The Seward Phoenix Log - News of the Eastern Kenai Peninsula since 1966

By Heidi Zemach
For The LOG 

Movie tax incentive debate comes to town


Heidi Zemach | For The LOG

Sugar Mountain actors Drew Roy, John Karna, Haley Webb, Shane Coffey and director Richard Gray on the set at Lowell Point during recent filming.

Seward continues to embrace the filming of independent feature film "Sugar Mountain" in the area, as it did years ago for the Christian movie "Christmas with a Capital C." During the six weeks of filming local hotels and bed and breakfasts, still in their slow season, are providing accommodations for visiting actors and production crew. Restaurants are catering meals, and as many as 72 local extras and crew, mostly volunteers, showed up on a single day to help shoot a scene of a search and rescue just to be a part of it. It's a movie that promises to make Seward's unique location shine and could attract visitors for as long as the movie runs.

"Sugar Mountain" is an independent production, and with Alaska politics going the direction it has been, it may represent the tail end of an Alaska film industry that might have been. Alaska's flurry of major movie productions since the Alaska Film Incentive Program was put in place six years ago, spawning such films as "Big Miracle" and "Frozen Ground," has ground nearly to a halt due to the ongoing efforts of Alaska legislators to "fix" the program, said Ron Holmstrom, Alaska liaison for "Sugar Mountain."

"Keeping our film industry growing has become a constant, bewildering struggle with our own state legislature. Each new session brings a new 'adjustment' to a program that makes it increasingly difficult to attract bigger budget movies to film here," he wrote in The Turnagain Times on April 3. "Since our Alaska Legislature began "fixing" what was an excellent film program, all we have been seeing are "reality" shows and other very low-budget projects coming to Alaska. Most of these programs refuse to hire our professionals and many of our local artists are considering leaving their unions so they may take these low-paying jobs. Others are migrating to states with more opportunity."

The first series of changes cut back subsidies on non-Alaskan cast and crew.

"Now there are two bills before our State Legislature to end the film industry in Alaska. Either HB 112 or HB 306 will both finally do what certain of our reps have been trying to do for four years: Keep the movie business from growing in our state," Holmstrom said. "Even though they must admit that our industry brings millions of dollars to the state and creates hundreds of jobs and business opportunities, they feel that it is worth it to keep what they call a 'far-left' industry out of Alaska."

Critics, led by Rep. Bill Stoltze, R-Chugiak, the prime sponsor of the House Bill 112, say the tax incentives result in lost tax revenues and don't create enough jobs for Alaskans, or enough spending to make it worth the losses in state tax revenue. The state subsidized "The Frozen Ground," the recent movie about mass serial killer Robert Hansen, by $6.3 million. Producers paid Alaskan workers only $1.3 million, whereas it paid $10.1 million to Outside actors and workers. Stoltze admitted he personally did not like "The Frozen Ground," which paints an unflattering picture of Alaska, where killer Robert Hansen was able to hunt down and murder at least 30 women. But Alaska movie insiders suspect the real reason for discontinuing the Alaska tax subsidy may be that Stoltze was offended by remarks movie actor Ted Danson made critical of Alaska's oil industry while filming "Big Miracle" here a few summers ago.

"There is a feeling down there at the legislature you know that this is the oil industry's money and here we are investing it in films, and some of the people that are working in the films aren't saying things that are very kind about the film industry, and so it's kind of insulting," said Dorene Lorenz, host of the TV show "Alaska Daily." Lorenz gave Yellow Brick Films Director Richard Gray the impromptu tour of Seward last year that convinced him to relocate the movie from upstate New York to Seward. "But I think it's a very small, myopic view shed," she said. "Who cares what Ted Danson thinks about drilling in Alaska? Not very many people. Who's going to care about the scenes in 'Sugar Mountain' and want to come there and see these amazing vistas? Tens of thousands, if not hundreds of thousands of people over the next decade... To me it just seems kind of silly."

The film incentive program has actually seen a very decent return on investment, according to the Alaska Department of Commerce, Community and Economic Development. The net economic benefit of the six-year incentive program is $18 million, by Northern Economics estimates. As of last April, films receiving the Alaska tax credit employed 1,138 Alaskans; paid Alaskans $10.5 million in wages; and generated more than $37 million in spending with in-state vendors, it found. The Alaska Department of Labor also trained 300 people to work in the film industry through a work force development program, and the University of Alaska Fairbanks created a film degree program.

Tax breaks can shave millions off a producer's bottom line, Holmstrom said. Thus, states offering the most aggressive subsidies like Louisiana and Georgia, have begun getting a majority of major film projects these days.

"We were weighing up the benefits of multiple U.S. states and finally settled on Alaska due to its tax incentive program," said Jamie Houge, a Melbourne-based producer for Yellow Brick Films, the company responsible for "Sugar Mountain." "If the Alaskan tax incentive program did not exist 'Sugar Mountain' would have been filmed in upstate New York. The Alaskan landscape and wildlife has added great value to our film," she added. "It's sad to imagine Sugar Mountain will be one of the last feature films to showcase the cinematic landscapes, mountains and wildlife that Alaska has to offer."

The location adds significant value to the movie, agreed Director Richard Gray. He chose to film scenes at some of Seward's most interesting and unique locations including an old abandoned mine on First Avenue, an old Alaska Railroad bridge tunnel near milepost 12, Fourth of July Creek, Vaught Lake and the rustic Pit Bar just outside town.

Heidi Zemach | For The LOG

Dorene Lorenz, during filming at Lowell Point, is responsible for showing director Richard Gray around Seward, and urging him to relocate the film to her hometown.

When his agent apologized to him that taking the role for "Sugar Mountain" would require flying all the way to Alaska, move actor Drew Roy said, "Are you kidding me?" The actors have greatly enjoyed soaking up Alaska experiences, including hiking Mount Marathon, ice climbing at Victor Creek, and whale watching on a wildlife cruise out to Rugged Island, he said.

"Wow, that's crazy," said fellow actress Haley Webb, upon hearing of the proposed tax-credit repeal. "I feel like I would shoot a movie here. It's such a trippy thing. If it makes you feel any better, up in L.A. people don't film there anymore because of the cost."

A Canadian producer friend recently joked that he should write a letter of thanks to the Alaska legislature for returning films about Alaska back to Canada, where they belong, Holmstrom said. A feature film about the 1925 race by dog mushers to get diphtheria serum to Nome, "Race to Save Nome," is in development, and the latest word is that it will be shot either in Canada, Utah or Iceland," he said. "Alaska is not even being considered. This is heart-breaking."


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