A group of area small businesses downtown are complaining that movie productions near their business locations, without adequate notice and no real incentive, is costing them business as they struggle in the downturn economy.
They contend that, although film company representatives are required to get their permission to film in the areas where their businesses are because it affects the customer traffic, this does not always happen and their businesses are left out in the cold.
Larry Mongo, who owns Mongo’s, a popular bar and restaurant downtown and also leases retail space for several shops in the Himelhoch Building on Washington Blvd., says he did not receive monetary compensation for the disruption of his business as a result of film production until he vigorously complained and even threatened to file a lawsuit.
Mongo said the first incident occurred in October of 2009, when the Highland Park film crew for the movie “Red Dawn” closed down part of the street and sidewalk. Mongo claims that his and other businesses in the area were not notified about the blocking of the thoroughfares and how it could impact their businesses. “How was the movie company given permits to film before they notified all of the businesses in the area?” said Mongo.
“It doesn’t make sense.” According to Erica Hill, the former director of the Detroit Film Office, it is incumbent upon film crews to contact all businesses in the area that could be affected by movie production and to make sure that they are properly informed. This was verified in a recent conversation with Tony Garcia, location scout for the Michigan Film Office. Although he qualified it by stating the amount of money paid out to businesses affected by film crews is negotiable and there is no set price.
“Anytime there’s a film crew on location and there’s a business that could be affected by it, it is up to the film production company to go out and get the permission from the business owners themselves,” said Garcia. “In most cases now as part of the new Detroit application, it actually requires location agreements to be signed with each business owner.”
Sommer Woods, who is the current director of the Detroit Film Office, concurs. “Our policy is that when a business is impacted, representatives of the film company are supposed to get with these businesses to make sure that they do not have a loss of revenue,” she explained in a recent telephone interview. “What you had with ‘Red Dawn’ and the early filming in Detroit was the city was not prepared for this business. They were overwhelmed and it was not done properly. But I don’t think that the film industry has a negative impact on businesses, but if they do, it is an agreement that has to be worked out between the production companies and those businesses within the city.
“Now you have some businesses within the city that don’t always have a loss of revenue; but it’s an opportunity for themThompsonto be able to leverage the film industry and for them to gain additional revenue.”
But Mongo is adamant that his businesses were negatively impacted on several occasions by film crews in the downtown Detroit area. He wishes that the city was as dedicated to making sure Detroit businesses are compensated as they are in making sure the film companies get what they’re after. Mongo said he was not contacted by them, but had to initiate the dialogue which eventually led to him as well as Mildred Windham, who owns a clothing boutique in the same building, being compensated for loss of revenue.
“There is a paper trail,” said Mongo. “How many times have movie people been given permission to film without any signed letter from affected businesses? Also, some of these permission papers are signed by businesses well after filming has started at their locations.”
The owner of Hilal Books, which is located in the immediate vicinity and on the same side of the street as Mongo’s business, also reported that he had not been contacted by film company production people, per Detroit Film Office and Michigan Film Office policy.
Woods said there is no city ordinance as it relates to street closures in the city of Detroit. “We have a perimeter in place, but there is o law,” said Woods.
According to Mongo, the fact that there are no uniform laws or city codes to regulate business compensation, implementation as well as the necessary follow-up is a major part of the problem. “There should be an official and standard scale that should be paid to all businesses in the state of Michigan based on the size of the movie budget,” said Mongo. “And I’m not greedy. I don’t want to be paid a penny more than businesses are receiving in Grosse Pointe and in Birmingham from the film companies. Why should they be allowed to film in Detroit and pay less than they are paying elsewhere? The City of Detroit should set the standard for how much money is to be paid.”
By offering up to 42 percent in cash rebates to movie production companies, at one time Michigan’s film incentive program was the most lucrative in the nation. Gov. Snyder, however, introduced new cuts to what some considered a sweetheart deal for the movie industry. Under the new regulations, the 42 percent cash incentives are replaced by an annual cap of $25 million. Ryan Kazmirzak, a spokesperson for Gov. Snyder, says such measures were necessary to balance the budget and to stop leakage of taxpayer funds without the desired results. Kazmirzak maintains that the 42 percent tax credit is actually a subsidy whereby the State of Michigan literally writes a check.
“Michigan is actually paying out money to Hollywood film producers,” said Kazmirzak. “And we came to the conclusion that the film subsidy right now is unsustainable.”
He went on to explain a major problem with the 42 percent film incentive was that there was no limit and, thus, if a movie company spent $1 billion on film production, the state would be required to pay out $420 million in subsidies.
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