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Showing posts with label Commentary. Show all posts
Showing posts with label Commentary. Show all posts

September 27, 2017

Challenging the accepted wisdom: Are CA film tax credits a good use of public funds?

Jobs are good. Ask any politician. Who could be against jobs? You might as well be against apple pie.

More than likely, that is what Governor Jerry Brown was thinking when he signed the Film & Television Tax Credit Program 2.0 into law. As he said at the time, “This bill helps thousands of Californians, from stage hands and set designers to electricians and delivery drivers.” (excerpted from the Washington Post)

Embed from Getty Images
Gov. Brown signs AB 1839
granting tax credits to Film and Television Producers (9/18/14)
(Note: Getty images requires an ad be displayed in order to use the image. This is an exception to our non-commercial policy.)

The California the Film & Television Tax Credit Program was started back 2009 to stem the tide of runaway production. Places like Georgia, Louisiana, Canada and the UK were luring away productions with generous tax credits and other incentives. (see Jobs and Georgia on my mind). The California Tax Credit Program provided competitive incentives to companies that produced in California.

It appears the program was effective. FilmLA reports that the number of shoot days has increased 50% since 2010, and California Film Commission reports that every for $1M in tax credits there was $8M in direct spending.

Could there be a better use of our tax dollars? Possibly.

This past summer the LA Times published an op-ed piece by Steve Malanga called "When will states get smart and stop subsidizing movies?" (The op-ed was excerpted version of a longer piece published in City Magazine.) Malanga is the managing editor for City Journal*, In case it isn't obvious from the title, Malanga has a conservative, free-market bent. He's also no fan of Hollywood's political activism.

Putting aside his biases, Malanga makes several compelling claims that challenge the accepted wisdom that subsiding films is good for jobs. Here's a recounting of several of the points he makes in the City Magazine article:
  • Film jobs are temporary.
    Historically tax incentives are intended to boost development of businesses that produced permanent jobs. By contrast, film productions tend to produce temporary employment and rarely produce enduring assets to the economic infrastructure.
  • Film companies are mobile.
    A Film production can go to were the incentives are most generous. The mobility encourages bidding wars between states causing tax credit inflation. NFL owners have practiced a similar strategy to obtain public funding for new stadiums (ask San Diego).
  • The number of states offering incentives has grown. The benefits are short-lived.
    The cost of incentive-based competition has gone up. In 2002, 6 states offered incentives. In 2010, 44 states offered incentives. During that period total incentives increased an order of magnitude from $100M to $1.5B

    Malanga cited a recent example from Maryland. The producers of House of Cards threatened to move their production to another state if Maryland refused to provide more incentives. The Maryland legislature increased the incentives by $10M. The result: according to a Maryland legislative report, House of Cards and Veep have received $60.3 million of the $62.5 million credits.

    Similar cases were reported in Louisiana and Florida . Louisiana distributed $1.4B in filming incentives between 2008 and 2105. The Lousiana legislature the capped the program and, despite the prior investments, production dropped 90%. In Florida, an HBO series left when the tax credit program ended.
  • Most jobs go to out-of-state residents. Buying film jobs for residents is expensive.
    A Massachusetts report estimated the state spend over $125K in incentives for every film job that went to a Massachusetts resident. Michigan spend $37.5M in credits for 973 in-state jobs of which 216 were full-time film jobs. New Mexico reported that only 35% of key jobs went to residents.
We should point out the article does not reference source materials, so the reliability of the numbers could not be confirmed. However, if we take Malanga's claims at face value, they raise a challenging question: If most of the jobs are not going to residents of the states that offer the credits, where are those jobs going? California?

Consider this...
If tax credit in places like Louisana and Georgia are used to hire California residents, then, in effect, those tax are providing jobs for Californians. And, according to TurboTax, residents of California must pay tax on out-of-state earnings.**

If we take this reasoning a dubious step further, we can ironically claim that tax credits from places Like Louisiana, Michigan, or Georgia actually produce jobs for Californians. Of course those jobs require travel. However, if Malanga is correct that film jobs are inherently mobile, then the investment to keep California film jobs in California is fundamentally at odds with the nature of the business.

Perhaps we should give other states more credit for doing a lot to keep the California film industry vital and let them make the heavy investments.

* City Journal is a publication of the Manhattan Institute.
** Apparently, out-state-taxes paid on out-state-earnings are deductible. Don't take our word for it.

September 7, 2017

First look: permit data for unincorporated communities in LA County

LA County Districts
(click to see larger map)
If you should happen to be a regular reader here, you may recall that the County Supervisors asked the County's Film Liaison to make some recommendations.

That was a bit of a puzzle. Who knew the County had a Film Liaison? What did this Film Liaison do? The office wasn't listed. Googling was useless. But, with help from our local County Field Deputy, the Supervisor Barger's Planning and Public Works Deputy, and a few other hard working County officials, we were able to reach Gary Smith, LA County's newly appointed1 Film Liaison.

Among other things2, Mr. Smith manages FilmLA's contract and receives quarterly reports on filming for the unincorporated communities of LA County. We asked Mr. Smith if the quarterly reports for the past 3 years were publicly available. Mr. Smith, like his County colleagues, has been extremely helpful. He sent along a composite report with frequency and complaint data for each Supervisor's District. The report includes data for each quarter from January 2014 through January 2017. (a link to the report appears below)

We used this quarterly-report data to put together a few charts that show filming activity for the unincorporated areas of the County. If you should happen to be a person who prefers data as a basis for fact, perhaps the following will be of interest.

Q: How much filming occurs in the unincorporated communities compared to other areas of LA County?
On average 12% of the filming permitted by Film LA occurs in the unincorporated areas of the County. The estimate does not include filming in places like Burbank, Glendale and Pasadena which do not use the FilmLA permitting service.

Q: How much filming occurs in LA County District 5 (Altadena's District)?
On average, 60% of all shoot days in the unincorporated areas occurs in District 5.

