For 10 years, Tommy Boyer has supplied equipment for the wardrobe departments of feature films like The Pink Panther and Confessions of a Shopaholic. Robert De Niro is a frequent customer.
But since the state program providing tax credits for film and TV production ran out of money last month, business at his Manhattan firm has come to a standstill. Even a request from ABC to book Mr. Boyer's wardrobe office for an upcoming pilot was canceled just a few days later when word of the stalled incentive program hit the streets.
“We're down at least 50%,” says Mr. Boyer, co-owner of Manhattan Wardrobe Supply, which has nine employees. He will have to lay off half his staff if business doesn't pick up by April. “We've weathered 9/11, the writers' strike, the Broadway strike. It's one thing after another, but I never expected this.”
Mr. Boyer is one of about 4,000 entrepreneurs in New York City who have built small and medium-size businesses to serve the film industry, only to experience something akin to a roller-coaster ride.
This latest bump is the result of an attempt to stem the flight of production to nearby Connecticut and other neighboring states, which offer their own incentives. To keep productions here, Gov. David Paterson tripled an existing state tax break, raising it to 30% of expenditures, and allocated $685 million to fund the program through 2013.
The incentive was tremendously successful, bringing in more work than ever. In fact, the motion picture and sound-recording industry added 3,300 jobs in New York City in 2008, posting the biggest increase of any sector, according to real estate services firm Eastern Consolidated. But the program ran out of money in less than 10 months.
Many in the industry are in a state of disbelief.
“During the writers' strike, our business was down 60%, but then things got busy again, and it was so good,” says Scott Liroff, vice president of City Knickerbocker, a 102-year-old family business that rents lighting props. “I don't know if we can recover from another setback.”
Far-reaching effects
If the program doesn't get a cash infusion, the effects will be far-reaching. The New York area is home to 78,000 production workers, many of whom are facing unemployment. The production slowdown could even affect businesses such as coffee shops and drugstores that are located near production hotbeds such as Kaufman Astoria Studios, which brings 2,000 people to its neighborhood in Queens when it is at full capacity.
“We all feel we are fighting for our lives,” says Beth Kushnick, the set decorator on Fringe. The hit show on Fox is now considering moving from Silvercup Studios in Long Island City, Queens, to a cheaper location. “The fear element of having something successful like the credit and knowing it could be gone has set off a panic.”
Of course, many are fighting to get the program re-funded in the upcoming state budget, which applies to the fiscal year that begins April 1. Queens Assemblyman Michael Gianaris is hopeful that the change will go through.
“It's a matter of educating my colleagues,” Mr. Gianaris says. “At a time when we need to diversify outside the financial sector, it would be foolish to allow the one industry that has been thriving to collapse.”
But some damage has already been done. The stalled incentive program has cost New York its entire spring pilot season. Last year, a record 19 pilots were produced here. Each of them pumped from $3 million to $10 million into the economy.
What's more, at least 10 films slated for spring have gone to other locations to shoot because of the uncertainty over the incentive program. And television shows shot in New York City, such as Fringe, Life on Mars and In Treatment, are scouting out new locations. Because of their production schedules, they may not be able to wait for the state's decision.
“Credibility issue”
“Already we have a credibility issue, because the state told producers they have a tax credit until 2013,” says Hal Rosenbluth, president of Kaufman Astoria Studios. “Anytime you put the thought in a producer's mind that what was promised may not be delivered, it creates a marketing problem.”
The issue has galvanized the film community. Anthony Pizzuto, chief executive of Two Tones Pictures, and Alex Zablocki, a candidate for New York City public advocate, have started a petition to encourage the governor to re-fund the incentive program. The two have collected more than 10,000 signatures.
There is little else that those who make their living from the production industry can do.
“The situation is more precarious than ever, because now we're fighting sister states that have tax incentives,” says Richard Slavin, vice president of sales for Arenson Prop Center, whose business is down 20%. “Not renewing the incentives can put you out of business.”
