News & Events

Weymouth’s SouthField project still stuck on the runway

By JACK ENCARNACAO
The Patriot Ledger
Novenber 14, 16, 17, 2009

SATURDAY: First in a three-day series

Redevelopment of the former South Weymouth air base remains grounded, for reasons ranging from the cost of the land to a heavy reliance on the bond market.

WEYMOUTH — The agency in charge of the former South Weymouth Naval Air Station has spent about $42 million in the past decade to redevelop the land. But the only new building there is a marketing center – where potential tenants are pitched sites that the developer still can’t access. More than a decade after military use of the property ended, about two-thirds of the developable acreage is still owned and controlled by the Navy.

The lack of progress contrasts sharply with what has happened to closed bases elsewhere. Of the 24 bases the Navy marked for closure in 1995, the Weymouth base is one of only three that have not been transferred out of military hands. Four of the six Air Force bases that were marked for closure that year have been completely transferred, as have 25 of 34 Army bases. Several bases that closed around the same time now boast bustling industrial and commercial development.

The reasons behind the stalemate in South Weymouth center around bad decisions, bad timing and, in some cases, plain bad luck. They include a revolving door of leadership at the base oversight agency, South Shore Tri-Town Development Corp., a funding structure that relies heavily on the bond market, the Navy’s refusal to hand part of the base over for free, and a lack of tax rates for the properties to be developed.

Tri-Town’s first few years were characterized by raucous meetings and time-consuming personality clashes. It took well over a year for the agency to hire its first director. The agency then spent 18 months negotiating with a mall developer, but the deal fell apart amid local opposition.

Bill Ryan, a former Weymouth selectman who was active on the base redevelopment issue and later went to work as a spokesman for LNR Property Corp., the company hired to develop the former base, said time was wasted debating the mall plan proposed by Mills Corp.

Ryan said state and federal agencies were making it clear that a traffic-clogged megamall was not the best option for the massive property, particularly when it became apparent that a new Route 3 ramp to the property would not be approved.

In 2002, Tri-Town negotiated for about six months to make MassDevelopment the project manager of the base, but local control issues complicated the discussion. By the end of the year, Tri-Town board members decided to seek a private master developer for the property, a model they had earlier avoided.

In September 2002, Tri-Town hired LNR to build what came to be known as SouthField.

Facing the bond market

The 1998 law that created Tri-Town set the agency up to issue bonds to build on the base. But last year when it was time to seek $110 million in the bond market, potential investors balked at the risk.

“If this thing was ready to go two years ago, and I mean fully ready to go to the bond market, I don’t think they would have had a problem getting the funding,” said David Begelfer, CEO of the Massachusetts chapter of the National Association of Industrial and Office Properties. “Clearly, no one knew about how bad things were going to get.”

Tri-Town’s failure to raise money by selling bonds has frustrated LNR, Tri-Town’s main source of cash for the SouthField project.

So LNR in April stopped making its payments, which last year made up 78 percent of Tri-Town’s budget. LNR views the money – annual payments that grew from $400,000 in 2004 to $3.1 million last year – as a line of credit to Tri-Town to cover infrastructure costs. Just like that, there was no way to pay Tri-Town’s four-person staff orbond counsel. A deal was worked out after a three-month impasse, but it won’t prevent a similar standoff in the future.

AT A GLANCE

1,400: Total acres of the former South Weymouth Naval Station to be transferred from the Navy to Tri-Town, then to developer LNR Property Corp.
549: Acres transferred so far.
324: Amount of developable land currently owned by LNR Property Corp. Homes and a film production studio are planned for the land. Remaining acreage is protected open space.
2,855: Total residences to be built, a mix of single-family homes, condos and apartments.
2 million: Square footage of commercial space planned for the property.

Phase 1: 500 homes. First residents originally expected to move in during spring 2009. Construction has not started.
Phase 2: 800 to 1,000 residences and 300,000 to 650,000 square feet of retail and industrial space. It was expected to begin in 2010.
Phase 3: 300 to 800 residences and 300,000 to 700,000 square feet of commercial space. It was expected to start in 2014.

The issue raised several fundamental questions about the structure of Tri-Town and whether it can pull off one of the biggest development projects in New England.

