Something unusual happened in Seattle this spring: A Hollywood movie came to town.
Over a few days in May, “Kimi” — a Warner Bros./New Line film starring Zoë Kravitz and directed by Steven Soderbergh — hired over a thousand extras for its protest scenes, stirred up chatter among actual protesters who never materialized, and lightly disrupted downtown traffic.
The production attracted attention from social media and regular media, reigniting what is, for some, a familiar conversation: Why aren’t more big-budget movies filmed in scenic Seattle?
It’s an old question, dating back to the late ’90s, after Seattle reached its Hollywood-film-hosting peak (“Singles,” “Sleepless in Seattle,” “10 Things I Hate About You”) and other locations had begun reeling in the bigger fish — or, in the case of British Columbia, the whales. In some nearby cities, film production isn’t big news. It’s just part of the scenery.
“There’s a comparison I really like,” said Chris Swenson, acting director at the Seattle Office of Film + Music. “Seattle is a place where everything stops for construction. When you’re working on a building, you close the street, alter traffic, nobody blinks an eye. But in Vancouver, where they have 30-40 productions going on at once, film stops construction, stops road and utility work, and people just deal with it — because it’s such a natural part of their industry.”
That industry brings money. According to research from the Vancouver Economic Commission, the motion-picture productions directly spent $4.1 billion in British Columbia in 2019, up from $1.6 billion in 2012. In Washington state between 2007 and 2021, the film industry has spent a meager $162 million — that we know of.
Washington Filmworks, a nonprofit that manages the state’s Motion Picture Competitiveness Program, only tracks the spending of productions it’s been able to help fund. But the comparison ($4.1 billion in one year vs. $162 million over 15 years) is still stark. “No matter what number you pick,” Filmworks director Amy Lillard said, “Washington will be very far behind Vancouver, B.C.”
Washington is so far behind B.C., Lillard and others argued, it’s not even worth trying to catch up. But we might look to other U.S. states — especially Oregon — which are also ahead of Washington, but not so far that we couldn’t close the gap.
Washington falls behind
How did things get this way?
People who know a few things about the film world will often give a simple, two-word answer: financial incentives.
“For better or for worse, film is an incentivized industry,” said Kate Becker, the King County director of Creative Economy and Recovery. “Around 38 states have programs to incentivize film production. We are always at the bottom of that list.”
Each state incentive program has a pot of money it can offer film productions in the form of rebates or tax credits: spend some, get a percentage back. Washington’s film incentive, Lillard said, was the sixth in the U.S., starting in 2007 with $3.5 million — and that number hasn’t budged since.
This year, Oregon raised the spending cap on its pot of film-incentive money from $14 million to $20 million, while Montana’s went from $10 million to $12 million, which still puts both states in the bottom third of film-incentive programs. Compare with other states: Louisiana, $180 million; New York, $420 million; California, $420 million. (Even California has to compete in the incentives game.) British Columbia and Georgia, which have been waging active campaigns to attract motion-picture projects, have no annual caps.
“This is the way the film industry works,” Lillard said. “On the first call I ever get about a new production, the first question is literally always about incentives. Then they ask about our crew base and locations. These incentives are how the film industry does business — and when we run out of money, those big projects stop calling.”
Lillard gave an example: Due to the pandemic, filming in the state largely shut down in 2020, and Filmworks was able to roll over that year’s $3.5 million into 2021. “This year,” she said, “we approved six projects, spent $7 million, and it was gone in two months.” (“Kimi” wasn’t one of those six projects. It didn’t apply for incentive money, so Filmworks wasn’t able to track how much it spent in the state.)
In addition to the state’s $3.5 million incentive, King County spent $1.5 million to open a 117,000-square-foot studio facility, with two soundstages, on Harbor Island — in the old Fisher Flour Mill — in April. Harbor Island Studios have attracted some productions, including the Adult Swim show “Three Busy Debras.” (Amy Poehler is one of its nine executive producers.)
But in a landscape where Georgia’s no-cap incentives and over 100 soundstages are attracting Marvel movies (the “Black Panther” sequel is one of 53 productions currently filming in the state) and New Mexico managed to woo “Breaking Bad” away from California with tax credits, Washington’s film enticements just aren’t competitive enough.
“It’s pitiful,” said Washington state Sen. Lisa Wellman, who, before joining the Legislature in 2016, had a career in publishing and new media with Apple Inc. “Ineffective is probably a better word.”
Wellman agrees the state should raise the film-incentive cap but says it should go even further.
“The film industry is an industry, it’s a business,” said Wellman, D-Mercer Island. “We have so many people in that industry, and in the arts community in general, who have to go elsewhere to make a living, and we need to have a strategic plan to decide whether we’re going to invest to have that business here — look at the creative industry, the online streaming industry, all the things happening with AI and AR, etc. We can’t just say, ‘We’ll invest half a million dollars here.’ We have to be real. This is a big business, there’s a lot of money to be made, and we need to figure it out.”
To that end, Wellman and Sen. Bob Hasegawa, D-Seattle, are attempting to carve out a budget proviso that would assemble a team to study the issue and make long-term recommendations beyond raising the incentive.
“The incentive has been around for years, but it hasn’t made much tangible progress,” said Seattle filmmaker Bao Tran, whose 2021 martial-arts movie “The Paper Tigers” was filmed largely in Seattle’s Chinatown-International District but did not qualify for incentive money. (Tran said “Paper Tigers” was not able to meet the state’s proof-of-financing requirements in time to apply for the funding.) “Raising the incentive would be a good start, but it needs to be considered within the whole ecosystem and done in conjunction with a lot of other things.”
