A California animation company, Grasshorse Technologies, has announced it’s going to move some of its operations to Iowa to take advantage of those tax incentives. The company has not determined where it will locate but says it will employ probably around 10 to 20 people.
We wanted to get a bit of a filmmaker’s perspective, so we’re joined by Bruce Heppner-Elgin, who is an Iowa filmmaker and co-founder and president of the Iowa Digital Filmmaker’s Guild. And beside Bruce is Steve Schott, who is one of the producers of the recently opened “The Final Season.”
Mundt: Thanks to both of you for coming and talking with us.
Schott: Thanks for having us.
Heppner-Elgin: Thank you.
Mundt: Steve, this was a long-time project for you to get this act passed. How long did it take?
Schott: I worked on the act for about four years. We started with the Iowa Motion Picture Association, and when we started to do “The Final Season,” I kind of used it as a platform to invite legislatures to the set so they could see the economic impact on the community. I think that had a lot to do with getting it passed.
Mundt: For you as a filmmaker and someone who wanted to see this come through, why was it so important? How does it position Iowa competitively, for instance, in getting films?
Schott: Well, we were just behind the eight ball. We had states around us – Illinois, Missouri, Wisconsin, even -- and Canada, of course, that had tax incentives. And I worked at the film office for a year as a consultant, and the first call that I’d get from a producer, the question was “Do you have a tax incentive?” “Well, no, we don’t.” Click. So you just lose business before you even have a chance to pitch your state or pitch your locations. At least with this we leveled the playing field. And Iowa got very aggressive and we more than leveled it because a lot of the incentives around us are only 20 percent and we’re at 25 percent.
Mundt: I saw one statistic that said 25 percent for Wisconsin. I don’t think that covers all of the elements that Iowa covers, but everyone is lower, 15 percent, 20 percent.
Schott: Well, that’s why we went higher. We have the advantage of looking at them first and seeing what was out there, so we really pushed for the 25 percent in order to bring production here.
Mundt: Five years ago it was very economical to go to Canada to produce. Now the exchange rate has flipped. I think as of today, it’s about $1.07 to the Canadian dollar. Do you think that will have a long-term impact on the amount of filmwork being done that’s going north of the border?
Schott: Absolutely. You have two things. One, they don’t have the bigger tax incentives anymore. The government was subsidizing it and they pulled back. And then, of course, the Canadian dollar is so strong, so it’s no longer viable – economically viable for the studios to go there. So they’re looking again at shooting in America, New Zealand, Bulgaria. A lot of places are still offering low crew rates and low location costs, but I think Iowa can compete on some of that level.
Mundt: Bruce, what’s the impact on you? You’re sort of on both sides of this. You work for other films but you also do your own films. What does this act mean for you potentially?
Heppner-Elgin: As a filmmaker who hopes to reach that $100,000 mark, and that’s the minimum amount that must be spent in the state in order to take advantage of these incentives. But as someone who is getting ready to, you know, to make films of, you know, that general budget range, it’s a big help because it’s going to make it easier to raise money and it’s going to make it easier to recoup your costs. And you know, being able to tell your investors that they’ve got a 25-percent, you know, tax incentive right there makes it a little less painful and worrisome for them. It takes away just a little bit of their fears. But as somebody who is out as a freelance worker -- And there are so many productions, and it’s really quite easy. You don’t have to be making a feature film. A lot of commercials pretty easily – This is – You know, for someone who’s not in the film industry, this is a bit of a shocker, but a commercial easily costs over $100,000. They’re spending more than that in Iowa to make commercials. And so, you know, my wages aren’t taxed on those. And since there’s more of them coming in, I’m getting more work, you know. So the heat stays on.
Mundt: For you as an independent filmmaker – As you said, some commercials can go over $100,000 very easily, which is very surprising to think about. Are the kind of works that you’ve wanted to put out in that $100,000 or higher range, or are you trying to aim up toward that now that you see that opportunity there?
Heppner-Elgin: I’m trying to aim up towards it because I think it’s a pretty good idea to build a little bit of a business history when you’re talking to investors. You don’t want to just come straight out of the box --
Mundt: With a $3-million --
Heppner-Elgin: Yeah, right. The first film you ever want to make, yeah, I want to make a $10-million movie, you know, and people will go “you bet.”
