Raleigh Studios, Pontiac, Mich. Film Production Site, Fails To Make $630,000 Bond Payment

So much for Michigan's economy-boosting film industry. The financial struggles now have a Pontiac production studio gouging the state pension fund, and demonstrating the negative effects of the state's film incentive cap.

Raleigh Studios wasn't able to make its Feb. 1 payment of $630,000 to out-of-state bondholders, the Macomb Daily reports -- instead, the guarantors of the bond, the State of Michigan Retirement System (SMRS), paid $420,000 of the total.

Raleigh lost business after cuts to the state's film incentive program deterred film crews from setting up shop in Michigan.

In 2010, the state gave out $115 million in rebates to film productions. After the incentive program was capped at $25 million in October, there was a steep drop in companies applying to film in the state. December legislation instated a new system of cash subsidies for films, with an easier application process, but the cap on total spending remains $25 million.

According to the Detroit Free Press, Raleigh Studios expects to make its coming August 2012 bond payment, assuming filming picks up.

The studio itself, built in 2010 on a former General Motors truck plant cost a $80 million. It required extensive state and federal backing, including a total of $18 million in bonds (all guaranteed by the SMRS), $11 million in state tax credits and more than $18 million in federal dollars, according to the Hollywood Reporter.

It is most known for being the filming site of "Oz: The Great and Powerful," a Walt Disney movie, with a star-studded cast featuring James Franco, Mila Kunis, Rachel Weisz, Michelle Willams and Zach Braff. "Oz" was filmed at Raleigh in 2011 and is slated for a 2013 release.

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Comments

[rich3324]

10:25 PM on 02/15/2012

Short sighted on cutting the film incentives.

[Adrian McDonald]

05:43 PM on 02/16/2012

Actually, it was a very smart thing to do and cut losses. The film industry was never going be sustainable without the incentives. Anyone who thinks otherwise is on some spectacular drugs: http://www.stop-runaway-production.com/2012/01/20/if-you-build-it-film-infrastructure-hollywood-will-not-come-unless-bribed/

[corwin]

09:21 PM on 02/15/2012

why do things like this keep happening to Democrats?And, Non Smart People?
But, In repeat myself

[Toka313]

11:34 PM on 02/14/2012

WTG Snyder. A truly growing industry you killed. Even curmudgeon Jack Lessenberry believed.

[corwin]

05:58 PM on 02/15/2012

Tokes,
many companies fail if no one gives them money. In fact, I'd wager firms like Studebaker,Hupmobile and the NY Central could re open if someone gave them lots of money.But-and it's a big but (chuckle),that doesn't make them 'truly growing'.
It's not that complicated.I'm surprised i had to explain it

[Toka313]

03:08 PM on 02/16/2012

The tax breaks were a net positive with economic growth in the industry, and it was intended to be run for a few years to see the real rewwards. Not to mention the intangibles that were even better.

[miaontia]

07:33 PM on 02/14/2012

Granholm Plan A, failed today (UniSolar), now Granholm Plan B is failing (movies). Maybe we should move to Granholm Plan C....windmills!!! Oh, wait...

[Cold in Michigan]

10:25 PM on 02/14/2012

Didn't read it, did ya?

"Raleigh lost business after cuts to the state's film incentive program deterred film crews from setting up shop in Michigan."

Snyder cut the incentive program so no one wants to come to Michigan to make movies. At least put the blame where it belongs and stop making up your own facts.

[corwin]

06:01 PM on 02/15/2012

Cold.
Diffidently, I have to inform you,incentives equals money.So,using Boolean logic,
Film companies wouldn't come if they weren't given money.
Now,some of my best friends were Liberal Arts majors,but this is the kind of stuff that makes you guys look bad

[miaontia]

05:08 PM on 02/14/2012

I see the solar company that was supposed to save Greenville, MI after Electrolux moved out of town filed bankruptcy today, too. Another bad day for Granholm/Li.bturd "business creation".

[Adrian McDonald]

04:56 PM on 02/14/2012

The studio should never have been built in the first place. This was foreseeable: http://www.stop-runaway-production.com/2012/01/20/if-you-build-it-film-infrastructure-hollywood-will-not-come-unless-bribed/