In the meantime, directors like Tran, as well as film-government liaisons like Swenson (Seattle), Becker (King County) and Lillard (Washington state) would like to see the Legislature add to our state’s comparatively tiny $3.5 million incentive fund.
Filmworks has asked Washington lawmakers to raise this state’s incentive cap nine times since 2007, all without success. They’ll return to Olympia during the 2022 session to ask for a 10th time — but Lillard won’t specify by how much.
“Every dollar in funding assistance we give a production generates $10 in economic activity,” she said. “With Oregon at $20 million in incentives and Montana at $12 million, I would like Washington to lead the region.”
Where do we go from here?
Oregon’s $20 million benchmark could serve as a target for Washington’s film-incentive program — but skeptics in Olympia aren’t convinced the program should be expanded at all.
Legislators like Sen. Reuven Carlyle, D-Seattle, have voted to continue the existence of Filmworks and the Motion Picture Competitiveness Program but have opposed increasing the incentive.
“The industry is having a pretty good time building out policy frameworks around the country by which they simply migrate from market to market based on incentive benefits,” Carlyle said, adding that he supports the arts economy. (Carlyle’s district, the 36th, includes Pacific Northwest Ballet, Seattle Repertory Theatre, On the Boards and other arts institutions.)
But he is not convinced Washington should join the race to court major movie productions. “There is value to the program, and that value is positive, but my concerns are philosophical,” he said. “Is this the best use of our economic-development time and energy?”
Nobody disagrees that the motion-picture industry has migrated from market to market as incentives have changed — Washington is one of the states that got left behind, while Oregon slowly built a more robust incentives system that continues to grow and could serve as a model for Washington.
Starting in the 1980s, and accelerating in the ’90s and ’00s, some U.S. states and Canadian provinces (especially British Columbia) began offering a buffet of incentives to film productions: fee waivers, sales and lodging tax exemptions and so on. But the biggest lures were cash rebates and tax credits — though that second term can generate some confusion.
“Tax credits” might sound like the productions get a break on taxes they owe, which is occasionally the case. But many productions find their tax-credit eligibility is higher than their tax liability. Some states’ tax credits are transferrable, meaning the production can sell them to people who do owe taxes (sometimes for 90 cents on the dollar), or refundable, meaning that if a film owes $200 in taxes and is eligible for a $1,000 tax credit, the state will pay the production $800.
Washington, like Oregon, uses the cash-rebate model: If a production spends a threshold amount of money, it gets a reimbursement.
The rules can be a little Byzantine, but it’s worth understanding how these taxpayer-funded mechanisms work, at least in broad strokes:
- Most states require productions to spend a minimum amount of money to qualify for the big incentives. In Oregon, that’s $1 million; in Washington, it’s $500,000 for film and $300,000 per episode for TV and web series.
- If a production qualifies, Washington will rebate 30% of its in-state costs (goods and services, rentals, etc.); Oregon will rebate 20%.
- Washington’s program prioritizes local hiring, offering a 30% rebate on state-resident labor for film and a 30-35% rebate for TV and web series; Oregon will rebate 16.2% of all labor, resident and nonresident.
- Washington offers a rebate on some labor by out-of-state workers (15%) but with several strings attached, including a requirement that the production hires at least 85% local labor.
- The upshot: While Washington’s rebate is more generous for local labor and tougher about out-of-state labor, it’s more limited by the relatively paltry $3.5 million budget. Oregon’s rebate is more conservative in some particulars, but can attract many more projects with its $20 million budget (which still makes it a small player on the national scene).
Oregon, like many states, also has a salary cap on its labor rebate: $1 million. Washington does not have an explicit salary cap, but a host of stipulations prevents Meryl Streep from swooping into town and making the state pay 15% of her contract.
“We don’t get a $3 million-to-$4 million actor coming in and getting a 16% rebate,” said Tim Williams, executive director of Oregon Film. “But to be honest, because we’re a smaller program, we’re not in competition with New Mexico, Atlanta and Vancouver. They’re getting the Marvel movies. We’re not.”
Williams isn’t eager to jump to the Marvel-level incentives — he’d prefer Oregon’s program to grow slowly, as it has been, while the state’s crew base and film infrastructure grow organically alongside it. He’s watched states like Michigan and Iowa jump headlong into the incentives game, only to see it backfire.
“A bunch of studios flood in bringing huge projects, but there’s no crew base to support Marvel movies,” he said. “Then, in the cold light of day, you have Disney getting hundreds of millions in rebates but only four local people on set.” The flash-floods of money have also brought fraud and financial mismanagement scandals.
Williams isn’t worried Oregon’s slow-but-steady growth will suffer that fate. “I’m not an economist, but what I see in Oregon is a high incidence of local hiring and a high incidence of product that celebrates Oregon on screen,” he said. “‘Portlandia,’ as much as people in Portland hated it, was huge for tourism. We still have ‘Twilight’ tourism. During the pandemic, ‘Top Chef’ turned Portland around.”
Like Washington, Oregon has tracked a 10-to-1 ratio of return on investment from its incentive program. That money is not returning directly to the state’s revenues, Williams clarified, but the state Legislature values the program’s economic booster effect — enough to raise the incentive cap again this year. Washington’s Legislature hasn’t raised the film-incentive cap in 14 years.
“It’s just been so frustrating for this community to see Portland take off — and, of course, Vancouver — while Seattle struggles,” said filmmaker SJ Chiro, whose film “East of the Mountains,” starring Tom Skerritt, received Washington state incentive funding in 2019. “I just don’t think it should be that hard of a sell.”