Approximately 2 million people live in the unincorporated communities in LA County. Approximately 400,000 people live in the 70 or so unincorporated communities of District 5. Altadena is the largest unincorporated community in the District with approximately 44,000 residents.

The Film Liaison's report does not include enough information to determine what percentage of the District's filming occurs in Altadena zip codes. However, using AltadenaFilming's film permit map data, we can estimate that 29% of District 5 filming occurs in Altadena.

Q: How many filming complaints were recorded from each of the unincorporated communities.
Between 2014 and 2107, FilmLA recorded 293 complaints from the unincorporated areas of LA County. Nearly 71% of the complaints concerned filming activities in District 5.

Note: Last year NBC4 reported that, in 2015, there were over 2,900 filming complaints just in the City of Los Angeles — a rate much high than that reported in the unincorporated areas. The disparity suggests that either complaints are under reported in the unincoporated areas or that film companies are, in general, better behaved when they leave the city limits.

Q: What is the most frequent complaint about filming?
Problematic film-company parking was the most frequent complaint in all unincorporated areas. 38% of District 5 complaints were classified as 'parking.'

Q: What about the rate of complaints? Are they higher in District 5?
With the exception of 2016, the rate, as complaints per 100 shoot days, for District 5 is in line with other districts. However, it appears the complaint rates for District 1 and 2 shot up in 2016.
The big picture
Overall, filming in the unincorporated areas plays only a minor part in LA County's overall film-production picture. However, a large majority of the filming in the unincorporated communities takes place in District 5.

Since the Film Liaison only provided data for the unincorporated communities, we'll conjecture that LA County's jurisdiction for film permitting approval and enforcement is limited to just these unincorporated areas. If true, District 5 is the District most affected by the County's filming permit approval and enforcement policies. In that case, Supervisor Barger should rightly have considerable sway in any Board decisions concerning film permitting and permit enforcement.

Data notes
  • The report only includes data for the unincorporated communities of LA County. The data does not include results from incorporated communities like Monrovia, Pasadena, Burbank, etc.

  • The Film Liaison's report included a summary of frequency and complaint data for each quarter in each district from Q1 2014 through Q1 2017. The report also includes a County-wide summary of frequency and complaint data.

  • The contents of the report were extracted to text and modified for export to excel.

  • Starting in 2015, FilmLA began reporting frequency as Shoot Days. Prior to 2015, FilmLA reported frequency as as both Permitted Production Days and Shoot Days. Here's FilmLA's definition of the difference.
    A Permitted Production Day (PPD) is defined as one crew’s permission to film at a single defined location during all or part of any given 24‐hour period. This measure is best used to quantify days of impact from filming on area communities. Determining PPD involves looking at all calendar days in which filming occurs, and summing the number of unique locations filmmakers were permitted to use on each day.

    Shoot Day (SD) is defined as one crew’s permission to film at one or more defined locations during all or part of any given 24‐hour period. This measure is used to quantify how many days of work film crews perform during a given time period. Determining SD involves looking at all calendar days during which filming occurs, and summing the number of unique permits simultaneously active for filming on each day.

    In order to normalize 2014 frequency data with the 2015 and 2106 data, we used FilmLA's 2010-2014 data to calculate a Production Day to Shoot Day ratio. The ratio is roughly two-thirds. We used that ratio to estimate 2014 Shoot Days. It appears that this techniques underestimates the actual values.

  • The quarterly report data has errors. The County-wide summary is inconsistent with the data from the individual districts. In our reports we used the data for individual districts and ignored the County-wide data since it is likely that the inconsistency is the result of arithmetic errors.

  • FilmLA issues quarterly press releases on shoot-day data for all the incorporated and unincorporated areas they serve. These FilmLA press releases were used as a source of data for the county-wide comparisons.

  • An estimate of annual shoot days in Altadena was based on data that was accidentally released by FilmLA — the same data is used to generate the Altadena permit map that appears on this site.

    The Altadena estimate is based on the following: between 2012 and 2015, there was a yearly average of 478 filming permits issued in Altadena. If we assume a day-and-a half of shooting for each permit, that's an average of about 717 shoot days per year. Based on the Film Liaison's report, there are roughly 2,500 shoot days each year in District 5. If these estimates are accurate, then roughly 29% of District 5 filming occurs in Altadena.
Links to source material
Here are links to the data provided by the County's Film Liaison:

1 : The County's Film Liaison was recently moved to a new organizational home. Previously, the office was located in the CEO's Office of Unincorporated Area Services. It is now located in the CEO's Economic Development Affordable Housing Division.

2 : The LA County CEO recently publish a memo describing the Film Liaison's responsibilites.

August 4, 2017

CEO responds to Filming Committee Report: Effective remedy? Bland reassurance?

Back in the old school days, we would explain away any inexplicable coincidence with a standard refrain:
24 hours in a day. 24 beers in a case. Coincidence? I think not.
(The last phrase was always recited in unison.)
If you happen to be interested in the County's management of filming, consider this intriguing coincidence:
On May 2nd the County Supervisors instructed LA County Counsel "to review... and provide recommended ammendments to the County Code, as, to ensure...enforcement authority to address violations of the film permitting process..."

By pure chance, on June 20th, the Altadena Filming Committee submitted its End of Year Report. The report included recommendations that addressed issues and concerns about filming raised by Altadenans.
Here was an a rare opportunity for the Town Council to influence the formulation of new County Codes — after all, we are just forty thousand in a County of ten million. On June 21st, the Council voted to send the Filming Committee's report to Supervisor Barger. Barger then forwarded that report to the County CEO with the request that they review the report and provide their own inputs.

On July 5th, The County CEO sent a response to the Town Council. AltadenaFilming has obtained a copy of that letter thanks to the generous cooperation of the County's Film Liaison.*

In a nutshell, the CEO's letter said that the County will "take into consideration the Altadena Town Council Filming Committee's recommendations" and then provided "additional input" to be used in the amendment process.