Schott: Why weren’t you there when we were making our film? That's what we did. [ laughter ]
Mundt: Well, how would this have been different for “The Final Season,” if you had had this? Would there be a measurable impact on what you were able to do in Iowa if you had this act?
Schott: Yeah, we spent about a million dollars in Iowa on Iowa goods and services, so that would have been a $250,000 rebate for us or tax incentive for us, which we could have sold off and used that money for a lot of things, marketing, promotion, more graphics that we needed to do, whatever. So it would have come in handy.
Mundt: Were your investors in Iowa or were they outside the state or a combination?
Schott: We actually ended up getting investors from in the state of Iowa. Almost all of the money was raised here in Iowa, it sure would have been nice if they could have had the tax incentive too. We were a year too late -- Or we were too early and the tax incentives were a year too late.
Mundt: Can you give me a sense of how -- I understand, you know, films have planning cycles and production cycles, and no one can probably turn on a dime and just come to Iowa because there’s a new act. So if we’re assessing the success of this act, we probably can’t start right today. But do we expect a positive change in the number of film productions in the state over one year or two years or five years?
Schott: I think you’ve seen an immediate impact. This “Duck Farm Number 13” would not have shot here had it not been for that. “The Italians” were here in Davenport earlier this year and ended up setting their base of operations in Davenport as opposed to across the river in Illinois because there was a tax incentive. They’re coming back next year because there’s a tax incentive. And then there was a third baseball movie – or another baseball movie shot in Davenport this summer that came here because of it. I know of three projects that spent money here specifically because of this tax incentive bill.
Mundt: That’s a good point. And if you’re planning to cater, for instance, you could determine, if you’re near the border, well, you know, I’m going to cater in Iowa rather than having it come across the river because of the potential of just having all of this additional incentive that’s there.
Schott: Yeah, we have beautiful scenery on both sides of the state as well as in the middle. But if you’re going to shoot along the Mississippi River, you could house everything in Illinois and get their tax incentive even if you came across to shoot. Well, now it’s more profitable to stay in Iowa.
Mundt: Now, we’re going to, as a state, going to give up a little bit of tax revenue to do this, but the hope is that the kind of revenue that the state is able to generate through jobs and all the rest will make up for it. I guess what I’d like to find out is what kind of revenue can films bring into Iowa? You know, we don’t get probably a lot of blockbusters, but we do get a lot of potentially independent movies that could be coming to Iowa. What kind of money do they generate and over how long a period do they generate money?
Schott: Well, again, if they’re spending a minimum of $100,000, the little bit of money that we’re giving back, the $25,000, is minor because not only are they spending $100,000, which helps employ people – It goes to locations; it goes to services – but it brings crews here not only from within the state but from without the state who travel here, so that’s an expenditure. They buy food. They buy alcohol. They buy tourism stuff, so they’re spending money. Then it’s the residual effect that, okay, we hire a carpenter, the carpenter goes to the local store, and he is buying goods and services and maybe buying new tools to do the job. So it just helps the entire economic base. It’s not just what the movie spends.
Mundt: The hope is that that multiplier effect -- We were talking just a few minutes ago about “Field of Dreams.” Obviously there was a residual effect that continued year after year after year.
Schott: The residual effect is in tourism. We hope to get that on “The Final Season,” that people will travel to Cedar Rapids and Norway, Iowa, and they will bring their checkbooks and their dollars with them and spend them for whatever knickknacks are sold or food and hotels and travel and everything else.
Mundt: Bruce, the piece referenced this issue we have with the work force in Iowa that is able to service essentially the film industry. This is part of what you do, and you probably have connections that go out to others in Iowa in the state. What are your thoughts on how we build a work force that can meet the demand?
