Ken Seagren’s Denver-based Lighting Services Inc. has reduced staff from 12 to three employees.
By Ed Sealover – Reporter, Denver Business Journal an hour ago Lighting Services Inc. once operated a 60,000-square-foot film stage in Denver where the company’s 12 employees would work on television shows like “Perry Mason” as well as at least one national commercial per week. Owner Ken Seagren rented large generators that could power film sets, as well as trucks for hauling equipment throughout the state.
LSI now has three employees who work on its 20,000-square-foot stage in Littleton, crewing one major commercial every couple of months and hoping that a television show or movie might choose the state once a year. Seagren sold about $500,000 of rental equipment in recent years and one-fourth of what was once a 20-truck fleet. He refers to his 46-year-old business as “almost a hobby right now.”
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Lighting Services Inc. technician Ryan Apley sets up a light. KATHLEEN LAVINE, DENVER BUSINESS JOURNAL
Meanwhile, he can count 20 lighting technicians or other film professionals he knows personally who have moved in the past few years to Atlanta, where the state of Georgia has used incentives to grow a film industry that now has 75 sound stages operated by more than a dozen studios, employing tens of thousands of people. This comes as companies like Apple and Disney get into the content-creation field to support their new streaming channels.
“The demand is incredible. There are more productions going on now than has ever been in my lifetime. And in Colorado you’d never know it, because we’re the nothing state,” Seagren said. “The industry has become very incentivized around the country. And if you don’t have a film incentive in your state, you’re persona non grata. You don’t exist anymore ... And they’re not ever coming back to Colorado without an incentive.”
Eight years after approving a film incentive that it believed would jump-start its film sector, Colorado instead is seeing a sharp decline in the number of film, television and video game production projects occurring within its borders. And as that happens, the state is beginning to hemorrhage industry professionals and production houses, lessening the chances that future projects would consider the state for lack of actors, camera operators and other skilled tradespeople to be able to run any shoot that is held here.
While Colorado continues to offer the same 20% rebate on in-state spending for approved projects that it passed in 2012, it has cut the annual amount it allocates for those incentives from $5 million down to $750,000 in the 2017- 18 fiscal year and each year since. The Colorado Economic Development Commission transferred $1.25 million from its strategic fund to the Colorado Office of Film, Television and Media in October after the film office had spent through its annual allocation in just two months, but Gov. Jared Polis did not propose any boost in spending for the program in the 2019-20 budget plan he submitted on Nov. 1.
Both conservative Republicans and liberal Democrats have questioned whether the spending is a good use of taxpayer resources. And after a scathing audit in mid-2017 found the office gave money to ineligible projects and paid producers without proper paperwork in the incentive program's early years, several attempts to eliminate the program altogether nearly succeeded.
While the ideological debate about the need for such a program continues, there is no longer argument about whether it is achieving its aim of bolstering employment within the state; it is not. The resulting breakdown of the industry has lowered the sector’s spend in Colorado because of the incentive program from $60.4 million in the 12 months that ended in June 2015 to $7.4 million in the fiscal year that wrapped up in June, according to the University of Colorado-Boulder Leeds School of Business’ most recent Colorado Business Economic Outlook.
“Limited funds for Colorado’s incentive program puts the industry at risk as production companies continue to make location decisions based on the production budget’s bottom line,” the Leeds report stated.
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Two local actresses wait for their call during “Dear Eleanor” filming in Denver’s Paramount Theatre in the summer of 2013. KATHLEEN LAVINE | DENVER BUSINESS JOURNAL A-level professionals leaving Colorado was a hotbed of production for about 20 years after Seagren launched his company in 1974. Attracted by the diverse scenery and by the interest from professionals, there once were about 400 to 500 people working each week in the industry, shooting a couple of television shows continuously and two or three major films a year, he said. Films such as the original “True Grit,” “Butch Cassidy and the Sundance Kid” and “Indiana Jones and the Last Crusade” all were shot in part or in whole here.
But in the mid-to-late ‘90s, Canada began offering incentives to shoot films there, and a number of states soon followed with similar efforts. By the time Colorado got in the game in 2012, it was late to the party. But in the next few years, it attracted a few large productions — Academy-Award-nominated “The Hateful Eight” was shot in Colorado, as were parts of the blockbuster “Furious 7” — as well as smaller films like the Robert Redford-Jane Fonda romance “Our Souls at Night,” which employed some 50 local professionals during filming outside of Florence.
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Parts of the blockbuster “Furious 7” was shot in Colorado. SCOTT GARFIELD, UNIVERSAL PICTURES
Just about the time that Colorado began to cut back on its incentives, however, other states began to ramp up. New Mexico raised its incentive program from $50 million to $110 million last year. Montana raised its film budget from $750,000 to $10 million.
The benefits for some states that have jumped into the game have been major investment from the film industry. Netflix purchased a studio in Albuquerque and announced plans to spend $1 billion in production there in the next 10 years. Georgia, which authorized more than $850 million in tax credits in 2019, has grown from having one studio operating there in 2008 to hosting an industry with a $3 billion annual economic impact now.