Here is that 'input' excerpted directly from the CEO's letter:
  • The following is considered when evaluating a permit:
    1. Location, duration and frequency of filming at the hosting property, including historical use
    2. Location, duration and frequency of activity near the requested location, including parking areas
    3. Proximity of concurrent filming activities and other activities such as street maintenance
    4. Production company size, number of filming days requested and proposed activities, including parking
    5. Any other criteria that may be relevant to the specific situation
  • Generally, the CHP or the Sheriff are required for any filming in the Altadena area for safety and/or filming related activity, including parking.
  • FiImLA currently maintains notes regarding specific community issues, concerns or complaints related to such issues as generator placement and parking restrictions at specific locations.
  • FiImLA has a review process in place for frequently used properties. Properties of concern a re currently flagged in FiImLA's On-Line Permitting System (OPS) and requests to film at these locations require additional review and discussion with a FiImLA Operations Manager (OM). The OM will direct the FiImLA Coordinator to contact affected stakeholders to discuss the filming request, and determine next steps in addressing concerns or potential issues.
  • The County requires that a Community Filming Survey be done for film permit requests that film more than five consecutive days in a row or outside of the normal filming hours. The radius to be surveyed is established by FiImLA based on the location, filming activity, and parking requirements. It is the responsibility of the Production Company to conduct the survey and return the responses back to FiImLA with enough time for FiImLA to evaluate the survey package and make permit adjustments as necessary. FiImLA can arrange review of Community Film Surveys at their office.
  • Riders are issued for minor changes to a film permit. Riders are not used to authorize late night or all-night shoots.
The list corresponds to the current practices often described in public meetings by FilmLA and other County representatives. If taken at face value, these practices might just be sufficient to remedy all the issues raised in the Filming Committee's End of Year Report. If that were true, why bother amending the County Code?

But, are these current practices really effective?

Last year NBC4 reported that, in 2015, FilmLA received nearly 3,000 complaints about filming. And, at the Altadena Town Hall on Filming this past Spring, over a hundred community members turned out to raise concerns.

If current practices were effective, why so many issues and concerns?

The CEO's list may provide a clue. The items on the list are heavy on discretion and light of the specifics that determine permit content and approval. For example: They use different criteria, like filming frequency to evaluate a permit application, but how are those criteria used? How frequent is too frequent? Is the evaluation arbitrary? They say that a law officer is generally required on a shoot? What are the grounds for an exception? In those exceptional cases, who ensures filming conditions are met? They point out that community surveys are required, but does the methodology warrant a reliable result? They say they maintain notes about community issues, but what end do they serve? If these notes are part of the decision process, who ensures these notes are accurate?

Without constraining specifics, the film permitting process is open ended, and the CEO's 'additional input' amounts to little more that a recital of bland reassurances — essentially an appeal to trust the status quo.

How could we tell? Is the current practice, as described in the CEO's list, effective practice or bland reassurance? More importantly, how could a conscientious staff attorney in the County Counsel's office tell?

Getting a few facts would go a long way towards getting things right. If AltadenaFilming found itself in the difficult position of formulating fair-minded amendments to the County Code, here's a few things we would want to know about the "additional input":
  • Are the specifics described in governing documents? If not, why not?
  • Are these requirements on the permitting process or are just informal guidance?
  • If these are requirements, how does the County currently ensure all the listed activities are performed?
  • How does the County currently determine if current practice is effective?
  • How does the County currently determine if issues like those documented in the End of Year Report are the result of insufficient enforcement tools?
There's a point to those questions: You cannot enforce a rule if you don't know what it is. You cannot improve a rule unless unless you know its intent. And, you cannot know if a rule meets its intended purpose unless you assess its effectiveness.

No telling what pressures might be pressing of the County Counsel. Perhaps they will have the independence to examine the underlying film permitting process as part of their effort to amend the County code. If they do, we hope they make those discoveries publicly available — it would be a significant first step towards making the film permitting process more transparent.

* The County's Film Liasion manages the FilmLA contract. Among other duties, they are responsible for conducting annual performance reviews of FilmLA. The Office of the County Film Liaison has recently been moved from the County's CEO office of Office of Unincorporated Area Services to the Office of Economic Development Affordable Housing Division.

June 11, 2017

Championing tax credits

There is so much data. The internet is awash with it. If only it weren't so confusing. Numbers can support any point of view. After all, data are just measurements; their meaning comes from context. I remember an aphorism an cynical ex-colleague frequently repeated:

"Politicians use statistics like drunkards use lampposts: not for illumination, but for support.*

The adage may be ill tempered, but in this era of spun and stilted claims, confidence in the numbers depends on knowing what underlying cause the authors are looking to support.

For example, take a look at three recently published research reports from FilmLA.
  • On January 17th, Filmla reported a "surge in Feature film production...making 2016 the strongest year for Feature production in L.A. since California introduced its film incentive program." According to FilmLA's president, Paul Audley, "the incentive is working as intended in bringing exciting new projects to the area.”
  • On April 12th, FilmLA reported there had been a 36% drop in feature film production from the same period last year. The headline was alarming, but Audley acknowledged the data might be an outlier. (In fact a simple trend analysis would substantiate his observation. See the charts at the bottom of this posting.)

    Despite Audley's caveat,the report caused a stir. The story recieved wide coverage in the papers and on radio. The County Supervisors took action — they passed a motion to "reverse the tide of runaway filming by... [taking] a proactive role in retaining and growing [the] industry..."

    However the news is not all grim. The report added that "incentivized projects" brought numerous shoot Days to LA in the several production categories.
  • On May 23, FilmLA reported that, in 2016, California had dropped to a lowly 4th place in the principal photography of feature films behind Georgia, the UK and Canada. Not co-incidentally, Georgia spent almost twice as much (+$300M) on its incentive program as California spent. The UK and Canada each outspent California by $100M.
FilmLA shouldn't be faulted for producing reports that substantiate the effectiveness of tax credits. They are acting in their self-interest. The County set up FilmLA as a 'no cost' service; it is almost entirely dependent on its revenues from the fees it collects from on-location filming permits. And since tax credits to film production companies have made California a more attractive location and boosted the number of filming permits issued, to report otherwise would mean doing themselves a disservice.

