Film and TV Production Make a New York Comeback. But Will the Tax Credits Roll?

When the pandemic shut down the city’s economy in March 2020, movie and TV production became one big closed set.

But in contrast to many other entertainment-related sectors — including restaurants, tourism and especially Broadway — big-and-small-screen show business is nearly back to pre-pandemic levels.

At Silvercup Studios in Long Island City, Queens, eight productions are at work, the maximum the studio can handle. It’s the same story in Steiner Studios in the Brooklyn Navy Yard, fully booked with six to eight productions in any given recent week.

And permits, which track shooting on the streets but not at the studios, have climbed to 75% of their 2019 level, held back only by a slowdown in film production.

“The industry has bounced back and it’s been so resilient,” said Doug Steiner, whose production facility at the Brooklyn Navy Yard is the city’s largest, at 780,000 square feet, and is home to the likes of “The Marvelous Mrs. Maisel” and “Gossip Girl.”

The rebound, he added, underscores “how critical the business is to New York’s future.” 

Still, this high-profile industry faces new challenges as states throughout the country ratchet up tax incentives to lure productions at a time New York’s program is less popular than it has been in years in some influential circles. Groups from the Citizens Budget Commission to the conservative Empire Center to the progressive Fiscal Policy Institute have railed against the tax break.

NYC’s Hollywood Story

In the 1990s, even television shows set in New York were often shot elsewhere, especially Toronto, because of high costs. The state enacted its first tax credit in 2004 to help counter the cost disadvantage. 

Much of the credit goes to Dick Wolf, who insisted the original “Law & Order” be shot in New York despite the studio’s demand he produce it in California. He is currently filming “Law & Order: Organized Crime” here.

A major expansion of studio space followed. The boom in scripted television shows, first on cable and now for streaming services, has played to New York’s strengths: The state is second only to the California talent pool and is brimming with writers, actors and directors who want to work close to home.

Even some shows set elsewhere, like “The Good Fight,” based in Chicago, are now shot in New York.

Nearly 80 television shows and 300 films were produced in the city in the 2019-2020 season, compared with 27 television shows in 2012-2013, according to the statistics from the Mayor’s Office of Media and Entertainment. The agency estimates that led to over 100,000 jobs, $3 billion in tax revenue and $60 billion in economic activity.

As reports of the coronavirus began to dominate the news in early March 2020, some productions began slowing, recalled Anne del Castillo, who heads the city’s media and entertainment agency.  

“I remember having many conversations with productions on where we stood and telling them, ‘We just need to get you some guidance, hold on,’” she added. “In two days, the city went from allowing 250 people on a set to none.” 

In June 2020, the state opened up production for crews of 10 or less — designed to primarily allow work on commercials to resume. The next month, the state signaled it would open up production completely, but virus cases were far too high in the city to allow that.

As COVID-19 infections declined, the city allowed productions to resume with a limit of 100 members of the cast and crew, targeting ad work and documentaries. 

The industry and unions agreed to extensive protocols — including extensive testing and banning transportation on buses — that raised production costs by 25%.  

The Return Takes Off

One of the first series shot under the new protocols was “The Flight Attendant.” The HBO comedy-drama with a boozing flight attendant at the center of an international plot used Kennedy Airport, Hudson Yards and other locales around the city. In January 2021, the city lifted the last restrictions on the industry.

In April, the latest month for which statistics were available, the city issued 728 permits for 188 projects, compared to 900 permits for 253 projects for the same month in 2019. 

Since many of those working on a set are employed as contractors, official job numbers reflect only part of the workforce. As of June, employment had bounced back to 46,300, 50% more than at the low point in May 2020. The record of 55,000 was set in early 2020, largely before the pandemic took hold.

Del Castillo notes that early 2020 was especially busy with the filming of both the recently released “In the Heights” and Steven Spielberg’s remake of “West Side Story,” which is expected to debut in December 

She also sees a silver lining to the turmoil of the last 18 months. 

“The already close communication that has been the norm for the city and the industry became even more so in light of the pandemic, both with the productions and communities,” she said.

Some big money is being wagered on the future of the industry. 

Brothers Alan and Stuart Suna sold Silvercup Studios in the midst of the pandemic for a reported $500 million to Hackman Capital Partners and Square Mile Capital. Famous for being home to “The Sopranos” and “Sex and the City,” the Queens facility now counts HBO’s “Succession” among its tenants.

“The outlook is very positive if you look at what streaming has done as a distributor of content,” said Alan Suna, who continues as chair of Silvercup.

Some Taxing Competition

While film and movie tax incentives are under constant attack from a wide range of groups around the country and in New York, states are bolstering their programs in bids to attract more work.  

More than a dozen states have increased tax breaks or are considering doing so, including Oklahoma, which tripled its tax credit. Georgia has built a thriving movie business with a lucrative 30% tax credit.

The biggest threat to New York likely comes from California. Last month, Gov. Gavin Newsom signed a bill providing $150 million in tax credits aimed at promoting the construction of new soundstages and $90 million a year for the next two years to lure TV shows from other states, as well as to subsidize shows that have already relocated.

“Let’s bring a core historical industry back to California,” the bill’s sponsor Sen. Anthony Portantino argued during the state Senate debate.

The money is in addition to the $330 million a year in tax credits California has been providing since 2015. The credits include a bonus for productions that hire a more diverse workforce.

Last year, New York State reduced the tax credit for productions in the city to 25% from 30%, and it is more stringent than others by excluding pay for actors and other highly paid talent. The state authorized continued spending of $420 million a year through 2025.

Given the sensitivity of the issue, industry leaders declined to discuss the tax break on the record. 

Also unwilling to comment was Sen. Michael Gianaris of Queens, the second-ranking Democrat state senator, who has been both a leading opponent of tax breaks for companies like Amazon and a supporter of the film tax credit, with Silvercup and other studios based in his district.

Still, some industry boosters say they’re seeing signs of a Hollywood ending for the city’s TV and film comeback.

“We were all stuck at home all the time and we all needed content,” said del Castillo. “Seeing these productions premiere was one of the bright spots of the recovery.”

This article was originally posted on Film and TV Production Make a New York Comeback. But Will the Tax Credits Roll?

Be the first to comment on "Film and TV Production Make a New York Comeback. But Will the Tax Credits Roll?"

Leave a comment

Your email address will not be published.


*