Denver Magazine / Denver Magazine November 2009 / Paris, Denver, and Hollywood

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Paris, Denver, and Hollywood

Paris Hilton offers a lesson in economics when it comes to luring filmmakers to Colorado.

How do you brand a cow? That sort of thing used to pass for a feature-length film in the early 1900s, says Kevin Shand, director of the Colorado Office of Film Television & Media. And (insert cow town joke) Colorado was the perfect setting. The technology would only allow for three- to six-minute films, but audiences were interested. “One hundred years ago, everything was new to the world,” Shand says.

Since then, more than 357 films have been at least partially shot in the state, according to the Office of Film. In the 1930s and ’40s, there were lots of Westerns, Shand says although the list runs from Things to Do in Denver When You’re Dead (where Denver was actually used) to Die Hard 2 (filmed outside Longmont in Mead). In 1969, Colorado became the first place in the world with a legislated film commission according to the Office of Film.

But at the turn of this century, a new question has arisen over the state’s relationship with the big screen: How do you brand Colorado as film-friendly? It’s not just an issue of glamour, but money, and for an industry so focused on story line and emotion, there’s plenty of economics behind filmmaking.

A study released earlier this year by the University of Colorado Leeds School of Business noted the state’s 2006 film industry output was more than $150 million. The Colorado Film Commission — the previous incarnation of the film office — and other industry groups paid for the $10,000 study titled “Summary of the Impact of Film Incentives on the Colorado Economy and on Public Revenues.” The study concludes that the Colorado Klieg lights are fading.

By last year, film industry output dropped to $145 million in the state, according to Leeds. Without new incentives, the study predicts film output will drop to $109 million by 2013. But if the state started providing $10 million worth of tax incentives, the study says, by 2013 the state could do $245 million in film business.

Get Me Rewrite!

Democrats and Hollywood usually go together, but Colorado Representative Joel Judd, whose district includes LoDo, is not convinced film incentives pay for themselves. He brings up the hypothetical example of Paris Hilton starring in a Colorado film. If she earns up to $3 million here and pays Colorado income tax on those wages, her salary could count toward the state’s current film incentive rebate of 10 percent, or $300,000 maximum back to the filmmaker. Shand and Judd agree Hilton would only pay 4.63 percent payroll tax (or about $139,000). That would seem to leave the state lost on the set. And Judd doesn’t think Hilton would spend much of her after-tax money here. “I guess you’re going to have to color me dubious,” when it comes to the merits of incentives, he says, and notes any increased incentives would likely come at the expense of education or mental health funding.

Shand sees things a little differently. He says Hilton would still have to spend money on things like a hotel room, and the film itself might generate one hundred jobs. Film money is also good, clean money, Shand adds: “You don’t need to build schools, roads, or infrastructure ... and they pump huge amounts of money into the economy and leave.” (Although they may also come back for another film.) Then there’s “film-induced tourism” where people tour the sights where films were shot or based on: France and England for The DaVinci Code, New Zealand for The Lord of the Rings, and Santa Barbara for Sideways.

The Office of Film is on the 27th floor of the World Trade Center with commanding views; it exudes sleek, rather than state government. But while talk of film incentives is in the millions, the reality is more humble. The office is sitting on $900,000 of untapped incentives Shand wants to get into the hands of filmmakers.

Under current legislation, the Office of Film will reimburse filmmakers 10 percent of the “qualified local expenses” for a film, documentary, or television program if it is produced and filmed in state, 75 percent of the payroll goes to Colorado residents, and 75 percent of the budget is spent in Colorado. Out-of-state filmmakers must have at least $1 million in qualifying expenditures; for Colorado filmmakers, it’s $100,000 minimum.

Shand wants to do away with the 75/75 requirement (he would maintain some sort of minimum spending level). He expects a pair of state legislators to carry his idea into a bill in January and believes the chances of passage are “hopefully good” because he’s not asking for more state money. Judd says, “It’s hard to comment on it until you see it written down.”

The Highwayman Came Riding

One company that was working on incentives is Douglas County–based Inferno Film Productions, currently shooting The Highwayman, based on the Alfred Noyes narrative poem about a tragic love story. The film is arguably a $600,000 production, but because much of the equipment was already owned, only about $200,000 in expenditures qualify for the 10 percent rebate, says Darlene Cypser, Inferno president and co-owner and the film’s producer. For Cypser, the rebates may mean more money for her next film. But they did not play into the decision on where to film. “We’re located here in Colorado,” she says. “For us, it doesn’t make sense to go anywhere else.”

Yet the incentives themselves may not even make sense. Near press time Cypser received a contract that would give the state copyright co-ownership of her production in exchange for the incentives. She says none of her colleagues had ever heard of such a thing, and she refused to sign the contract. Shand himself says he didn’t like the language, but it was an administrative and lawyerly-type insert. He doesn’t have the final say (that will likely come from state attorneys) but is going to recommend a rewrite. “It doesn’t do us any good to have this program if filmmakers aren’t going to use it,” he says.