What on earth could be wrong with hyping the benefits tax credits? Aren't they bringing jobs? Maybe it is not so simple. Consider the following:
  • According to reports in the LATimes and the Daily News, there is a shortage of sound stages. There is no place to shoot. Existing stages are rented to capacity. Bringing in new productions exacerbates the problem. Building new sound-stages is challenging: construction is hampered by the cost of real estate and a "complex approval process."
  • In the May 23rd report, FilmLA identified 12 feature films that did principal photography in California for a total budget value of the $991M. 5 of those 12 features were animated. Those 5 animated accounted for 78% of the total budget. This lopsided distribution would suggest that incentives to animated films should get priority to live action films. However, the resulting increase would not show up in the on-location, shoot-day data. An alternative measure is needed.
  • According to the May 23rd report, California appears to be getting way more more bang for its incentive buck than Georgia, the UK or Canada. Total TV and film spending in California topped $30B while the combined totals for film spending in Georgia, the UK and Canada totaled just $7.5 billion. The data suggests that increasing California's tax incentives might not do much to increase film spending in the state. Nonetheless, there is market pressure to increase the tax credit allocation. According to Joseph Henchman, VP of the Legal and State Projects for the Tax Foundation, film companies are lobbying states for the best tax breaks. (He made the claim on KPCC's Air Talk (click here to listen to the radio interview [go to 10:00].) This competitive bidding in incentives has lead to an escalation in the film industry's demands for support. The tactic resembles the threats NFL owners have used to get local governments to fund new stadiums.
If the goal of tax credits is to bring productions to California, then there must be sufficient film production infrastructure. If the goal is to convince film companies to spend their production dollars in California, the incentives should fund those films that spend the most. If the goal is to obtain a high rate of return on California's tax-credit investment, the state should avoid the tax incentive bidding contest.

If those are the goals for the tax credit program, it doesn't make much sense to measure success in shoot days. On the other hand, if the goal is use tax credits to fund FilmLA, then measuring success in shoot days makes perfect sense.

AF alternative analysis  
Seven year trend (2010-2017) for 1st Quarter shoot-day data
data accumulated from FilmLA  reports

The 7-year trend for Q1 on-location shoot days for features and TV is very positive. The projection for feature shoot days in Q1 2018 is just 10% off the 2016's record results. TV dramas, TV Comedies and Web TV all show strong upward trends. The TV pilots are flat. If anything we should be worried about about Reality TV.

During the 7-year survey period, the vast majority of on-location shoot days were TV and a category FilmLA calls "other."  (your guess is as good as ours.)  Within the TV category, Dramas and Reality TV were responsible for the most shoot days.

While the total number of on-location shoot days has increased in all categories, features are contributing much smaller percentage to the total suggesting a smaller rate of growth than other production categories.

* Wikipedia attributes the quote to Hans Kuhn. Kuhn once did a stint at Cal Tech.

March 30, 2017

Altadena confidential: Tinsel Town Meets Christmas Tree Lane

By Michele Zack
Reprinted with permission of Altadena Heritage.
The article first appeared in the Fall/Winter 2016 issue of the Altadena Heritage Newsletter

The theme of our fall/winter newsletter has been controversial for 100 years: the effects of Hollywood and filming in Altadena. Some digging provides historical perspective on the industry that helped expand California’s economy into the largest in the U.S. and sixth largest in the world, even as it can strain neighbor relations and baffle many who simply want to know what the rules governing location shoots are, and if and when they are enforced.

A New Regional Industry

This Altadena Victorian cottage was turned into  a winter
wonderland for a U.S. Postal Service shoot.
Photo by Russ Fega.
Altadena’s relationship to Hollywood and filming began after the turn of the 20th century, when the new industry moved here from New York because of our weather. Lighting technology was not yet well developed, and shooting outdoors yielded the best results. The first film theater in the country opened in Los Angeles in 1902, and Altadena, along with neighboring Sierra Madre, got into the game early. Director D.W. Griffith shot The Gold Seekers, The Twisted Trail, and Fighting Blood (with Lionel Barrymore) in Sierra Madre in 1909 and 1910. Altadena and the Mount Lowe Railroad were featured in Mack Sennett’s 1912 comedy What the Doctor Ordered starring Mabel Normand, who in the following decade retreated from scandal to our community.

Altadena’s documented claims on early Hollywood glamour, however, seem to have had more to do with millionaires, social connections, and alcohol than as a filming location. Films were shot here — but since most were not directed by lionized filmmakers such as Griffith (who went on to direct Birth of a Nation, which was first acclaimed, and later condemned for its racism and glorification of the Klu Klux Klan), not much paper trail exists.

Our community was viewed as a “district” of Pasadena best known for wealth, mansions, hotels, and tourism. In 1919, Paramount Pictures’ Cecile B. De Mille opened an airfield — his third — on leased land adjacent to the Country Club (established in 1911, often called the Pasadena Golf Club) on Mariposa Street — in partnership with Pasadena’s Board of Trade and the Linnard Hotel chain. The movie mogul grasped the synergy between the sexy new civil aviation industry and his own, and established the Mercury Aviation Company to profit from it. This company offered the country’s first scheduled flights, and built DeMille Fields #1 and #2 in Hollywood and Beverly Hills. Stunt flying was heavily featured in early films, and our local airfield and Country Club hosted aviators, actors, and assorted hangers-on.