The law that established the group allowed it to seek up to $110 million in bonds to foster development. This would mean annual debt payments of about $10 million. So far, there has not been anything approaching a revenue structure that could handle such debt. The debt load would be unusually large for a small town. Weymouth, which has seven times more households than the 2,855 that are planned for the base, pays $9 million a year in debt service.

Under the state law that established it in 1998, Tri-Town is supposed to make its bond payments with revenue from the taxing of base land. Even though LNR took title to 324 acres of the base in 2006, only in recent weeks has the state been given an outline that lays out how taxes would be determined.

A spokesman for the state Department of Revenue attributed the delays to Tri-Town’s small staff – four full-time employees and one part-time controller. He also said Tri-Town was at a disadvantage compared with cities and towns that have years of statistical data to help build revenue forecasts when setting tax rates.

James Wilson, a former Tri-Town chairman and chief financial officer in Weymouth, attributes much of the tax-plan delay to the Navy’s 2006 decision to seek $43 million for the base from Tri-Town rather than give the property away for free.

For SouthField, setting a tax rate is crucial because it shows prospective bondholders that there is revenue that can be counted on. It also establishes an expense for developers and potential tenants to know about before joining the project.

Bruce Steadman, president of the Plattsburgh (N.Y.) Airbase Redevelopment Corp.,said his agency avoided issuing bonds for its redevelopment of a base that closed in 1995. Banks and investors with the kind of money the agency would need would not see a reliable enough revenue stream to ensure that they would be paid back from the bonds, Steadman said.

“You have a start-up with no money with a promise to pay and no hard assets, except for some land,” he said. “If you’re sitting 500 miles away in a 35-story skyscraper, you look at that and say, ‘I’m firing this guy that brought this to my desk.’”

Steadman said Plattsburgh focused on getting smaller, piecemeal loans from local banks instead. Once momentum built, several moneyed players wanted to be involved.

“We thought, ‘We’re not going to hit any home runs; we’re going to hit singles and doubles,’” Steadman said.

At Kelly Air Force Base in San Antonio, Texas, overseers would not have been able to get the $30 million they needed to redevelop the base strictly from the bond market. The Greater Kelly Development Corp. secured federal loans that allowed it to make improvements that Boeing Aircraft wanted to see before becoming an anchor tenant. This created wider interest in the development.

“We did have to put up a lot at the front end,” said Rudolph DiLuzio, a Medford native who at the time ran the firm hired to be the support contractor for the San Antonio project. “We did a market analysis of what industries were expanding, what they were looking for, and how they matched up with what we had.”

One of the big differences between the successfully redeveloped bases and the Weymouth base involves the free transfer of military land. Base developers in Plattsburgh, N.Y., and San Antonio, Texas, received their base land – a total of 5,400 acres – for free.

In 2005, officials in Weymouth and voters in Rockland and Abington approved the SouthField development plan. But a base closure law that allowed the Navy to change how it handled closed bases had already passed. The Navy was now seeking “fair market value” for its property.

Tri-Town only expected to have to cover the costs of water and sewer infrastructure on the base – about $40 million – not the cost of the land as well. Suddenly, the Navy was seeking $43 million for the base land, mostly to recoup the cost of the environmental cleanup.

The project has been at a relative standstill ever since. A bill filed by U.S. Rep. William Delahunt seeks to allow the free transfer again, but it seems to have little momentum.
LNR says it has purchase-and-sale agreements with four commercial tenants who are waiting on the Navy transfer before closing their deals.

State Rep. Ronald Mariano said the current stalemate is regrettable, but he’s optimistic. “Tri-Town is doing as well now as it’s ever done,” the Quincy Democrat said. “Have we had missteps and setbacks? Absolutely. But by the same token, LNR has had setbacks and missteps. It was trial-and-error for a while there. But I think we’re on the right track.”

LNR Payments to Tri-Town’s budget

In 2002, Tri-Town hired LNR Property Corp. to be master developer of the Weymouth air base. Ever since, the company has helped fund a majority of Tri-Town’s operating budget, which previously was almost entirely supported by government grants.

LNR’s payments have grown significantly from year to year as Tri-Town has taken on more complex tasks, like environmental permitting, formulating a tax plan and attempting to enter the bond market.

