Study shows film, TV production incentives pay big dividends in St. Louis County
More movie makers are setting their sights on the Northland, as yet another holiday-themed production will soon be shot in Duluth.
DULUTH — An industry is gaining a firmer foothold in the Northland as preparations have begun for another feature film to be shot locally in May. The call has gone out for experienced production crew members to send their credentials to RescuingChristmas@gmail.com.
This is just the latest example of a production drawn to Duluth.
Local and state investments in the film and TV industry appear to be paying off, according to a recently released study by the University of Minnesota Duluth Labovitz School’s Bureau of Business and Economic Research .
Last year, film and television productions brought 106 jobs to St. Louis County and pumped $3.2 million into the local economy, resulting in an output of $6.9 million, when the total economic impact is considered, the report found.
What’s more, researchers predict additional incentives could attract substantially more production activity to the region, and with that, more spending.
“I think the study confirms the general feeling here locally that there’s absolutely potential to grow the film and TV industry, and that just follows some of the obvious success we’ve had with productions such as 'Merry Kiss Cam' last year,” said at large Duluth City Councilor Arik Forsman.
Shari Marshik, executive director of the Upper Midwest Film Office, or UMFO, said her organization is typically working with about 20 prospective producers at any given time.
She said the pace of creative work has accelerated as the pandemic has eased, especially after so many people indulged in binge-watching as they self-isolated to control the spread of the coronavirus.
Coming out of the lockdown, she said actors and other production professionals have been in high demand, causing a couple Northland projects to fall off the schedule in 2022.
“I’m super-proud of the progress that we made in a year, especially coming out of the pandemic,” Marshik said.
Forsman credited the local industry foundation being built by UMFO and Catalyst, another creative Duluth-based nonprofit, for helping put the city and county on the map as a destination for film and TV productions.
St. Louis County has set aside $1 million in incentive money, which it offers as a 25% rebate for qualified production spending within its borders. An additional 20% incentive is offered by the Department of Iron Range Resources and Rehabilitation for productions shot in Range communities. And Duluth has set aside $200,000 for an additional 25% rebate it offers for productions in the city.
All of these local incentives are stacked atop a state production credit of 25%.
Combined, the incentives can knock 70%-75% off the cost of shooting in St. Louis County locales.
Marshik said Duluth made use of all its production incentive dollars in 2022.
But St. Louis County left some of its money on the table. The $1 million the County Board had set aside for production incentives theoretically would have generated at least $4 million in production spending if fully utilized, versus the $3.2 million in 2022 documented by the UMD study.
Marshik expressed optimism that more of the county’s dollars will be put to work this year.
“We have all kinds of projects that are on deck. We have two certified for May right now, and we very much look forward to serving those projects,” she said.
Marshik noted a pending holiday production builds on the momentum of “Merry Kiss Cam,” which was shot in Duluth last year, and said St. Louis County is well poised to capture more of those types of films in the future.
“Although we don’t want to pigeon-hole ourselves into being just a snowy place because we’ve got three other seasons as well,” she said.
Marshik said UMFO’s primary focus is to encourage state lawmakers to extend and expand its production credit program, which currently is slated to expire in 2025.
“We want the state to understand that this is a good investment, that it has a return that is as good if not better than many of our other beloved industries here in Minnesota. So, we needed to say: Here’s our proof of concept. And we did that. It’s fantastic,” Marshik said.
She views the state and local incentives as essential for Minnesota communities to compete in the industry.
“If these incentives did not exist, we would not have this business, because there are 30 other states with credits, and it’s a business decision for projects to come and shoot here. It needs to make financial sense for them,” she said.
If the current annual production incentive available in St, Louis County were boosted from $1 million to $3.25 million the UMD study predicts that it would result in the creation of 485 jobs, $13.6 million in spending and total economic output of $28.7 million.
“I think what the numbers show is: The sky’s the limit, and giving this some runway is worth it,” Marshik said.
But she said the study was not meant to be used as a lobbying tool for more local tax dollars to be funneled into production incentives.
“We wanted to know what the numbers say. We did not commission this study to ask St. Louis County for more money right now," Marshik said.
She credited St. Louis County as one of a handful of counties in the state to wager so boldly on the film and TV industries.
The study predicts that if a soundstage could be added to the mix of local resources available, St. Louis County could see production spending boom to far greater levels. But that would likely require an investment in the neighborhood of $30 million-$45 million.
Forsman was part of a local delegation that traveled last year to California to learn more about what the construction of a soundstage could potentially bring to the Northland.
“That question gets you into a little different discussion, because it’s not just having this rebate program. It’s do you actually put some public dollars or bonding toward a physical structure that could help really escalate this industry to another level in our region?” he said.
“I think there’s more work to be done. But there’s certainly a path where Duluth and St. Louis County could carve out enough of a market share and is able to attract enough attention that we could make a soundstage work in those first few years, and then it could really take off from there,” Forsman said. “But there would need to be more to come on that, I would say.”
As for financing a soundstage at some point, Markcik said: “If you look at the places and spaces where it has been the most successful, it has been with a combination of private and public investment or just private equity.”