Actress Gloria Swanson in 
Don’t Change Your Husband, (1919)
On the festive opening day of DeMille Field #3, also known as the Pasadena Airfield, movie star Gloria Swanson, of Keystone Cops fame, arrived in one of three Curtiss Jennies, drawing more attention from the Los Angeles Times than city officials and hotel executives as she extricated herself from the tiny aircraft. “Fliers and Filmites” were more exciting and captured all the headlines. Swanson was under a new contract to Paramount, where DeMille quickly transformed her from comedienne to romantic lead. It is unknown whether her paramour, Altadena’s millionaire flyboy and businessman “Craney” Gartz, had influenced the selection of the new field’s location. Fifty years later, what Swanson remembered chiefly about Craney was that he “kissed as well as he danced, or better.”

Prohibition, Filmites, and Real Estate

People poured into booming Prohibition-era Southern California, and Altadena was among its fastest-growing communities. Airfield #3 lasted only until 1921, when the value of its 30 acres soared. Pasadena’s Board of Trade lost its lease, and tony new homes on some of Altadena’s last open land proliferated around the Country Club.

As a private club in unincorporated Los Angeles County, this facility escaped Pasadena’s primness and strict alcohol-law enforcement. Perhaps that prompted Italian immigrant Joseph Marcell Annechini in 1923 to re-imagine his downtown Los Angeles watering hole as a remote Altadena “Country Inn” with gardens and private rooms at top of Lincoln Avenue. There, land was affordable and the heat was off. His film industry clientele happily followed the searchlight beacon mounted atop the Marcell Inn to Annechini’s new speakeasy, and Hollywood gossip columns through the 1930s are peppered with references to it as a place actors such as Buster Crabbe and Frances Ford, famed studio executives, and racetrack gamblers entertained — even after some were caught in a 1924 federal raid that yielded 300 arrests.

Industry types were gravitating to Altadena, and one, David Haney, planned in 1923 to develop a “film colony” and studio here for his production company, “The Popular Players.” The plan was defeated by the Altadena Citizens’ Association, whose spokesman W.S. Grassle said: “We do not want motion-picture people in the neighborhood . . . We have had enough of that sort of thing from the Hollywood Companies . . . They bring noise, confusion, and an undesirable class of people with them. We have no liking for film actors in Altadena.”

It was too late. For better and for worse, Hollywood had discovered Altadena. The Los Angeles Times of the 1920s and 30s is full of reports of “filmites” such as May Marsh, “looking blooming as a rose. . . coming into town from her Altadena home” long enough to sign a contract to star in a series of films. Screen actress Barbara La Marr, known as the “too beautiful girl,” died at her Boston Street home in 1926 — and lay in state for several days to accommodate grieving fans.

Tinseltown scandal also scampered up our slopes: the 1922 shooting death of director William Desmond Taylor was linked (perhaps erroneously) to his plan to testify against girlfriend Mabel Normand’s cocaine dealer. Normand, the last person known to see Taylor alive, disappeared after his murder to “her bungalow at 1101 Foothill Boulevard” (now Altadena Drive). While never charged, she was nonetheless tarnished by the incident; her parents rushed from New York to nurse “the winsome comedienne’s” nerves that had barely recovered when, in 1924, millionaire oil broker Courtland Dines was shot with Normand’s pistol. Apparently, the driver did it.

Hollywood’s early boisterousness calmed toward the end of the Depression and through World War II — at least in terms of newsworthy references to Altadena. Undoubtedly, filming in Altadena continued to grow as the industry expanded.

But until 1982, only cities — not Los Angeles County — considered regulating filming or keeping data on it! At the end of that year, the Board of Supervisors finally proposed “Strict Curbs on TV, Movie Filming in Unincorporated Areas,” according to the Los Angeles Times. An Altadena home “used for filming five times in six months” was cited by the county planner responsible for the zoning ordinance requiring production companies to obtain permits from a new “filming coordination office.” Limiting shooting days to 10 a year per property (with extensions possible), and requiring that production companies pay the costs of sheriff and fire department services were parts of the ordinance passed January, 1983.

Modern Times

Since then, Los Angeles County has revoked and revised, rethought and redelegated enforcement of filming policies in its unincorporated areas many times.

Because problems and confusion about permitting persists, the Altadena Town Council recently established a subcommittee led by Ann Chomyn to gather and disseminate information about filming. Most Altadenans appear to value filming’s contributions to our local and regional economy, yet want reasonable limitations that enforce rules and stop the overuse of a small number of properties.

Jeff Bridges photographed on the porch of
Altadena’s Woodbury House during 2010 remake of True Grit.
Laws such as one allowing 14 tax-free shooting days a year, and the outsourcing of film permits and enforcement to FilmLA, a private non-profit funded entirely through film permit sales, are part of a dynamic environment. Our region, which as recently as 2004 hosted more than 60 percent of Hollywood’s location shoots, has seen these outsourced to cheaper places offering greater incentives — so that today fewer than half are filmed locally.

In 2014, the Milken Institute reported that California had lost 16,000 production jobs over the previous eight years — most to New York, which grants film tax credits four times higher than those allowed here. Other states and Canada also offer greater incentives.

Filming in Altadena Today

Sharon Northrup, who handles filming for Mountain View Cemetery and Mausoleum (established in 1881, it is Altadena’s oldest continuously operating business) says community filming relations “all come down to communication, very careful scheduling, and good production companies. The people we work with are great.” Crews film about 10 days a month there (more than anywhere else in Altadena). This supplements Mountain View’s regular income and helps maintain its 62 acres, while allowing for capital projects such as resurfacing roads. The Mausoleum lot is also used as “Base Camp” for other productions in Altadena, so that actors and employees can park there and be shuttled to shooting locations.

“Because we have room for parking, we don’t disturb neighbors much,” she says. “We also schedule filming to not interfere with services or funerals. If conflicts arise — say, people we hadn’t planned on turn up to visit — the production company knows it has to stop until we say go.”

Mountain View’s traditional business remains its core, but Northrup says filming is crucial to its financial health. “But you never know when filming might go away. It was down (after the 2008 recession) but seems to be coming back.” She added “Local restaurants get lots of business; we work with the same companies, and their crews all know about Fair Oaks Burger, Pizza of Venice, El Patron, and others. . . Fair Oaks Burger even got a little shoot of its own.”