And Georgia is where a lot of Colorado film professionals, such as Charmaine Calderon Balcerzak, now find themselves working. A multicultural hairstylist involved in designing looks for actors and actresses in films whose time periods go back several centuries, Balcerzak worked on a number of Colorado projects but began traveling to Georgia once or twice a month two years ago. She finds jobs in about 12 films per year there now, more than enough to earn a full-time living.
Balcerzak, who worked on “Our Souls at Night” in 2016, said she doesn't know a co-worker from that project who is employed solely in Colorado now. Some, like her, travel back and forth, boosting the economy of other states. Others have left the state altogether.
“We would get a movie maybe once a year and only a handful of commercials a year. I was just not surviving and no one was surviving in the industry here,” she said. “We are thriving now [in other states] because we are working on our craft that we love and we are making good money.”
Payton Dunham, an independent production manager and location scout who lives in the Denver area, spends more of his time in Oklahoma these days, which has an $8 million film-incentive budget. For the past two years, the only work he’s been able to find at home has been with small-budget movies that don’t pay much on their own.
Jeff Litchford, vice president of Westminster-based video-game creator Deck Nine Games, is feeling the hit after incentives earlier last decade helped him to win several contracts to make sophisticated games in which players make choices while exploring a mystery or weaving their way through a story. Deck Nine grew from six employees to more than 100 and nabbed contracts from major publishers. But he recently lost a contract that would have allowed him to hire 300 people to a company in Quebec, Canada, with far less experience but a bigger government backing. Litchford already is seeing many of the actors he’s hired for his motor-capture animation moving to other states for a steadier stream of work.
“One of my concerns is I’m starting to see the talent in the region leave, and that’s the talent I draw from,” he said.
Added Dunham, who also is worried about the exodus of A-level professionals: “If producers see C-level talent working even on commercials, they’re going to say, ‘Well, we’re not going to come back. Let’s just go shoot in Canada.’”
And with that exodus, companies are going away too.
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Producer Jim Janicek had to move the making of the Xfinity Latino Entertainment show to Miami. PROVIDED BY JIM JANICEK
WestWorks Studios, a part of the Comcast Tech Solutions facility in Centennial, was the state’s largest film-production facility until it shut its doors on Nov. 1, deciding to shift its from retail production of projects to distribution of content to Comcast-owned properties. Producer Jim Janicek had to move the making of the Xfinity Latino Entertainment show to Miami, costing local jobs, and he predicted that without studio options such at that which WestWorks offered, many companies likely would move other shows or not consider filming shows in Colorado.
On Jan. 30, Amanda Woodson sent a note to local film-industry professionals announcing that she had decided to close Colorado Extras Casting. While Woodson said in an email to Denver Business Journal that her business decision was more “a reflection of the times and changing industry,” she also said that a better incentive program might make Colorado more attractive in the competitive industry.
The bill that might save the industry
In response to all of this, film advocates are preparing to introduce a bill that they believe will give Colorado the tool it needs to be more competitive — transferable tax credits.
TTCs, which are used in other states, are credits based on a percentage of a qualified spend that a producer can use to offset tax liability or can take to a bank or private-equity firm to sell on the open market to a company with significant tax liability. In states like Georgia and California, such credits can fetch about 90 cents on the dollar and are attractive because of their portability and flexibility.
In Colorado, though, their bigger advantage could be that they do not have to be set aside and capped in the state budget every year.
A pair of Democrats — Rep. Leslie Herod of Denver and Sen. Nancy Todd of Aurora, who was a co-sponsor of the 2012 bill creating the spending-rebate program for the film office — are preparing to introduce a bill that would offer such credits. Todd said in an interview that the tax credits would be paid only in years in which state revenue exceeds the Taxpayer’s Bill of Rights cap, so as not to take from other priorities during times of budget-cutting.
While the film program isn’t an easy sell in the Legislature, Todd said she hopes to pitch both as an economic-development program and as a program for talent pipelines in education, to allow students with this kind of artistic bent to graduate from schools here and find work without having to take their talent and their spending to other states. “If we don’t continue to invigorate economically the film industry, I think we are very much at risk of losing that creative element who are already here and who can come here,” Todd said.
John Van Wyck — co-founder and executive director of the group Cine Fe, which is looking to bolster the film industry across the state — said in pushing for the bill, he hopes to show legislators that the film industry is not just benefiting a bunch of artsy types in Denver and Boulder but is a major boost to rural areas across the state that get an out-sized amount of business because of their scenic locations.
“We need to show the Legislature that film in Colorado does not have the face of Hollywood, it does not have the face of New York,” Van Wyck said. “It has our face on it.”
Balcerzak said she believes that many Coloradans in the industry who have decided to take jobs elsewhere to pay their bills would come home to work if state leaders would do something to create more activity here. But she said that action is required swiftly, before more content-producing companies settle into a handful of other states and decide that they don’t need to look beyond those boundaries for their locations.
“I just really feel it’s important that we do this now ... because other states are taking advantage of it,” she said. “And if we don’t, it’s going to be too late.”