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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