History says the movie studio will fail

It took years to finally get the movie studio underway.  Ground finally broke on the Raleigh studio site, amid the promise of additional jobs and diversifying the local economy.  Not only was it going to house a movie studio but also include a teaching venue, with a local university training people in film-industry trades. “So you’re able to learn your trade, get trained in the business and go right down and work on a set or a movie, in an accounting office, production office, in animation or in editing.”  This was going to be one of the best things that happened to the town in years. That town was Park City, Utah Pontiac, Michigan.

Raleigh Michigan Studios History

What happened next in Pontiac serves as a cautionary tail.  Raleigh Michigan Studios broke ground on the state-of-the-art 360,000 foot production studio in March 2010, amid the promise of adding up to 3,000 jobs to Metro Detroit. Michigan officials initially considered the studio to be a significant economic force, since it was intended to establish the state as a legitimate contender in the 12-month-a-year film business.  The studio seemed as if it was doing well in 2011, with Disney’s Oz the Great and Powerful completing filming there in December 2011. Then news broke in January 2012 that it was likely the studio couldn’t pay its bills and would default on $18 million worth of bonds.  In 2012 the company defaulted on two $630,000 payments and was able to only attract one film (about a super tornado), according to the Detroit Free Press.  In August of 2012, it was announced “By mutual agreement, Michigan Motion Picture Studios is no longer managed by Raleigh Studios.”

Less than a year old, the studio’s three floors of office space are mostly dark, its hallways quiet and empty. Designed to accommodate seven medium-budget feature films a year, Raleigh now is struggling to attract just one. It has defaulted on a $630,000 interest payment, and another payment is due in August. The state-of-the-art venue employs 15-20 people, a far cry from its goal of 3,000 jobs from year-round productions.  –

– Detroit Free Press

The studio continues on as Michigan Motion Picture Studios.  Since the “hand-over”, it is hard to tell whether any movies have actually been filmed at the location.  According to their Facebook page, it does appear that a theater group from Michigan State used it once and they hosted a real-estate convention.

Another Pontiac?

How does any of this relate to Park City Film Studios (PCFS). The fear is that PCFS is heading down the same path as Pontiac and the end result will be an empty carcass of a building sitting along the entry corridor to Park City.  Where once was an open field with alpacas grazing will be an empty parking lot with 40 foot-tall buildings sitting unused.

What do we know about Park City Film Studios?  The annexation of land by Park City, that enabled the studio, was approved in May 2012 by the City Council.  The project is being financed by Greg Ericksen, an intellectual property attorney in Davis County, and Chinese investors.  The announced plans are for a 100 room “national chain” hotel. There will be office space, recording studios, restaurants, sound stages, and a guitar museum.  There will also be an educational component that Utah Valley University will assist with.  The total sq. footage of the completed project is scheduled to be 374,000 sq. feet.

The promise is that the venture will make Park City into a year-round filming locale, that it will diversify the local economy by offering employment opportunities, and that it will provide an education to our residents. Yet, the reality may be less pleasant.

In 2012 we heard that Raleigh Studios would be the cornerstone Movie Studio operating Park City Film Studios. Now it seems the Raleigh Studios is willing to step aside if someone else will run it, according to Ericksen.  It seems strange that a movie studio would be willing to forgo an opportunity, if it was a good one.  Movie studios are many things, but financially-stupid isn’t often one of them.

It also seems like an “if we build it they will come” strategy is being used when coming to tax incentives.  If you recall the Pontiac studio ran into problems when Michigan slashed the total amount of tax credits to $25 million per year. Utah’s total tax incentive cap is $6.8 million per year.  That’s less than a third of Michigan’s when Raleigh Michigan ran into trouble.  As a matter of fact, the Oz movie that was filmed in Pontiac was grandfathered into a previous tax deal and received $40 million in tax incentives.  That’s almost 6 times what Utah is willing to contribute to ALL films in a calendar year.  Marshall Moore, Executive Director of Utah’s Film Commission commented, “What we’re going to have to do in the future is — once they build this studio and see that there is this facility here — we’re going to have to see if there is a way to raise that cap so we can attract a TV series and big-budget features here.”  What happens if they can’t raise it high enough to compete?  The better question, as a tax payers, is do we want them to give away $40 million of our tax dollars to get a film (that’s almost the entire budget of Summit County for a year, by the way).

The promise of diversifying employment also sounds attractive, but again if Pontiac serves as an example, that boost is going to be tiny.  Raleigh Pontiac had the promise of providing up to an additional 3,000 workers.  However, the reality was a fraction of that.  The New York Times reported, “The studio had created only 200 positions by the summer of 2011, according to correspondence between the company and local officials. And when temporary construction workers were excluded from the tally, Pontiac’s records show, the studio reported only 2 employees in 2010 and 12 the next year.”   If the project comes to fruition, as long as there is a restaurant and hotel, Park City will likely get more jobs.  Whether these are the jobs people expect is another question.  It is also likely that movies will bring a lot of their own technical workforce.

At least we will get the tax revenues from these professional flying in from New York and LA and staying in Park City! … unless they stay for more than 30 days.  Utah waives transient room tax for stays of 30+ days when in conjunction with a filming project.

what do we get from this?

So, what do Park City residents get from this project?  A 7 foot fence, big parking lot, and huge buildings, for sure. Since this project can’t be stopped, hopefully it will succeed.  If it truly brings hundreds of full-time, good-paying jobs, trains a workforce, and diversifies our economy, it will be a big win.  Some major hurdles will have to be overcome, but success is possible. If so, those city leaders that pushed for this should be rewarded through our votes and support.

If it fails, and we are left with a climbing gym and a Motel 6 on the entry-corridor, our city’s leaders should be held accountable. The negative things going on at Raleigh Pontiac were well known in May 2012 when this was decided upon.  If this goes bad, their reputations and standing in office should reflect the poor decision that could haunt us for years.

There are those who argue that those voting for this had no choice because the state was going to somehow supersede the local governments and allow the studio to be built in some horrible fashion.  Only by building this studio-monstrosity could we stop them from building a studio monstrosity. It sounds like a very convenient excuse.

The parallels between Park City and Pontiac are great.  It is true that Park City has Sundance and perhaps that makes a difference.  Yet it seems the true driver is economic incentives, and in Utah, sextupling the tax incentives for movies seems like a stretch.  For now, enjoy hiking and biking at Round Valley, playing softball at Quinn’s, and soccer on the fields.  The one thing for sure is that by the end of Summer it will look a lot different out there.

How Park City City Council members voted on annexation:

Andy Beerman – Against

Alex Butwinski – For

Cindy Matsumoto – For

Dick Peek – Against

Liza Simpson – For

How the Park City Planning Commission Voted on Annexation

Voting against Annexation: Strachan, Thomas, Hontz and Pettit
Voting for Annexation: Savage and Worel

Opinions by others:

Park City Planing Staff: Recommended annexation

Park City Planning Commission – Recommended not to annex the land

Mayor, Dana Williams: “Regardless of all the iterations this property has gone through all these years, I think we came up with a mutually agreeable plan and I think it is incumbent upon all of us to make sure this is successful”

Greg Ericksen (founder of Park City Studios):  “I took a minute and said this is going to be a beautiful place.”