Uncertainty over Iowa tax credits making filmmakers skittish

DES MOINES – Iowa-based filmmakers worried Monday that the suspension of the state state's popular tax credit program could kill the momentum Iowa was building for becoming a “new Hollywood.”

Member of the Iowa Motion Picture Association said word already has reached potential investors and producers that Gov. Chet Culver has suspended Iowa's incentive package in the wake of concerns over alleged irregularities, abuses and mismanagement of the program.

“I think it's put the brakes on some developing projects,” said Ann Wilkinson, an IMPA board member and owner of PMS Casting who noted she has spoken with several producers who have halted plans to shoot in Iowa awaiting the “fallout” from a major shakeup in the program's management.

On Monday, Culver announced the departures of Tom Wheeler as manager of the Iowa Film Office and Vince Lintz, deputy director of the state Department of Economic Development. Wheeler had been placed on paid administrative leave last week pending a review of “irregularities” in the film tax credit program.

The governor said he dismissed Wheeler effective immediately, with DED official Amy Johnson serving as interim manager of the film office – a division of the economic development department. Culver also accepted Lintz's resignation.

Those developments followed last Friday's announcement that DED Director Mike Tramontina had resigned as questions swirled around the oversight of a state film tax credit program that already has paid about $32 million for 22 projects filmed in Iowa over the past three years.

Late Monday, Culver issued a statement saying recent developments regarding the film tax credit program have prompted him to take immediate steps to protect Iowa taxpayers.

"My actions are intended to protect the best interest of Iowans, and not to harm the growing film and television industry in our state,” the governor said. “This program should continue only after we have the controls, oversight, and due diligence in place to assure that it operates properly.”

The rapidly changing uncertainty surrounding the incentive program making filmmakers skittish, said IMPA president Kent Newman.

“The longer it goes on, the worse it's going to be,” he said. “We're hopeful that we can resolve this as quickly as possible. There's a lot of momentum that's established now. Things are really picking up and taking off.”

Bruce Heppner Elgin, president of StoryBench and Iowa Film Production Services, said he already has completed two Iowa-based projects and plans to proceed in nine days with a new film that is not dependent on state tax credits as part of the financing package.

However, he said the process already had begun to build the infrastructure and expertise, train the personnel, and lay the foundation to “make Iowa into a new Hollywood,” but those efforts might be jeopardized if the cloud over the tax credit program is not lifted quickly.

“We do have some worries there may be damage already with the quick shutdown. If Iowa does not seem like it's got a stable incentive program, then they will look for other states that offer incentives,” said Heppner Elgin. “What's at risk are hundreds upon hundreds of jobs for Iowans and millions of dollars coming into the economy.”

Tim Boyle of the Cedar Rapids Convention and Visitors Bureau said he had contacts this summer about eight different film productions looking at Iowa and the state already is reaping a sizable financial benefit from projects spurred by interest in Iowa's tax credits.

“It's really unfortunate that this has occurred now because the whole process was really just now catching momentum and really starting to take off,” Boyle said. “Potentially (the fallout) could be significant because it's show business – part of it is the show and part of it is the business, and film producers are always looking at the bottom line.”