Gangster," has a home on Maui. He said in a statement released with Maui Mayor Alan Arakawa that Relativity "can't think of a better place than Maui to focus our efforts towards building a new industry which will help Maui's economy."

Shangri-La, behind films such "Polar Express," "Beowulf," and "For Your Consideration," enlisted some A-list political talent to help persuade lawmakers. Former President Bill Clinton provided written testimony in favor of the expanded tax credits.

"The Shangri-La/Relativity commitment to build the most environmentally friendly stages in existence, coupled with the economic benefits of this bill and Hawaii's timeless appeal, will make Hawaii the most attractive place in the world to shoot a film," Clinton wrote.






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