you may not know Lynda Obst’s face or name, but if you pay taxes in Massachusetts you are an investor in the producer’s latest movie, with the working title This Side of the Truth. Obst decided to film the comedy starring Jennifer Garner and Ricky Gervais in Lowell last spring largely because of a 2007 Massachusetts law that gives filmmakers a tax credit worth 25 cents for nearly every dollar they spend here. (See “Subsidizing the Stars,” CW, Spring ’08.) It’s a law that enjoys strong political support even as its economic benefits have been hard to quantify. Obst sat down with me in Hollywood to give an insider’s view of the Massachusetts law and how it is working.
When I arrive a little early for our conversation, the security guard at the main gate of CBS Studios looks confused. “Nobody is early in Los Angeles,” he explains.
“I’m from out of town,” I say.
He looks my rented Ford sedan up and down. “Yes, I see.”
Then he waves me into an office park that feels more like a village, with winding lanes named after TV shows, split-level bungalows housing the offices, and signs pointing the way to the nearest Starbucks stand. I find Obst’s beige bungalow just in time for our appointment, but she (perhaps aware of the guard’s expectations) is 20 minutes late. A pixie-sized figure dressed all in black, she bursts into the bungalow out of a sudden rainstorm and ushers me into an interior office that feels like a cross between an Urban Outfitters display window and a college lounge. Cushiony armchairs fill the airy room’s center. The walls are covered with posters from past Obst productions like The Fisher King, Sleepless in Seattle, and How to Lose a Guy in Ten Days.
After three decades in the industry, Obst is at once fiercely energetic and weary-of-the-world, waxing enthusiastic about movies and the beauty of Lowell while punctuating every remark with a dry joke about Hollywood, or Massachusetts, or herself. A native New Yorker who studied philosophy at Columbia University, Obst worked as an editor for the New York Times Magazine before jumping into the movie business in 1979. Even as she’s become one of Hollywood’s more prolific producers, she’s kept a hand in the writing world. A frequent contributor to the Huffington Post, the LA Times Book Review, and New York magazine, she is also the author of a Hollywood memoir titled Hello, He Lied.
When Obst describes her experience in Massachusetts making This Side of the Truth, a Warner Bros. film due out in 2010, she is both effusive and evasive. She insists that the film tax credit is great for the state’s economy, even as she refuses to say how much she spent here. (Her preferred term is tax “rebate,” though it’s a more complicated process than getting money back after buying a toaster.) She says she loved filming in the Bay State even though she couldn’t find enough trained crew members because 12 other productions were also filming here last year.
Obst thinks Massachusetts should invest in training more residents to become film crew members, but she acknowledged that the Commonwealth could easily build up an infrastructure here only to have the eye of Hollywood swing to other states (or countries) with better incentives. That’s pretty much what happened to Canada, she says — and that’s what could happen everywhere if California starts providing generous tax credits to keep its home-grown industry at home. Exactly a week after my meeting with Obst in February, California’s legislature did authorize a film tax credit, although it caps total annual payouts at $100 million.
Without knowing how much Obst spent on This Side of the Truth, it’s difficult to gauge the price tag for Bay State taxpayers. But here are some rough numbers. Obst calls This Side of the Truth an “inexpensive” project, which she defines as a movie that costs between $10 million and $30 million to make. A 25 percent credit, then, puts taxpayers on the hook for between $2.5 million and $7.5 million, or a bit less, since not all expenses may qualify. Producers can sell their tax credits back to the state at 90 cents on the dollar or they can sell them to a third party. Either way, it’s cash in the producer’s pocket.
The economic return on the tax credits extended to Obst’s movie is threefold: a three-month-long job for approximately 60 Massachusetts residents; another 140 people, most from California, working and paying taxes locally while patronizing the hotels and restaurants of Lowell for three months; and the ongoing, hard-to-quantify boost to tourism that can come from having a movie filmed in a given place.
Overall, the Massachusetts Department of Revenue estimates that nearly $130 million in film tax credits will be given out in fiscal 2009, about the same amount issued in 2006, 2007, and 2008 combined. It’s a business that sounds like the perfect investment: Producers parachute into your state, hire locals, spend a lot of money, and then leave without demanding services like public schools. But Obst describes a business that is also very fickle. It will go where money is being given away but vanish afterward, bring out-of-staters to claim many of its jobs, and sometimes lose interest in a location because it doesn’t have enough variety.
