State aims for second take with film tax credit

DES MOINES - Iowa has hit the 'refresh” button on its efforts to nurture media productions in the state.

Iowa, which once hoped to be the darling of the film industry with its best-in-the-nation state tax credits, suffered a major setback and embarrassment five years ago when the poorly managed program came unraveled, taking down a number of filmmakers and state officials with it.

But like fictional box-office puncher Rocky Balboa, Iowa's down-but-not-out effort to lure films, television shows, web series, apps, commercials, animation shorts or other media productions struggled to its feet and began a slow climb on a comeback trail.

'I've been very pleased with what I've found,” said Liz Gilman, executive director of Produce Iowa, who was brought on board in May 2013 to run the new office in the state Department of Cultural Affairs that took the place of the defunct Iowa Film Office. 'I'm really pleasantly surprised with how much of the activity is going on film-wise around the state.

'I had no clue how much was happening. It's been great to discover that.”

Iowa currently is the backdrop for 'The Summerland Project,” an independent drama being shot in Cedar Rapids with a cast that includes Kate Vernon, Ed Begley Jr., Angela Billman and Debra Wilson. The movie's screenplay was written by Rob Merritt, city editor of The Gazette in Cedar Rapids.

The western Iowa town of Elk Horn rose to rock-star status in Denmark thanks to a one-hour documentary called 'Denmark on the Prairie” that aired last fall on Danish television and featured the small rural community's proud Danish heritage and old-world traditions. That brought a popular Danish cooking show to Iowa and plans for a follow-up documentary.

American TV shows such as 'West End Salvage” in Des Moines or 'American Pickers” in Le Claire have been successful ventures, national advertising agencies have used Iowa as locations for commercial shoots and Gilman teased that a network television show will be coming to Iowa next month but she'd signed a confidential agreement not to discuss it.

'There's all these different platforms and it keeps changing, so it's actually a positive thing to be able to hit the refresh button and start over because the industry has changed so much in five years when there used to be an office here,” she said. 'It's a completely different thing. It's not the traditional business model whatsoever.”

The debacle that surrounded Iowa's film credit program is becoming a fading memory except for the occasional settlement state attorneys have been negotiating with moviemakers hurt when the program collapsed in September 2009.

'We're getting close” to resolving the remaining outstanding claims for state film tax credits, said state solicitor general Jeffrey Thompson, who has been the lead negotiator for the Iowa Attorney General's Office.

Iowa recently agreed to pay slightly more than $2 million to settle claims for transferable tax credits brought for three movie projects - 'Lucky,” 'When September Ends” and 'Underground.” That brought the state payout to nearly $12 million to settle disputes that arose when Iowa suspended and then closed the program after a state audit released in October 2010 turned up $26 million in credits that were improperly issued by the Iowa Department of Economic Development (DED).

'At the very beginning, what we were facing was the potential liability in the $300 million range,” Thompson recalled. 'I think we've resolved it for less than $20 million, and maybe less than $15 million total.

'There were originally 155 projects, and the administrative process that we put in place resolved most of them.”

Created by the Legislature in 2007, the state film tax credit program provided a 25 percent tax credit for production expenditures made in Iowa, and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa.

Former Iowa Gov. Chet Culver suspended the program in September 2009 after DED employees raised concerns that credits were being issued for the purchase of luxury vehicles that later were taken to California for personal use.

After the scandal broke, six DED employees lost their jobs - including former Iowa Film Office manager Tom Wheeler. Wheeler was one of seven people who have been convicted of criminal charges stemming from the film tax credit fiasco and the only state official who faced prosecution.

The bad experience prompted Iowa to drop out of the competition to offer tax credits, as more than 40 other states and Canada do, until the state's cultural affairs agency hired Gilman last year and armed her with a phone and a computer to market the state's production companies, workers and scenic attractions to movies, television and digital media.

Now, with more than a year under her belt, Gilman is ramping up the effort by touting the www.produceiowa.com website as a clearinghouse for pertinent media production information.

The website explains state permit requirements, features upcoming film festivals and other Iowa events of interest, allows communities to post eye-catching locations or scenery in their areas, provides a database of prospective media production crew and support services designed to help connect the dots for prospective projects.

'A lot of people come here, and they're really impressed with the talent that is here and how inexpensive and easy it is to shoot here,” she said. 'There are a lot of things on the horizon. I'm sure eventually we'll hit it with another ‘Field of Dreams.'”