LNR considers the money a line of credit that Tri-Town is responsible for paying back incrementally. Tri-Town board members have bristled at that interpretation, saying the agreement between the parties puts no timeline on when and how the money will be paid back.

The following contributions to Tri-Town’s budget reflect only a fraction of what LNR has spent on the project. The company says it has spent a total of $80 million developing SouthField. (Years below refer to fiscal years.)

2004 – $400,000
2005 – $477,907
2006 – $1,479,996
2007 – $2,794,485
2008 – $3,145,201

Source: Tri-Town annual reports

TIMELINE
A look at the protracted approach to redeveloping the former South Weymouth air base.

1995
South Weymouth Naval Air Station included on a list of sites to be closed under the Base Realignment and Closure law.
Oct. 1, 1997
Base closes after congressional vote. Navy buildings vacated one by one after a decommissioning ceremony.
1997
A 30-member Naval Air Station Planning Committee deals with a proposal by Mills Corp. to build a 2.1-million-square-foot megamall on the base. The plan fades away over the next two years as officials push for something other than a mall.
August 1998
The Legislature creates South Shore Tri-Town Development Corp. to serve as public overseer of the base redevelopment and to be in charge of bonding for the project. The legislation establishes a 20-year life for Tri-Town.
2001
After the mall plan is put aside, a more modest plan backed by MassDevelopment calls for office buildings and 500 to 700 units of housing for senior citizens. Local control issues complicate the discussion. Tri-Town seeks a waiver from the state to begin an initial phase of the project.
2002
In granting the waiver, the state’s then-secretary of environmental affairs, Robert Durand, calls for the development of villages with more housing, close to existing commuter rail service. That sparks a change in thinking at Tri-Town – one that moves the board away from both of the previous plans.
2002
A change in the Base Realignment and Closure law allows the Navy to seek “fair market value” for its closed bases.
October 2002
Tri-Town selects LNR Property Corp. to be master developer. LNR begins supplying capital to help Tri-Town operate. Tri-Town is responsible for governing LNR as it develops plans.
May 2003
Navy transfers, for free, 549 acres of the base to South Shore Tri-Town Development Corp. The transfer includes 324 developable acres. (The land would later be transferred to LNR. The Navy would also later seek “fair market value” for the rest of the base.)
September 2004
LNR unveils the Village Center Plan, a new master plan calling for 2,855 units of housing and incorporating principles of “smart growth,” a term used by community planners to describe developments that include a mix of residential and commercial buildings near existing transportation and utilities.
June-July 2005
LNR’s Village Center Plan and zoning bylaws are approved at town meetings in Abington and Rockland, and by the Weymouth Town Council.
December 2005
LNR files a Notice of Project Change with the state and is granted a waiver to allow some construction prior to acquisition of the entire base from the Navy.
2006
Navy begins to indicate it will seek fair market value for the Weymouth base instead of transferring it for free.
May 2006
LNR announces that it will call the redeveloped base SouthField.
November 2006
Construction begins at the base entrance on Route 18. Runway demolition follows. Construction of 250 condos, 160 townhouses and 90 single-family homes does not begin as expected.
March 2008
A deal calling for Tri-Town to pay the Navy $43 million for the rest of the air base is reached. The dollar figure includes the cost of an extensive environmental cleanup. Later in the year, Tri-Town fails to obtain money in the constricted bond market to pay for the deal. It later begins a push in Congress to get the land for free.
August 2008
The Legislature passes, and governor signs, a bill that extends Tri-Town’s life until 2053. The agency originally was to have dissolved in 2017, after full redevelopment of the base.
June 2009
Frustrated by a lack of return on its infrastructure investments, LNR holds back on annual payments to Tri-Town until the agency can demonstrate a “viable path forward.” Tri-Town says it will stop operating without the money. An agreement for payment in installments is reached.

MONDAY: Second in a three-day series

The board charged with redeveloping the site focuses on local interests, while agencies that successfully developed other bases take a more regional approach.

Intense local interests could hamper Southfield project in Weymouth

WEYMOUTH — The chairman of the board is a veteran firefighter. He’s flanked by a jovial real estate professional, a cranky banker, a stone-faced police officer and a cautious county treasurer. This is the group in charge of SouthField, one of the largest redevelopment projects in New England.