Gov. Deval Patrick, who promoted the film tax credit, is now pushing to give taxpayers more information on how it is working. In an outside section to his FY 2010 budget, the governor proposed making public the amount each tax-credit recipient receives from the state, the number of people they hired, and the average salary of those employees. The proposed change does not require filmmakers to report how many of those jobs go to local residents.
As of now, Obst and her financial backer, Media Rights Capital (MRC), have no obligation to share business information with anyone other than the Department of Revenue, which treats it as confidential. And they have no intention to share the information voluntarily.
“They are a private company, and they keep their finances private,” said MRC spokeswoman Susie Arons, who said she didn’t know whether a disclosure requirement would affect her company’s willingness to back movies in Massachusetts. Obst says she loved filming in Massachusetts, but stresses that the numbers have to add up.
COMMONWEALTH: You’ve been in this business for almost three decades, and in the last few years, there’s been an explosion of incentives luring producers to different states. How has that changed the way you make movies?
OBST: Well, it’s just incalculable how much the business has changed. The studios have a liquidity problem, but of course, so have the banks. The job of a producer is to find the most economical way of making pictures, because pictures have become astronomically expensive to make and to market. The only consistently good news in the motion picture business is that people keep going to movies, no matter what dire prognostications get made about DVD entertainment systems, Xboxes, Wiis, young boys only playing video games. No matter what trends seem to come and go in popular culture, Americans, and an international audience, go to American movies. It’s our greatest export. That’s the good news. The bad news is that it’s become hideously expensive to make them.
CW: How come?
OBST: There are two forms of rising costs. There’s the increasing cost of stars, and we’re dependent on them to make people aware of our movies when there’s a glut of movies. There’s the rising cost of production, because the very big movies that tend to dominate the box office cost a lot in terms of production costs and special effects and razzle-dazzle. So what we look for is: How do we lower those costs and make it viable to make motion pictures? If we have a piece of material that talent is dying to do, we can lower actor costs. If we can make it attractive to states to have us make pictures in specific locations, we get tax incentives.
CW: When did you become aware of states competing to get Hollywood’s business?
OBST: It feels like between five and eight years ago, and it happened with a vengeance all of a sudden. It was a panacea that productions started running to. Before that, we were being pushed to Canada because the Canadian dollar saved us money. Canada was really a viable place for us for 15 years, and they opened huge facilities. Then suddenly, there was a migration to Louisiana [the first state to offer a film tax credit, in 2002] and onward to other states.
CW: Are the financial incentives the biggest piece of the puzzle when you’re choosing your location?
OBST: Duh. There’s my one-word answer. Yes, they are.
CW: You just filmed This Side of the Truth with Ricky Gervais and Jennifer Garner in Massachusetts. How did you pick Lowell?
OBST: There were three states in the east that could be considered from an economical point of view: Massachusetts, Connecticut, and Rhode Island. So we did budgets for all three, factoring in all the costs and the likely rebates. Massachusetts came out the best.
CW: And why Lowell?
Ricky Gervais in “This
Side of the Truth.”
OBST: It’s gorgeous. [Laughs.] Haven’t you noticed? People in Massachusetts look at me like I’m insane when I say Lowell’s gorgeous. They think all these posh towns like Andover are gorgeous. And yes, they do have their charms, the posh towns. But we weren’t looking for a posh town. We were looking for a town that was a stand-in for industrial and post-industrial America. So we sent a scout all over Massachusetts, and Ricky [Gervais] and Matt [Robinson], the directors, picked Lowell based on the pictures. They just jumped on it. There never was a second competing town.
CW: There were 13 major motion productions shot in Massachusetts in 2008, compared with one in 2005. How does having a lot of other films in a given place affect your location decision?
OBST: As a producer, that worried me a great deal. I was loath to go to Massachusetts for that reason. I was really concerned about not being able to get good crew, and about how much crew we’d have to bring in and how much that would offset the rebate. The answer was: The rebate was good enough to offset the amount of crew we had to bring in.