Filming at Zorthian Ranch, another Altadena institution, has helped Alan Zorthian keep his head above water in maintaining that 45-acre piece of open space.

“We’ve done quite a few music videos: Sean Lennon, One Direction, etc., fashion shoots, and one TV Show, Aquarius, with David Duchovny playing a detective in the 1960s dealing with a Manson-esque sort of cult,” he says. “Most of the people we work with are responsible, and they really like shooting up here. They know they have to behave or they might not get to come back,” he said.

2010 episode of CSI: Miami
Photo by Tom Davis

The Future of Filming

But it would be better for regional prosperity and good neighbor relations if the rules were more understandable. The County has to respond to changing circumstances, but reinventing the wheel every 10 years without much transparency has forced some residents to press for clarity. Particularly in “problem” locations and blocks, designating a number of shoot days allowed each property, as in the past, and possibly cap total days permitted on the block, would benefit everyone. In the long run (we hope Hollywood continues its long run, and includes us!) clear, fair rules equitably enforced are the best way to spread the magic, and the wealth, of Hollywood to Altadena.

January 3, 2017

Altadena's contribution to Los Angeles County's film jobs


Ask most any booster of filming why filming is good, there a good chance they will say "jobs." You can't argue with 'jobs'. Just like 'world peace', jobs are good.

Why bring this up? I'm afraid the reason isn't good. It's because U-dub got drubbed and I could not keep my mind on the game. When I started pacing about the house and my wife asked if I needed a job. So naturally, I returned to the game. But then I had jobs on my mind. After a few more minutes of boring football, I switched over to TCM which was then showing the The Day the Earth Stood Still. I got there just in time to hear Patricia Neal render Gorp harmless with those immortal words, "Klaatu barada nikto."

That's when it hit me. Because of a FilmLA slipup I might have enough information to estimate the number of jobs that are the direct result of filming in Altadena. All I needed was some economic data about County jobs. In less time than it took for Clemson to smash Ohio State, I had googled up a report with the just the right stuff.

I'm sure you will agree, this is alarming. I ought to have been thinking about a tropical vacation, or a hike in the Sierras or even reading one of my new books. Instead I grabbed a yellow pad and a sharp pencil and began to work up the following estimates. Here's the result:

2012 Report of the Entertainment Biz in LA County sponsored Hollywood Chamber of Commerce
In 2012 the Hollywood Chamber of Commerce commissioned a report on the film business in Los Angeles County. The report, The Entertainment Industry and the Los Angeles County Economy, was prepared by the Los Angeles County Economic Development Corporation (LADEC) using 2011 data. The document was written to amp up the state's support for the film industry in the form of tax credits and industry advocacy. It was a lucky find and perfect for this purpose.

Here's a few data points from the report:
2016 LA County jobs have increased 25% since2011.
Film Production has kept pace.
source: Economic Update for LA County
    2011 Jobs (details below):
  • Jobs in LA County: ~3.3 million
  • All film-related jobs in LA County: ~250,000 (8%)
  • Film production jobs in LA County: 205,000 (6%)
    2011 earnings (details below):
  • LA County total: $558B
  • Average salary for production related occupations: $96,000
  • Production-related total: $11B
    2016 update (see adjacent):
  • Increase in LA County jobs since 2011: 30%
  • Increase in film jobs (includes freelance): 28%
  • Film jobs have kept pace with the economy.

As an aside...
The LADEC Update for LA County projects that the number of film jobs will continue to grow at about the current rate. That's about 20,000 new jobs over the next five years.

Estimate of Altadena's contribution to filming jobs
So how many filming jobs are there in Altadena? Not surprisingly, I didn't find any ready-made estimates. However, given the available data for LA County, coming up with an estimated seemed straight forward.

Here's the idea: We know the ratio of jobs and the number of production days in LA County. And, we know the average number of permits issued to Altadena locations (2012-2015). If we make a couple of assumptions about work days per Altadena permit, we can use the LA County ratio to estimate the the number of jobs and overall wages generated by filming in Altadena.

This estimation method does not work1,2

Nice idea, but no cigar. So happens that method doesn't work. Here's why: on average, roughly 2% of FilmLA's permits are issued to Altadena locations. If 2% of the film jobs were the result of filming in Altadena, there would be nearly 4,000 people working on film crews in Altadena everyday. That's roughly the working population of JPL. If that were the case we'd see 40 to 50 large shoots here every day. Aside from all else, this method makes no allowance for the significant portion of the workforce employed on sound stages and studios around the county.

I struck on plan B: an estimate can be derived just using the FilmLA permit data.3 I did just that. But since the FilmLA does not include dates, a lot of educated guesswork was required. Guess work aside, the results seem reasonable.

Here's what turned up:
  • 1435 permits issued to Altadena locations between July 2012 and December 2015
  • An estimate of 164,283 on-location workdays are associated with film permits issued to Altadena locations between 2012 and 2015
  • 632 full-time equivalent on-location jobs are associated with film permits issued to Altadena locations between 2012 and 2015
  • On average 181 full-time equivalent on-location jobs are associated with film permits issued to Altadena locations each year
  • On average on-location film jobs represent 0.07% of the county film jobs

That's a lot of 'what ifs', but if the numbers are roughly accurate, filming in Altadena probably annually generates the equivalent number of jobs as a Whole Foods store, but, of course, with much better wages.

If you're curious about the this estimation process, here's a link to a document that describes the details, warts and all.

On a final note...
Altadena's population is 40,000 or roughly 0.4% of LA County's population of roughly 10 million. Based strictly on population, Altadena supports nearly 3 times the filming as might be expected if filming was evenly distributed across the County. We must live in a nice place. Which only underscores the point that there are better things to do here than watching a dull playoff game .

