An L.A. city film commission makes sense

When the going gets tough, Americans go to the movies. We did it by the millions during the Depression, and the lingering economic crisis that began with the housing bubble’s burst (along with higher ticket prices) has inflated Hollywood’s current box-office revenues to dirigible dimensions.

James Cameron’s “Avatar,” for example, has sold more than $1 billion worth of tickets in less than a month -- and not just in the U.S. The environmentalist techno-epic is already Russia’s highest-grossing film ever with $55.5 million in receipts; it’s done $85.6 million worth of business in France, $56.1 million in Germany and nearly that much in Britain.

So why is the Los Angeles City Council weighing formation of a new civic commission to assist the movie and television industry? After all, 20th Century Fox, which is distributing “Avatar,” is hardly an economic basket case like, say, Citibank or AIG. In a period of painfully constrained resources, why give special attention to film rather than promoting, say, “green” manufacturing, biotech and video game production -- anything that promises to create new, middle-class jobs? (On a yearly basis, video games now generate more global revenue than all theater tickets combined.)

Actually, the city ought to do more to promote all those endeavors, but it can’t afford to neglect the looming crisis that’s been building for more than a decade in the film and TV industry. The studios, of course, always whine about their problems, and their legendary accounting methods continue to guarantee that -- on paper, at least -- virtually nothing they do makes money. For Los Angeles, however, the problem is not the industry’s distress but its success.

Hollywood is a business that generates not only profits but also cachet, which is why more than 40 states and Canadian provinces now offer tax credits and other financial incentives to filmmakers willing to shoot or do postproduction within their borders.

Partly as a result of those blandishments -- and partly as a result of the high cost and bureaucratic burden of doing any business in L.A. -- film production in California has declined in 10 of the last 12 years. In 2003, 66% of American films were produced in this state, most of them in Los Angeles; last year, it was 31%. Six years ago, 81% of the country’s television pilots were made here; in 2009, the figure was 57%.

According to Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., those declines cost the city 7,000 jobs last year. Even so, the industry employs 260,000 county residents, most of them in the city of L.A. Film, Kyser points out, also “undergirds other regional economic mainstays, like tourism and the hospitality industry.”

Business journalist Mark Lacter takes a decidedly contrarian view. He points to the huge number of soundstages and other production facilities that give L.A. a commanding position in filmmaking and generally trump other enticements.

“It is true that tax incentives have moved production elsewhere,” he wrote in an e-mail Monday, “but what’s seldom reported is the massive infrastructure in L.A. that can’t be matched in other locales. Also, the tax incentives are proving to be less lucrative for states than perhaps first believed. A local film commission might be a useful clearinghouse for pesky matters like government fees, location shooting, etc. But actual incentives -- both local and state -- are absurd.”

Lacter’s position essentially comes down to this: The real disincentives to film and TV production in L.A. are the high costs and regulatory inconvenience of doing business that afflict every other enterprise in the city. Remedy those, and don’t get caught up in the incentive/tax credit competition.

City Council President Eric Garcetti says we’ve become “too arrogant.” That’s why he and Councilman Richard Alarcon are pressing to re-

establish a film commission (an earlier incarnation collapsed in scandal a few years ago) with an adequate staff and a “high-powered president, like Sherry Lansing,” the former studio head. As Garcetti envisions things, that person would market L.A. to the industry, act as Hollywood’s advocate and troubleshooter at City Hall and be accountable for generating jobs and economic activity.

It’s something that needs to be done for all the reasons Kyser sets out, though Lacter’s shrewd cautions ought to be kept in mind.

The movies are Los Angeles’ great export to the world and the industry most responsible for making us a world-class city. L.A. without Hollywood may seem unthinkable -- but who would have thought the city that once gave America wings and sent it into space ever would lose its last major aerospace company, as we did Monday?

timothy.rutten@latimes.com