Heppner-Elgin: Well, I think first we have to realize there are a lot of very talented people in Iowa, and it’s a great place to make films because we’ve got this great base already. But the problem is that now we’ve got so much business that we do get stretched a little bit thin, and we do – We do have to honestly admit that. I’m part of the Iowa Motion Picture Association. We’re trying to talk about training but also, you know, with a lot of the positions, you don’t have to have twenty years of experience already. You can come onto a set and learn some of the jobs on the set and then move up to bigger positions with, you know, each project that you’re working on. And so the group that I’m with a lot of the time, the Iowa Digital Filmmakers Guild, is about independent filmmakers that are working to help each other. And so we take the skills that we learn on our own movies and can apply them to films that are coming in, but then we can also bring what we learn on those and bring it back to our own movies and make even better movies here.
Mundt: There are unionized production facilities for this, and when a movie comes to Iowa, they follow the Union guidelines or are they able to hire outside? How does that work?
Heppner-Elgin: Both, yeah.
Schott: And further to what Bruce is saying, we brought a lot of people back for “The Final Season” that were ex-patriots of Iowa that have gone off somewhere else, North Carolina or California or Texas, to make films and came back here and worked as locals and have told me that if there was enough work, they would move back to Iowa. These are very highly trained, very experienced people, so there is a base of people outside the state that would like to come back and work here.
Mundt: Did you have crewing problems when you were doing “The Final Season?”
Schott: We did. We probably had 50 percent outside of Iowa and 50 percent in state. So, yeah, people are doing commercials, they have other gigs, there’s things going on, and it’s hard to get them to commit for three weeks or four weeks or six weeks to a project.
Mundt: We have just a couple minutes left. I wanted to ask you – both of you, but to start with, Bruce, about film festivals. You just started a brand-new film festival in Iowa city, which had a pretty good start and has some notable recognition coming for this coming year and additional assistance to make it even bigger. What’s the role of film festivals in promoting independent film?
Heppner-Elgin: We had one of our attendees, somebody from the community, say that she had never seen a short film before. And she came and saw it and was – and loved it. She was in awe that, you know, you could see something other than a television program or a feature-length film. And so the film festivals, which we now have all over the state, are doing a great job of showing people what independent film can be and that not everything has to look like a Hollywood blockbuster – Sorry, Steve – but, you know, there’s a lot of different voices out there and it shows kind of the democracy of film that’s starting to come up nowadays.
Mundt: For you, then, as an independent filmmaker, it’s getting extra people to watch. It’s not necessarily generating a lot of revenue for just -- but it sounds like a lot of that return is over a longer period of time, higher notoriety, better appreciation of your work.
Heppner-Elgin: Right. And that’s one thing that the independent filmmakers aim for with film festivals is that they can say that they were at this film festival or they won that film festival, and that helps them build a little bit more momentum for their next projects.
Schott: It’s also a great learning tool is you don’t really know how you did until you can show it to an audience and see how they react. And you go to the film festival and you not only get to see them react, but to hear their comments. It’s an educational tool.
Mundt: Have you been able to do that with “The Final Season”? Did you get -- I don’t know. Before it opened, did you get an opportunity to take it to some film festivals?
Schott: We went to Tribeca Film Festival and opened there, and that’s where it actually premiered. And that was the first time that I actually saw the film with a real audience, and it was a New York audience, and I was a little concerned that they wouldn’t get this whole Midwest thing, and they just loved it. That was one of the things that really encouraged me that we made a good film.
Mundt: Why did you come back to Iowa and decide to make films here? There were a lot of places where you could go.
Schott: I came back to Iowa to raise my kids. I don’t think I came back here to make a movie. I thought I was done making movies when I moved here. But I’d lived in L.A. for fifteen years and done network television and produced commercials and never got the chance to make a movie there. And after raising the boys here and getting them through college, this opportunity came along and I said, you know what, I’m not going to get another chance, I better grab at it. I loved the story and got to make this movie.
Mundt: Bruce, what are you here? You could probably have an easier time of it, I would assume, if you were out in Los Angeles or on the East Coast, couldn’t you?
Heppner-Elgin: Yeah, yeah. There’s always – Like we were saying, there’s all kinds of work out there. And as a screenwriter, you know, I still have that inner debate, should I go out there and have my address be there so that when a producer reads one of my screenplays they see, you know, the L.A. address and not the Iowa address. And I think one of the main reasons I stay is that Iowa has been great to me, and I want to give back what I can to Iowa.