The Revitalist

Much has been made recently of the film-production tax credit arms race going on in this country. Film location decisions for the most part are not sentimental; they're bottom-line decisions, driven by costs of labor, transportation, etc. According to Glenn Rifkin of the New York Times, almost every state has a tax incentive program designed to attract the film industry, and these are getting more and more lucrative as competition heats up: In New York City, filming enjoys a 35% benefit, and even California, despite its Hollywood home-court advantage, is looking at a larger incentive program. Massachusetts raised its tax credit to 25% last year, and has seen a remarkable increase in filming in the state.

If it's all a money game, critics say, the escalation in subsidies may be stripping out all of the benefits of attracting movie business. Not so in Massachusetts. Steady film business helps sustain the creative economy jobs that are so critical to the vitality of metro Boston and the State overall. But it is outside of metro Boston that other benefits of the film tax credits are more obvious. This summer, several movies are being filmed in the Merrimack Valley. Film companies appreciate the lower costs there, and their patronage of local businesses, restaurants, hotels, etc. is a huge economic benefit to the communities.

Towns like Lowell, Haverhill, and Lawrence, with their gritty urban settings and grand historic industrial architecture, offer great sites for filming -- local resources that the tax credit helps the cities leverage. The movies and TV shows bring to town not just money, but also a chance for the towns to market themselves. Just last week, AHF licensed with Disney to film part of a new futuristic action movie outside Washington Mills Building #1, our new loft apartment building in Lawrence. The movie is filming at a number of other nearby sites as well.  It can’t hurt the Merrimack Valley to have A-list actors like Bruce Willis and Rob Lowe spending time there.


In Massachusetts, film credits are supporting good jobs and bringing film business to the state’s industrial towns that can benefit from it. Everyone wins with the mutual benefits to both the community and filmmaker.

Today is a quiet day at AHF – most of us are at the NH&RA Fall Forum. If you don't know about the National Housing and Rehabilitation Association, they are a great resource for those of us in the preservation, development and housing business. Their content is geared towards development professionals and can be heavy duty on tax and finance issues. But, by the time you've heard the session on tax credit structuring or how to combine HTC and NMTC three or four times, it really starts to sink in.

The Globe reports on the veto override that saved in the increase in the historic rehab tax credit program. It's a nice bit of publicity for the cause, if a little light on details.

After waiting on pins and needles all day, we have just received word that the House of Representatives has overridden Gov. Romney's veto of the increase in the Historic Rehabiltation Tax Credit program. Scuttlebutt says that the Senate is sure to follow, perhaps tonight or tomorrow. 

Over the weekend Gov. Romney vetoed portions of the Economic Stimulus bill, including the $50m increase in the state historic rehab tax credit. The veto was part of a $225m exercising of the line item veto in this election year (insert your favorite political gripe here). In his official letter, the Gov says, "This provision [the increase in the cap] will cost the Commonwealth up to $44 million annually and is not tied to job creation or promoting technology industries." Now, I'm not an expert with the job creation numbers associated with the tax credits, but it seems to me that this statement misses the point. The tax credit is just as much about economic stimulus as is its much more popular cousin, the brownfields tax credit, which was also in the Econ. Stim. package and was not vetoed. There is no doubt that WM Lofts and the Morehouse Bakery Building project will bring new jobs to Lawrence: construction, building management, new commercial businesses and, in the case of Morehouse, job training. WM Lofts will bring new residents, eventually new homeowners, who will bring their spending power to Essex Street. We have no doubt that these projects will bring new life to this neighborhood of downtown Lawrence, which will spur new business activity and increased tax revenue for the city and state. This is most certainly economic stimulus work, and we are counting on the Legislature to override the veto.

The House and Senate have voted to approve the $700+ million economic stimulus package. The bill has been languishing in conference committee for months, while the health care bill took center stage. The bill will now go to the Governor's desk for signing.

We are excited about this because the legislation raises the cap on the State Historic Rehabilitation Tax Credit from $10m/year (which wasn't enough to fund all the projects who were eligible) to $50m/year. In addition, we understand the legislation makes the increase retroactive to 2005, meaning that there is a big pot of money available - enough to fully fund all the applications in the pipeline. Going into the future, there will hopefully be enough to provide for future projects to receive the full amount that they are eligible for. This is big news for the redevelopment community!

Now we are waiting with bated breath for the Governor to sign the bill and then for Secretary of State Galvin to make the allocations. A lot of good work will be done.