Ann Arbor gains movie production out of Iowa film tax-credit fiasco

"I think it's possible," said Ken Droz, spokesman for the state office in charge of administering the tax credits.

"We had been approached by a few films over the last year anyway that had been intending to go to Iowa," Droz said.

The exodus from Iowa comes as that state investigates allegations of misuse of its film credits - which, unlike in Michigan, have been transferrable. The state suspended the credits in September, and now the investigation has turned criminal, according to recent reports.

At the same time, according to the Wall Street Journal: "At least a dozen Hollywood projects that were to shoot in coming months are taking the action to other states, diverting millions of dollars from Iowa's economy."

Kay Seaser of the Ann Arbor Area Convention and Visitors Bureau said, so far, one movie production team has quickly changed gears to come to Ann Arbor instead of Iowa.

"We are aware of one film that’s come to the Ann Arbor area as a result of (the Iowa tax suspension)," said Seaser.

That company - which is awaiting a decision on its application for Michigan film tax credits - is Northland Productions. It is producing the comedy "Cedar Rapids" with Ed Helms, who appeared in "Hangover" and stars in television's "The Office."

The director of "Cedar Rapids" is Miguel Arteta, who also directed "Youth in Revolt," filmed in downtown Ann Arbor in summer 2008.

"Cedar Rapids" shooting is expected to begin in Ann Arbor in November, Seaser said.

Work on at least two other motion pictures is planned this fall in Ann Arbor, including filming of "Trust," directed by former "Friends" star David Schwimmer, and post-production work on "Piranha 3D."

Meanwhile, only eight states - including Iowa - now have no tax incentives for film production.

Some say Michigan may reduce incentives, following a request by Gov. Jennifer Granholm to consider reducing the direct expenditure tax credit from up to 42 percent to 37 percent.

But others point to the industry's success and pending plans to build more facilities and establish thousands of film-related jobs in Metro Detroit.

In 2008, the year the Legislature approved the film tax credit, the state's film industry generated $125 million in spending, Droz said.

By the end of September, "We were already hitting $135.5 million, and that’s of (33) productions either shooting or completed," Droz said.

So far, Michigan has refunded $32 million since April 2008, Droz said. Based on pending applications, that total could go up to about $45 million, he estimated.

Paula Gardner is Business Director of AnnArbor.com. Contact her by email or (734) 623-2586, or follow her on Twitter.