CW: How much of your crew did you hire locally?
OBST: I need to check on those figures. [Her assistant later says it was less than a third.] If the rebates are going to remain in Massachusetts, there’s a tremendous amount of job creation to be done.
CW: So, in some cases, you couldn’t hire locally when you wanted to?
OBST: Yes, because there were a ridiculous number of movies. Almost nobody has that crew depth. LA has it, but nobody else does, except maybe New York. There are props needed, and an art department needed, and drivers in particular. There aren’t enough grip and electric. You need locations people, who know how to find empty office spaces to film in and what the best bars are.
CW: How did you handle the lack of experienced crew?
OBST: We hired people who had never worked on a movie before, and trained them. We hired drivers who had worked for UPS. And art people hired friends and trained them. Did it work? Not always. That’s why we had to bring some strong people in from out of town.
CW: So, let’s say we pump a lot of money into job training and infrastructure. What happens if other states start topping our tax package?
OBST: Well, you have a smart governor. He [raised] the rebates there, but you have to be able to sustain them. The worst thing that happens is if you create an infrastructure and then the rebates go away. That’s everybody’s fear, which is sort of what happened in Canada. But it didn’t happen for 15 years. A lot of people made a lot of money before the volume of pictures went away.
CW: That gets us to Plymouth Rock Studios, a full-scale production studio slated to open in 2010 in Plymouth. Would you have done more of the post-production in Massachusetts if the studio had been completed?
OBST: Well, my director happened to live in England. He, Ricky Gervais, is a big star, and he wanted to go home. But if there’s not an extraneous situation like that, and if you’re rebating the post-production costs, then of course, we’d do it there.
CW: How many jobs does a movie like This Side of the Truth create, and how long do they last?
OBST: We hired about 200 people, not counting actors. And then we’re in a town, in a hotel, for three months. So you fill a hotel that had basically empty for three months, and every single restaurant has a crew eating at one or another for three months, and those local dry cleaners…. It’s wonderful for a recession.
CW: Lots of industries spend money. What’s special about film that Massachusetts should give 25 cents back for every dollar spent by a film company? Or that Michigan should give 40 cents back?
OBST: It’s a business that opens and closes constantly. So every time I start a movie, I hire a few hundred people.
CW: How long does the employment last?
OBST: Well, we employ them for the length of the movie. But then they wrap, and they go on to another movie. [Film shoots] are a constant employer. Basically, you’re in a start-up business all the time. You go to a town and you live off it — well, not off it, but you live there for three to six months. You’re there for a month of prep, and three months of shooting, and then a couple weeks of wrap. This movie wasn’t expensive, so we were there for three months.
CW: What’s an inexpensive movie?
OBST: Between $10 million and $30 million.
CW: How much did you spend in the state on This Side of the Truth?
OBST: I can’t say that.
CW: Can’t say or won’t?
OBST: We don’t do that. But if you add up that there were 13 productions in Massachusetts last year, that’s an unbelievable amount of money.
CW: Anytime there’s a budget crunch, as there is now, some people say: Look, Massachusetts is laying people off and cutting human services. How can we give cash to the film industry?
OBST: You’re not really giving them cash. You’re allowing them to amortize their cash. The industry is going crazy that Arnold [Schwarzenegger] hasn’t been able to do tax credits in California because the infrastructure is here. The pressure to do it here is unbelievable because people lay roots in this state in order to do what Massachusetts is in a position to do right now. People can’t afford to stay here right now. They all want to up and move to Massachusetts. [A week after this conversation, the California state Assembly passed a film tax credit, albeit one that most observers consider modest.]
CW: What will tax credits in California mean for Massachusetts if we’ve pumped all this money into job training and a studio?
OBST: There are still some movies that look better in the East than the West. We could not have shot This Side of the Truth in California, just look-wise. California has palm trees. It doesn’t look like industrial Americana.
CW: How would you suggest the state build up a crew base?
OBST: It’s apprenticeships. It’s weekend seminars where you bring out the best art directors, and have them do little seminars on being assistant art directors and being prop masters. I think people would hire graduates of a three-day seminar taught by a qualified prop master. Things like that are just enough to get you as third prop master. After you did one movie as third prop, you can become a second prop. You know?