1. This total includes only permits issued by FilmLA. Filming permits issued by Burbank, Glendale, Santa Clarita, and other county municipalities are not include. Consequently Altadena estimate is likely to be on the high side.
2. FilmLA reported 45,484 permitted production days (PPDs) in 2011. A slight increase of 4% that which has a very minimal impact on the ratio of PPDs in Altadena to the County as a whole.
3. We have often requested a more complete data set, but FilmLA says they don't have the resources to generate one. (see Sokoloski (4-25-16))

December 19, 2016

Altadena Heritage Newsletter features local filming

The Fall/Winter issue of the Altadena Heritage Newsletter includes a focus on filming in Altadena. The issue includes articles about the history of filming going back to the days of Cecil B. DeMille, a local charity supported by filming, the origins of, the Town Council's new Altadena Filming Committee and the recollections of local resident who has successfully hosted film shoots for over 20 years.
Click here to see the Fall issue of the Altadena Heritage newsletter

If you are interested in filming in Altadena, check out this Fall/Winter issue.

November 5, 2016

Could location filming help the homeless?

Google street view near Union Station (March 2015)
Last week I took the Gold Line to Union Station.  I was meeting a friend for lunch. Along the way, I passed hundreds of homeless people. It was heartbreaking.

We talked about it over lunch. He works in politics and sits in a few back rooms.

"Money would help these people a lot," he said. "There's a billion dollar housing bond on the ballot, and the Sups talked about taxing pot. Someone suggested the slogan, 'get high — help the homeless,' and that bonged the pot tax.   Too bad.  Could have been over $100 million.  Now they want to put a quarter-cent sales tax on the Spring ballot. Probably won't pass."

The conversation then drifted to the usual political shenanigans of the day, but the gears started turning.  A few days later, I got this whacky idea. Could the film rental tax loophole be tapped to help the homeless?

By definition the film rental loophole only applies to the rental of personal residences.  So, by the same definition, it's not anyone's job — it's additional income. Businesses would not be affected. Unlike the pot tax,  it would not encourage addiction and,  unlike a sales tax, a film rental levy is not a regressive tax.  Best yet, the whole enterprise could be folded into the existing work done by the Franchise Tax Board.  Administrative costs would be minimal.

OK... but would a film rental tax be generate enough to deserve serious consideration?

I wasted no time building a spreadsheet (old habits die hard).   Here's what I found:
  • There may be as many as 50,000 on-location shoot days in LA County each year.
  • There may be about 30,000 film rental days in LA County each year that fall under the film rental tax loophole.
  • There may be as much as $200 million in film rentals every year in LA County that fall under the rental tax loophole. 
  • A levy on film rentals at private residences in LA County might generation $10-$20 million in annual tax revenues for the homeless.
  • A 5-year program might generate $50-100M tax revenues to support efforts to help the homeless.
Those numbers were derived from the FilmLA quarterly reports, and FilmLA's Altadena permit data.  The details of the estimation steps appear below.

These numbers might not be worth the paper towel used to clean up after the cat. But the real data exists and a real estimate does not require magic.  Without a heroic effort, a legislative analyst could acquire actual detailed permit data from FilmLA (which they are contractually obligated to supply to the County on request) and the other county film permitting offices. They could also obtain average rental rates from expense reports of production companies or filings made under the tax credit program. That's all that's needed.

If the real numbers happened to look good, I've got a slogan. "Host a film the homeless."

References are provided at the bottom of the table

The slogan may stink, but helping the homeless doesn't

May 10, 2016

A better approach


You have a fancy new sports car. You take it out on the road. Drives like a dream. You step on it. The other cars appear to move in slow motion. The road becomes a slalom and you weave in and out gracefully. Then you hear it. The siren. The flashing blue lights in the review view. You over pull over, grab your wallet and roll down your window.

"May I see your license please," says the officer. You produce your license. He examines it.

"Is something wrong officer?"

"You were speeding, weaving in and out. Driving recklessly. That can cause an accident," he says.

"No worries," you reply with relief. "I have a high-performance car and it's perfectly safe."

"If you say so," says the officer. He hands back your license. "In the future do consider driving slower with a bit more courtesy to the other drivers."

"Thanks officer," you say. "I'll keep that in mind."

Life is good.

Or imagine this...

It's Fall. Property taxes are due. They want a big chunk of change. Didn't you pay taxes just last year? What you really need is a breather. Ten mellow days in Ensenada should do it. You skip the taxes and take the trip.

It's Spring. A letter arrives from the LA County Tax Collector. They want you to call. After a 20 minutes of the soothing tones of Pachelbel, a representative picks up.

"How may I help you today?"

"I'm calling about a letter," you say.

"I'm sorry for the inconvenience," says the representative. "We send a tax notice to every property owner in the County." You recite your Assessor Information Number. There's a lengthy silence. "Sorry for the wait. Our computers are slow, " he says. The moments pass. "OK," he says, "I see here that you did not pay the taxes for the last year."

"Yes. That's right. We decided to go on vacation instead of paying our taxes," you say.

"I understand," says the representative. "In the future, I hope you'll bear us in mind. The County's critical services like the Sheriff Department and the Fire Department depend on your taxes."

"Next year I'll keep that in mind," you say.

"We appreciate that," replies the representative.

Life is good.

Paul Audley, President FilmLA
Link to NBC4 video report (04:00 - 04:17)
Link to the NBC4 full story with map (zoom out)
Preposterous? That's what I thought until I saw a recent report of NBC4 that included an interview with Paul Audley, President of FilmLA.

The NBC4 report covered concerns that some residents of Encino are having about frequent filming and parking problems that frequent filming create. This despite language in the LA City zoning plan which states "property in all zones may be used for infrequent filming."

Here's a snipet from the NBC4 report:

NBC4 Reporter: "Exactly what does infrequent mean...none of us seem to know."

