Economic Development

A Film Star is Born

New Mexico reaps rewards from its Hollywood "give-aways"
by | September 2006

Not too long ago, Adam Sandler wound up in the New Mexico State Penitentiary in Las Cruces. That's where Paramount Pictures went on location to film the remake of "The Longest Yard."

Large studios as well as independent film companies have been lured to the state by a package of state loans and incentives plus key executive support for the film production industry. While several states are trying their hand at the same game, New Mexico's program has taken off since Bill Richardson became governor in 2003 and had his administration redesign the incentive package. An industry that had been bringing in $8 million per year to state coffers can now point to $700 million in economic impact in the past few years.

The new package started with the premise that a tax credit was not enough to lure companies. Along with a 25 percent refundable tax credit, the state now offers enticements such as subsidized workforce development for the production company, interest-free loans and free use of state land and facilities for location shoots, which can save tens of thousands of dollars for production companies. In return, the state negotiates for a cut of the adjusted gross profits of a project.

Another key offering is industry expertise in the governor's office. The director of the film office, Lisa Strout, used to work as a production manager and location manager, and the governor's legislative affairs director for Media Arts and Industries Development, Eric Witt, was in production finance. "It's been crucial," says Witt. "When productions come to us, they know we understand what their world is like." He believes that distinguishes New Mexico from other states trying to lure film production companies.


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