The Michigan Film Industry

by MaryH 5. May 2009 02:20

In April 2008, the Michigan state legislature passed the Michigan Film Production Credit incentive program. This credit is designed to attract filmmakers to Michigan who will spend money, provide jobs, and grow related industries. Similar incentive programs exist in Louisiana, New Mexico, and New York, but Governor Granholm considers Michigan’s to be the most generous. The incentive program offers a 40% rebate on filming expenses anywhere in Michigan and 42% if the film is shot in one of Michigan’s core communities.

Since the inception of the program filmmakers and entrepreneurs have taken notice. Filmmakers and actors such as Clint Eastwood, Drew Barrymore, Hilary Swank, and Rosie O’Donnell have flocked to Michigan for their projects. Entrepreneurs have plans to turn Michigan into more than a filming locale with full service studios, animation studios, and more. The most high profile project is a $146 million studio in Allen Park in a former Visteon building. Unity Studios Inc. will occupy 104 acres and 750,000 square feet and could create many local jobs. The Michigan Economic Growth Authority (MEGA) granted Unity Studios a $2.8 million tax credit over 12 years. Wonderstruck Studios L.L.C. was also granted a 12 year $16.9 million tax credit by MEGA and an $11.7 million infrastructure credit through Michigan’s Film Production program. Wonderstruck Studios is considering the former M.G.M. Grand Casino building as the site of an animation and graphics studio. Wonderstruck Studios anticipates creating 413 direct and 287 indirect jobs.

There is considerable debate over the economic impact the budding film industry is having on the state given the large rebate filmmakers receive through filming in Michigan. A recent study by Michigan State University (MSU) found evidence for considerable economic growth as a result of the program. After nine months of the program, film productions spent nearly $70 million. The same study also anticipates revenue expanding 187 percent from 2008 to 2012. A report by the Michigan Film Office found that the state paid out nearly $49 million in the same period. The Mackinac Policy Center (MPC) has criticized the MSU and Michigan Film Office reports for painting too rosy a picture of the Michigan Film Industry and for not providing sufficient (and they say, legally required information) about the true impact of the Production Credit on Michigan’s economy. Other critics of the program say that the program is too expensive and needs to be reformed by expanding the infrastructure credit, requiring employees to be 90% Michigan residents, and capping the production credit at $50 million. For now, the Film Production Credit is intact and will continue to attract more film productions as Hollywood discovers scenic and diverse Michigan.

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About the Authors

We are the Center for Urban Studies Economic Development Unit.  We have several authors who contribute directly and indirectly to this blog.

Lyke Thompson, Ph.D.

Director of the Center for Urban Studies and Professor in Wayne State University's Political Science Department, has specialized his research on the urban political and economic environment.  A primary focus has been centered on municipal economic development, urban policy, and the determinants of economic growth.

Eric Stokan, MA.

Research assistant at the Center for Urban Studies Economic Development Unit.  Mr. Stokan serves as the lead researcher of the Unit, analyzing economic data using various statistical techniques.  Mr. Stokan is interested in questions concerning municipal economic growth and industry mix as well as determinants of local economic incentive adoption.

Mary Hennessey

Research technician at the Center for Urban Studies Economic Development Unit.  Ms. Hennessey researches the effectiveness of local economic development incentives.  Specifically, she has conducted a thorough investigation of brownfields and is currently working on public transit.