Mr. Audley: "Infrequent means different things in different parts of the city. We don't wait until it's a crisis. We try to intervene earlier and ask the homeowner who's doing the filming to take longer breaks between or to cease filming for a period of time to allow the neighborhood to rest."
I find this reassuring. So what if only Mr. Audley knows what "infrequent" means, clearly he does. And it's gratifying to know that crises have been avoided by simply asking the hosting homeowner if it's OK to cease filming. After all, that places the film permitting authority right where it belongs — in the home where the filming will occur. Someone should tell the folks in in Encino. They could probably use some reassurance.

Do you see the underlying brilliance to this approach? What if FilmLA's approach to enforcement of "infrequent filming" became the model for all County services. We could simply rely on ourselves and our fellow citizens to adhere and enforce our government's regulations. No longer will there be a need for all those expensive enforcement services. Do we really need people handing out speeding tickets and collecting taxes? And, who needs a filming permit service? Heck, we'll just take a break and cease filming when we need to.

Life would be good.

What if all county services were run like FilmLA?

April 20, 2016

Self-sufficient regulation: Who's the real customer?

When I moved in LA as a hungry freelancer, a gallon of gas was 65-cents and a stamp was 15 cents. If you worked with a crew of less than 20, it didn't really matter much if you had a filming permit. The risk was low; unless you got unlucky and caught the attention of a curious cop. It was the wild west. No one interferred.

Bigger shoots were different; you were sure to get attention. You needed a union crew, a cop and a permit. So you called Acme Permits Inc for the permit and the cop. For a couple hundred bucks, Acme arranged all the particulars. Even dropped your permit off at the production office. Life was good.

In those days, filming on-location was just becoming the norm. Film crews in the neighborhood were still a novelty. Neighbors were curious and friendly. You could shoot at all hours. There were plenty of twenties to hand around. And, when it came to lawnmowers or chainsaws, the union men or the cops would be all business. How times have changed. At least in LA.

In 1990 the LA County Supervisors passed an ordinance that instituted the "Film permit Coordination Office" (Chapter 2.118. Ord. 90-0093 § 3, 1990). The ordinance established a government service with the mandate to issue filming permits and collect fees. FilmLA's predecessor, Entertainment Industry Development Corporation, was founded as a non-profit and obtained the contract to provide the service.*

Under the Ordinance sub-heading, "Office to be self-supporting—Cost-recovery fee schedule", the Ordinance set an "administration fee" of $315 with a formula for increasing the permit fees based on the CPI. Currently the fee is $635 which is more or less in line with the past 26 years of inflation. (According to the Bureau of Labor Statistics, prices have gone up about 82% since 1990.)

Regulation without cost? For a nominal amount, the industry was going to pay for it's own regulation. It wouldn't cost the taxpayer a nickel. What could be better?

But, take a close look and you might see a couple flies in the ointment.

For one thing, the price of FilmLA's basic permit application is about the most expensive around. Check out the table below. Aside from Sierra Madre and Pasadena, an application for a filming permit in Altadena is the most expensive in the area. More expensive than San Marino, New York City, or San Francisco. It's nearly twice the cost of pro-film communities like Santa Clarita and Burbank. And Riverside is free! (Think mattress sale.) These prices make for a sharp contrast with pro-film Louisiana and Georgia. I know that if I was still in the film biz, I'd just assume skip the hassle and expense.

Film Permit fees
Film Permit Office
Application fee: $625
Atlanta, GA
Application fee: $100
Application fee: $272.95 (1st day)
$81.89 ea additional day
Application fee: $187 + 300/day
Application fee: $350/ 7 days
Application fee: $325
La Canada
Application fee: $100 + Film: $100
Los Angeles
Application fee: $625
Application fee: $0 (no fees)

Application fee: $500
Historic preservation: 75
New York, NY
Application fee: $300
Application fee: $716.96 per day
Parking signs: $1ea
Application fee: $500
Application fee: Free
San Dimas
Application fee: $347
San Francisco
Application fee: $200-300
San Marino
Application fee: $500
Santa Clarita
Application fee: $363
Sierra Madre
Small:$1034 1st day; $775 additional day
Large: $1701 1st day; $1,362 additional day
PLUS other charges
Note: these figures do not include all the extras that can easily double or more the cost of a permit.

If you should happen to also be thinking that the relatively high cost of a filming permit might be a disincentive to companies who might be interested in filming in Altadena, then consider this: the California Film and Television Tax Credit Program 2.0 gives film companies an added 5% bonus in tax credits if they take their business out of the "LA zone." If you just consider fees and taxes, Altadena may not be such a great place to shoot. I digress.

Why then is a FilmLA permit comparatively expensive? My hunch is that other governments with cheaper fees subsidize the cost of permit coordination. In other words, the business of issuing film permits is at least partly paid for by the taxpayers.

Is that a bad thing? Isn't "self-supporting" inherently good? The question suggests there's something else in the ointment of a self-supporting regulation.

Consider this: FilmLA has $10M in annual expenses, nearly 100 employees and a $300K per year CEO. That's a LOT of permits at $635 a pop. Let's try a conservative estimate. Let's say that FilmLA is able double the permit tab (by including charges for a Monitor and a few extras) so that the average permit fee for a film shoot comes to around $1,200. To make that mark, FilmLA must print around 8,300 permits per year or about a 150 per week. Mind you FilmLA provides permits for LA County, LA City, Monrovia and a few spots in Orange county so the volume might be there. But no matter, that's a lot of permits to crank through just to make their nut.

Here's the rub: If you think of a customer as someone who pays you money for a service, then FilmLA's customers are the film companies. Not the County. Not the neighborhoods. The film companies.

Sure there's a stipulation in the County Ordiance to "avoid or mitigate adverse effects or incompatibility between such short such short-term land uses activities and the surrounding area where these temporary activities are proposed," but without 30 film companies knocking on FilmLA's door every day, FilmLA goes bust.

All of that leads me to think that if FilmLA seems more protective of the film industry than our neighbors, it makes perfect sense. After all, who's the real customer?

* In 2005, the name was changed its name to FilmLA shortly after its President was found guilty of misdemeanor forgery.