“We have a vested interest as residents, as opposed to having someone in the western part of the state (coordinating the project),” said Jeffrey Wall, chairman of the South Shore Tri-Town Redevelopment Corp.’s board of directors.

“The interest is there, and the concern is there, to ensure (the project) doesn’t impact communities adversely.”


Perhaps that’s the problem.
 Tri-Town, as the agency is known, has long faced an identity crisis as it pursues the massive redevelopment of the former South Weymouth air base. Members of the board need the regional vision it takes to pull off a project of SouthField’s size, but also a streak of provincialism to ensure that their towns get the maximum cut of the growth revenue.


“It is hard to reconcile those two things,” said state Rep. Ronald Mariano, one of the authors of the bill that created Tri-Town. “It was supposed to be a joint development, with the two entities working together to come up with a plan that works. With the changes that occurred in leadership on both sides, it’s been a series of stops and starts.”


In key ways, the board differs from other boards created to run military-base redevelopments.
 For one, the way the members were appointed was less than formal. It’s hard to learn much about them.
 Their résumés are not on file in their respective town halls. Rockland representative and police officer Gerald Eramo did not return phone calls to his home and the Rockland police station over a month-long period. The other board members spoke about their backgrounds to reporters, but none included any development experience. 


People with experience in successful base redevelopment say there is no cookie-cutter approach to forming a redevelopment board. But a consistent theme of success is running a base redevelopment agency like a business, not a protectionist local board.


“Step back and operate it like a business (because) the marketplace is who you really have to satisfy,” said Bruce Steadman, CEO of the Plattsburgh Airbase Redevelopment Corp. His agency turned a closed New York base into a mixed-use project that has produced $100 million in tax revenue in 10 years.


Since it was formed in 1998, Tri-Town has spent about $42 million on developing the base. No homes or commercial buildings have been built there yet.
 The results look much healthier at the former Fort Devens, which was developed by the quasi-public agency MassDevelopment. Devens went from primarily a military base to a thriving business center that, in 10 years, is 85 percent completed.


In attracting industry giants such as Bristol-Myers Squibb to the property, the Devens Enterprise Commission and MassDevelopment needed to call on people with backgrounds in development.
 “It’s always better talking to someone that knows the language,” said Kurt Macnamara, who developed the Devens Recycling Center on the property.
 Macnamara said it’s hard to be attracted to a base property if the oversight board members seem more oriented toward protecting their turf.


“It can get emotional for (board members) instead of factual,” he said. “That scares some companies. … to go into a town. They’re working off a completely different mindset.”
 Unlike Tri-Town, members of the Devens commission are appointed by the governor. Two Tri-Town members are appointed by the Weymouth mayor, two by Rockland’s Board of Selectmen and another member by Abington’s selectmen.

MEET THE PLAYERS 
BEHIND THE PROJECT



Local officials know SouthField could produce revenue for the base towns if they are awarded fire and police service contracts – or can sell their municipal water to the base property.
 Without these deals, the towns have little financial interest in seeing the project through to completion. Mariano said he wanted to change that, but he didn’t find the political support for it.


“The fact of the matter is for 10 years there has been no drain on any of the three towns for this property,” he said. “I think just token payments that would have to be dealt with yearly would have kept this development on the front burner for the three towns.”


The state legislation that established Tri-Town calls for board members to have some level of expertise in real estate development, finance, planning, engineering or municipal government.


The complexity of base development can easily seem overwhelming to board members, said Colin McPherson, an accountant and a former Weymouth representative on Tri-Town.
 “The process is just almost unbearable as a board member,” he said. “You can line up seven or eight agencies and the ninth agency can put a hold on (the project).”


Some stark contrasts with the makeup of Tri-Town can be seen at the former Kelly Air Force base in San Antonio, Texas.
 That base, marked for closure the same year as Weymouth, is seen as a model of how to take a closed base and turn it into a viable economic engine. Today it is the site of a healthy aerospace industrial park called Port San Antonio, with a nearly $3 billion annual economic impact on the city.

Texas legislators decided early to spread the authority for appointing people to the Greater Kelly Development Corp. All 11 San Antonio city councilors and the mayor would have appointments. The corporation hired a staff of 12 people and got to work. By 1997, most of the 1,900-acre property had been transferred out of Air Force’s hands. 


