Film industry gets spotlight in L.A. City Council race
By By Maeve Reston
Nov 29, 2009 | 12:00 AM
In a campaign where jobs and unemployment have become a signature issue, the two candidates seeking to replace former Los Angeles City Councilwoman Wendy Greuel are fighting over who will do more to stem the exodus of Hollywood production.
With feature film production down 37% citywide compared to the same period last year, former Paramount Pictures Corp. executive Christine Essel and Assemblyman Paul Krekorian (D-Los Angeles) agree on one thing: City officials have waited far too long to address the issue.
But the two candidates, who are competing in the Dec. 8 runoff in the eastern San Fernando Valley, have sharply criticized each other's work on film issues as they vie to serve as the voice for the industry at City Hall.
Feature production in the Los Angeles area declined in 10 of the last 12 years, according to FilmL.A. Inc., which coordinates local film permits. And as more than 40 states offered lucrative tax incentives, California's share of studio feature film production dropped from 66% in 2003 to 34% in 2008, according to the California Film Commission. Meanwhile, the unemployment rate in Los Angeles stands at 14%.
Essel argues that 30 years of working her way up from a studio accounting clerk to a vice president at Paramount prepared her to champion efforts to make Los Angeles more film-friendly. But Krekorian, who authored the state's current law offering film and television tax incentives, has blamed Essel for the plunge in production during her time as chairwoman of the California Film Commission and has faulted her for encouraging other states to enhance their incentive programs while she was an executive at Paramount.
"My legislation is saving California film workers' jobs today, right now," said Krekorian, whose proposal was approved as part of an economic stimulus package in February. "She failed these workers for a decade, because it was in the corporate interests of her employer to take jobs away from California."
In a recent debate, Essel expressed amusement at Krekorian's implication that she had the power at Paramount to send films to other states. While leading the commission, she said, she spent nine years bringing film industry officials together to advocate for an incentive that Sacramento refused to pass.
"They finally passed an incentive when we had no films left shooting here," she said, adding that Krekorian's bill "was written by a lobbyist, and it is lopsided and it doesn't do the job."
Essel is not alone in that criticism. Some industry analysts have said the $500-million program, which will last five years, is too narrow to compete with more generous offers in other states. California's incentive offers a 20% to 25% tax credit for feature films with production budgets between $1 million and $75 million. New television series for basic cable and those that previously shot all prior seasons outside of California are also eligible. But the incentive is not available for a variety of other projects, including commercials.
So far 50 projects have been approved for the tax incentive program -- about half are independent films with budgets less than $10 million and 22% are studio features. Todd Lindgren, vice president of communications at FilmL.A.., said 16 of the projects have obtained permits to shoot in the Los Angeles area.
"The program was very limited," Lindgren said. "It's not the final solution to runaway production, but it is a good start."
Krekorian points to the incentive, however, as evidence of his "proven record of bringing good jobs back to Los Angeles." One campaign mailing quotes a news article stating that the incentive brought 6,000 jobs to the San Fernando Valley.
But Jack Kyser, an economist at the Los Angeles County Economic Development Corp., said the county has lost 7,000 entertainment industry jobs this year so far. Though some productions taking advantage of the tax credit began shooting in August, Kyser said he has yet to see growth in jobs.
"We were hoping for something in the September and October numbers, but nothing yet," he said.
Officials at the California Film Commission and FilmL.A. say it is too early to quantify the credit's effect on jobs.
Supporters of Krekorian such as Greg Lippe, chairman of the Valley Industry & Commerce Assn., describe passage of the incentive bill as evidence of Krekorian's effectiveness. Lippe praised Essel's work but added that "the one who actually wound up getting the legislation done was Paul."
For months, the assemblyman has sought to turn Essel's work as a government affairs executive at Paramount into a liability. He claimed in a campaign mailing that Essel "shipped our jobs to Canada for corporate profits" -- basing that claim, in part, on a report that Paramount invested $10 million to build soundstages and a production office in Vancouver.
But a Paramount spokeswoman said Essel did not have a role in business decisions about the company's operations in Canada.
Krekorian has also criticized Essel's efforts to persuade officials in Florida and Alaska to make their film incentives more attractive while she was serving on the California Film Commission. In her role as a Paramount executive, Essel told a Florida Film & Entertainment Advisory Council committee last year that the state's facilities, scenery and conditions made Florida "a go-to place" for studios. "We would just really encourage the incentive to be more competitive," she said, according to a recording of the teleconference posted on the group's website.
Essel noted that she is running for the council seat as a private individual.
"It's an outright lie for him to infer that I would be sending jobs out of the state, as if I had any control [over where productions were filmed] whatsoever at my studio," she said in a recent interview.
Sixteen of the studio locals of the International Alliance of Theatrical Stage Employees union have lined up behind Essel, as has the North Hollywood-based Teamsters Local 399, which represents about 5,000 casting directors, drivers and location managers.
Steve Dayan, a business agent for Teamsters Local 399 who serves with Krekorian and Essel on the California Film Commission, said the group's long working relationship with Essel and her intimate knowledge of the issues gave her the edge. But he described both candidates as "strong advocates" for the film industry.
"The city has always been supportive of filming, but I don't think they've really backed it up with anything," Dayan said. "So we're hoping now that something will change the perception among producers that L.A. is a difficult place to film."