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July 2013

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The PNYA: a success story W hy have over 50 feature film and television projects made New York State their destination for post production since July 24, 2012? It's a great success story. It starts with a small group of post facility owner-operators, a labor union and a dream. It ends with a governor who saw the potential for hundreds of new permanent jobs all over his state and removed barriers to expanding the industry that would create those jobs. The undeniable success of the NYS Post Production Film and Television tax incentive exemplifies what happens when competitors suspend their cut-throat tactics for increasing the bottom line and for an hour every month work together for the good of the industry. In December 2009, 13 post facilities, the Editor's Guild and a lobbyist met to brainstorm how to enact a "Post Only" film and television tax incentive for New York State. This unlikely collaboration — unlikely because it was made up of fierce competitors, many with litigious histories — met week after week and decided to call themselves the Post New York Alliance (PNYA). THE BEGINNING We decided the mission of the PNYA would be to develop and promote public policy that benefits the film and television industry as a whole by: 1) incentivizing projects to finish in New York; 2) marketing the services provided by the New York post production industry; and 3) creating avenues for talent to enter this fast-growing sector of the economy. On a snowy Tuesday morning in January 2010, we headed up to Albany. Our lobbyist dragged us through the halls all morning and afternoon. We said the same thing to senators and assembly-people over and over again: this incentive will create jobs. It seemed like a no-brainer — extending the existing film and television tax incentive to include a program for projects shot outside of New York to come back to New York to finish would create jobs. Following many more trips to Albany, in August of 2010 the Post Only Incentive was signed into law. Post Only was allocated $7 million per year for five years, a carve out of the $420 million Empire State Film and TV Production Incentive. The original incentive, passed in 2004, always included post. If a project shot and posted here it was eligible for an incentive on the post portion of its spend. But the projects that didn't shoot in NYS historically chose LA or countries with aggressive visual effects credits to complete their projects. The original Post Only incentive was a 10 percent credit on eligible spends for projects that completed 75 percent or more of that spend in New York. We were elated to be the only legislative add in the 2010 budget. The PNYA then flew to Los Angeles and met with studio finance execs to explain how the new credit worked, but we saw almost immediately that 10 percent was not going to be enough to convince productions to relocate for post. The great thing about NY's tax incentive and how it differs from film and TV credits in other states is that only below-the-line labor, rentals and purchases used in the state are eligible for the credit. No travel is rebated unless it's within New York — no actors, directors, producers, flowers, candles or birthday cakes. So it was difficult to convince out-of-state productions to travel and house their director and producers in the city that doesn't sleep for the duration of post — typically a 26-to52-week event. impact on the New York economy could be if the incentive got more aggressive. Everyone in the administration was receptive to ideas that would bring more revenue to the state, create jobs and keep students who were educated here, working here. SUCCESS On July 24, 2012, Governor Cuomo signed our bill into law, tripling the post incentive. Since that bill passed, 51 projects have applied for the incentive. In less than one year that is exactly three times the number of projects that applied for the incentive in the course of two years when the incentive was 10 percent. The 2013 state budget included even more changes. We now have the most aggressive post incentive anywhere, and it breaks down into two standalone programs: one for VFX, requiring a production to complete the lesser of 20 percent of their VFX budget or $3 million in NYS. The other is a credit on the rest of post, as long as 75 percent of eligible costs are incurred in state. That is a 30 percent rebate in NYC, and 35 percent in counties north of the MTA commuter line. By Yana Collins Lehman Managing Director Trevanna Post Executive Chairperson Post New York Alliance New York Helping bring and keep post work in New York State. Members mingle at a Post New York Alliance member party. EVOLUTION So the PNYA returned to Albany and tried to convince the legislature to increase it from 10 to 30 percent. The allocation would remain the same — still $7 million per year — but the rebate should be 30 percent (or triple) in order to get the rush of projects to NYS that we envisioned when our quest began. 2011 was crushing. Our assurance that we could attract jobs to the state was no match for the opposition to our ideas, which came from interests in the film industry who did not take post seriously. Hundreds of thousands of dollars were spent to defeat us. Down but not out, in the fall of 2011 the PNYA began working with Governor Andrew Cuomo's office and the Empire State Development Corporation to quantify what the The tax incentive program was extended through 2019, which gives post facilities the confidence that expansion will be an intelligent investment. We have already seen millions of dollars in expansion projects in post facilities all over the state. What exactly do 51 projects mean to the state of New York? They mean jobs. Jobs not only in the post industry, but jobs in every sector entertainment touches. This means kids coming out of college can find jobs in film and television. It means projects shooting everywhere from Jordan to Los Angeles are coming to New York State to finish. PNYA is an association of post pros and organizations working within film,TV and interactive media creating content and entertainment properties in New York City and New York State. Post • July 2013 43

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