CHALLENGER, HAHN TUSSLE OVER $15 MILLION MOVIE-SUBSIDY PROPOSAL

The Daily News of Los Angeles

Challenger Antonio Villaraigosa picked up a key San Fernando Valley endorsement Thursday while Mayor James Hahn sought to woo the entertainment industry by proposing spending $15 million a year to entice filmmakers to stay in Los Angeles.

Assemblyman Keith Richman, the Granada Hills Republican who won the vote for mayor in the failed Valley cityhood drive, jumped aboard the Villaraigosa bandwagon, saying they agree on many issues such as the need for a regional airport system rather than expanding Los Angeles International airport.

“I’m a Republican, but I know Antonio Villaraigosa,” said Richman, former co-chairman of Bob Hertzberg’s primary campaign for mayor. “I know his record and what he has done for Los Angeles. As speaker of the Assembly and now as a council member, Antonio has always been able to build consensus to get things done.”

Hahn, running hard for re-election in the May 17 runoff after finishing 10 percentage points behind Villaraigosa in the primary, said the film subsidies would begin in January at the same time the first cuts in business taxes that heavily favor the industry kick in.

“This new incentive, combined with the unprecedented entertainment tax reforms I enacted, are making Los Angeles more financially attractive to film production – and that will attract jobs and dollars to our city,” Hahn said during a news conference in Hollywood,

“Other cities, other states and other countries are luring our film industry away with powerful financial incentives. I’m fighting back with incentives of our own to make an offer that will be hard for filmmakers to refuse.”

Hahn’s proposal was immediately criticized by Villaraigosa and others who questioned the timing and how the mayor could find enough money to hire 150 more cops and allocate it toward a highly profitable industry that’s already getting tax breaks.

“The real question raised by this press conference is why (Hahn) waited until the fourth year of his term to announce a plan to keep film production in Los Angeles,” Villaraigosa said.

“I believe we should explore every means possible to keep and preserve production here in Los Angeles. With a $300 million deficit and not enough cops on our streets, we have to weigh all of these factors in coming up with a plan to keep production here in Los Angeles.”

Councilman Martin Ludlow accused Hahn of playing politics in bringing up the proposal without discussion with the council.

“You don’t throw this out in the middle of a budget fight,” he said. “They haven’t done due diligence, there’s not the necessary consensus… Where is this money to come from?”

Studios and other entertainment-industry businesses are among the largest political donors in city elections, according to Ethics Commission records.

Doug Heller, executive director of the nonprofit Foundation for Taxpayer and Consumer Rights in Santa Monica, said there already are too many existing loopholes provided by the city to the entertainment industry.

“The use of taxpayer resources has to be prioritized for public health and safety… We have to have books in the classrooms and cops on the beat before we start giving handouts to international media corporations,” Heller said. “I know Hollywood is still part of Los Angeles, but we can’t make that a priority.”

Councilwoman Wendy Greuel, a former studio executive, said she wants to see how Hahn intends to “balance the need for more officers on the street with the need to keep production and production jobs in Los Angeles.”

Steve MacDonald, president of the Entertainment Industry Development Corp., said the city needs to compete with aggressive subsidy programs in other states, citing New York and Louisiana, with Arizona considering incentives.

Under Hahn’s plan, movie and television productions, including commercials, would be eligible for reimbursements for 5 percent of “below the line” costs of up to $12.5 million, for a maximum of $625,000 per production.

Yusef Robb, a campaign spokesman, said some of the details of the program, including how the subsidies would be distributed, have yet to be worked out.

“Below the line” applies to costs associated with the production such as crew members, location and equipment rentals, set building, postproduction, and film processing. It does not include the cost of people with agents, including the stars, directors and producers.

Hahn said the subsidy program “isn’t about millionaire producers and movie stars.”

“It’s about the people who wire the lighting, drive the truck and build the sets. And it’s about our economy – Hollywood generates $30 billion and 200,000 jobs for Los Angeles.”

Filming in the Los Angeles area in 2004 hit a record 52,707 production days, or a 19 percent increase over 2003, according to EIDC figures.
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Staff Writer Jason Kandel contributed to this story.

Contac the author Beth Barrett at: (818) 713-3731 or [email protected]