CW: You’re making it sound like quite a democratic field, in the sense that you don’t need university degrees to get a job with a movie. True?
OBST: You don’t. You need experience. And people need to hire locals. It’s so much less expensive. Because we need crews so badly, longstanding traditions have been broken in order to make this work. It used to be impossible to get into these unions, and it isn’t anymore.
CW: Setting aside the issues of crew and financial incentives for a moment, how was filming in Massachusetts as far as other logistics, like working with town officials?
OBST: Fabulous. The permitting was really easy. There are smart people in Massachusetts. I’ve worked in small towns where the sheriff expects a kickback. In a town that will not be mentioned in Texas, there was a sheriff who gave every single one of my crew a $90 speeding ticket if they drove over 30 miles an hour on the way to the set because we wouldn’t hire him for security. When we hired him for security, then we could drive as fast as we wanted. I’ve seen corruption as clear-cut as that, and I’ve seen clean as a whistle, which was Massachusetts. The only issue we had was trying to film a gambling scene. There were all these very complicated gambling laws to ship things from Las Vegas to Massachusetts. We went by the book, but it was down to the wire to get everything there on time. Everybody was so unbelievably efficient in the district attorney’s office. Oh, and needless to say, these were all disabled slot machines.
CW: Do you think people want movies in their states for the money or to be able to see Ricky Gervais and Jennifer Garner walking down the street?
OBST: Small towns like the latter, and big towns are smart. It’s fun the first time you have a movie. After a couple of movies, it’s still fun, but it’s a little more of a pain in the butt that traffic gets slowed down at times. And I think cities become smarter about why they’re doing it. They’re doing it because they need the money in town, and they drive smart bargains.
CW: Did people in Lowell drive smart bargains?
OBST: Some of them drove unbelievably tough deals to the point where we had to make other deals. It’s not like any of them were naïve. But by and large, we had a bit of a love-fest.
CW: In a summary of your book Hello, He Lied, a reviewer says it paints “Hollywood as a place where people play by rules discernible only to those on the inside.” What happens when you take Hollywood’s way of doing business and plop it down in Massachusetts?
OBST: I don’t think we were all that “Hollywood” in Lowell. When we were in Lowell, Ricky and Matt played Nerf balls with the cast. It was kind of like a big dormitory. I have a chapter in my book called “When on Location, Always on Vacation.” Location is very different than filming in Hollywood. That’s why I prefer to be on location, kind of, all my life.
CW: When you set up on location, do people take on the culture of the place they are in?
OBST: They love the town they’re in, and take “set” culture to the town they’re in. There was a T-shirt everyone took to wearing that read, THERE’S A LOT TO LIKE ABOUT LOWELL. At the beginning, there was sort of a “Oh, there aren’t enough places to eat” attitude, but by the end, everyone had their favorite Lowell restaurant. Ricky had his favorite Boston restaurants for dinner, and then he cooked. And I stayed in Boston and rented a house, because I’m a city girl. I rented a beautiful apartment in the South End. And I ate like a pig.
CW: Will you come back and do another movie?
OBST: I loved it there. And I think everybody had a really good experience. Really, the only issue was this crew shortage. For me, Massachusetts used to be known as the place where you make a movie about the Red Sox or Harvard, or if you’re an Affleck brother. But now, it’s a place where you can make a movie about anything.
CW: Because of the tax credit?
OBST: No, because it’s becoming a film capital. It’s shown its versatility.
CW: So a state can become a film capital within three years of offering a tax credit?
OBST: Yeah. Look how it’s worked. Louisiana tried to do it, but everything looked like Louisiana, so people weren’t really happy with it. New Orleans is not a city that was able to stand in for other cities. But Massachusetts can look like so many different places. I think that’s what makes the difference. Also, there’s a real technological base in Massachusetts, and that really helps us. We’ll see when this movie comes out, but Massachusetts seems to be able to look like a lot of places. And that’s what it requires to be a film place.
CW: So, if a lot of movies are made here…
OBST: Will it burn out? That remains to be seen.