‘Bounce’ gets
tax break

The Warner Bros. production
qualifies for Act 221, but
won't say for how much

By Tim Ryan

Warner Bros.' $50 million "The Big Bounce," which today finishes more than two months filming on Oahu, has become the second picture to qualify for Hawaii's Act 221 investment credits, leaving production executives ecstatic and promising to return.

"If we have a project that calls for any environment that Hawaii can offer, we will come back gladly largely because of Act 221," said Andy Meyers, vice president of business affairs for Shangri-La Entertainment, a Warner Bros. subsidiary.

But without Act 221, Meyers said, the story would have been different.

"It was absolutely critical that this production qualify to offset Hawaii's higher costs," Meyers said. "We came to Hawaii ... with the assumption that Act 221 was a viable solution for us to alleviate some of those costs."

Act 221 was adopted by the Legislature in 2001 to encourage investment in high-technology businesses. The act, in part, provides a 100 percent tax credit over five years to qualifying investors.

Universal Studios and Imagine Entertainment's "Blue Crush" was the first film to qualify for the investment credits in what became a publicity nightmare for the state when it was publicized that the studios offset the $31 million budget with about $16 million in investment credits. That publicity has made it more difficult for other film productions, including "The Big Bounce," to qualify for the credits.

Meyers emphasized that the credits are not a handout to studios.

"People generally don't understand what movie productions do," Meyers said. "No company is going to come in with a (multi-million dollar) budget and require the state to do absolutely nothing for that business.

"We shoved $15 million into the Hawaii economy in a very quick amount of time that began in August, and we rebuilt roads so we could film that local residents now can use."

Meyers and other Shangri-La executives last summer began working on the Act 221 application, receiving a conditional favorable ruling that required several conditions be met.

"At first we were told getting the approval was guaranteed and the process was going to be easy," Meyers said. "But as we got further into it ... it began to show itself as a not so done deal."

The state Tax Department "scrutinized" every detail, slowing the process and worrying production executives that the film would not qualify, Meyers said. At one point he considered pulling the production out of Hawaii, he said.

Meyers said Act 221 is a crucial element in attracting film production to bring production costs closer to the Hawaii's competitors: Canada, Australia, New Zealand and many mainland states. But even with the investment credits Hawaii's higher costs were not completely deferred, said Meyers.

He declined to say how much the investment credits are worth.

"But the moment Warner Bros. learned we qualified, I started getting calls about more filming in Hawaii," Meyers said.

The more productions Hawaii attracts means more infrastructure growth for the state's film industry, which creates more jobs and spending, Meyers said. Part of that infrastructure is having enough production equipment available to handle several productions at once, something Hawaii does not yet have. Available equipment will save productions "millions of dollars" in shipping charges from the mainland," Meyers said.

Meyers also suggests the Legislature consider a more user-friendly Act 221 to simplify the process.

"Our message in Hollywood is with Act 221 Hawaii not only is a stunning location, but with its savvy local crew is a perfect location," Meyers said.

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