The board conducted a national search for an executive director, and it brought in someone who had done the job before.
 Bruce Miller is credited with the “Rickenbacker Renaissance,” which saw the closed Rickenbacker Air Force Base in Ohio transformed into an industrial area that attracted $500 million in investment.


That contrasts sharply with Tri-Town, which last year hired Kingston’s town administrator, a longtime local official, as its first CEO. Prior officials in similar top roles at Tri-Town included an engineering executive from Marshfield, a municipal development director from New Hampshire and a general manager with the regional chamber of commerce.


None had any achievements to their credit on the scale of a military base redevelopment.
 Steadman, the Plattsburgh Airbase CEO, said the real change at his base came when New York Sen. Ronald Stafford stepped in. The powerful official used his clout to install Daniel Wineke, a turnaround specialist who had reversed the fortunes of an ailing plastics manufacturer, to run the base development.


“It just had to be somebody who wasn’t a political animal,” Steadman said. “It was someone who came in and looked at it and said: ‘Here’s our product, here are our customers, and here’s how we’re going to market.’”


Reach Jack Encarnacao at jencarnacao@ledger.com.

TUESDAY: Third in a three-part series.
MassDevelopment’s conversion of the former Fort Devens northwest of Boston is just one of several examples of how an old base can put to productive use.

DEVENS: A base redevelopment formula that works

By ALLISON MANNING
The Patriot Ledger
November 17, 2009

DEVENS — Military personnel who lived at the former Fort Devens Army base wouldn’t recognize the Devens of today. There’s a vibrant center of town, with a hotel, a conference center and new construction. Residents and commuters visit the post office, go to the gym, fill up their cars’ gas tanks and grab coffee at Dunkin’ Donuts.
 Kids play lacrosse and Ultimate Frisbee fans compete in tournaments on the former base’s green fields.


Construction crews are finishing a $750 million Bristol-Myers Squibb pharmaceutical plant, which is to begin producing a rheumatoid arthritis drug in 2011. Several other businesses, including Anheuser-Busch, Procter & Gamble and Evergreen Solar, call Devens home.
 Golfers in carts drive across roads to the next hole at the highly regarded Red Tail Golf Club. “”


In the residential area, Colonial homes and small ranches, once used by military officers, are now renovated and occupied by about roughly 250 Devens residents. 


Not everything has changed, though. The Army still occupies 5,000 acres of the base for training and Reserve purposes. And other remnants of the base’s history remain, such as the Fort Devens cemetery.


The progress at Devens contrasts sharply with the empty hangars and boarded-up buildings at the former South Weymouth Naval Air Station. 


But Devens had several advantages in its explosive redevelopment, including having as its master developer a state-backed quasi-public agency.


Roughly 600 acres of the Devens property remains to be developed. The rest produces $3.7 million in annual revenue for the Massachusetts Development Finance Agency, also known as MassDevelopment.


The agency in charge of the South Weymouth redevelopment project, South Shore Tri-Town Development Corp., essentially started from scratch in 1998. The progress has been limited to some roadwork, land clearing and construction of a small building used for marketing.

Devens’ journey began in 1993, when the state Legislature designated an agency that later became known as MassDevelopment to be the principal developer, and appropriated $200 million to be spent over a 40-year period.

Back then, residents and officials figured it would take decades to develop the base. But 15 years later, the development is almost complete.


“MassDevelopment, in the end, had access to considerable resources,” said Lucy Wallace, a member of Harvard’s board of selectmen who was on her town’s planning board in the 1990s. “They were borrowing with the Commonwealth of Massachusetts backing up their borrowings. That’s a pretty good way to go to the bank.”


MassDevelopment can provide low-interest bonds to developers; the typical municipality can’t.

But Devens isn’t perfect. In 1994, Ayer, Harvard and Shirley voted on the 40-year reuse plan for the base. (The Army still controls most of the base land in Lancaster, for training purposes.) The towns essentially gave up their rights to decide what businesses would go in their back yards, and that meant they would forgo development revenues. But it also means they were freed from the demands of revitalizing the massive property.


The reuse plan they approved defines a number of development and residential zones. The development zones include manufacturing, distribution, innovation and technology.


And while Devens residents pay taxes to MassDevelopment, they don’t vote for the officials that make their local governing decisions.


“It’s not exactly taxation without representation,” MassDevelopment Chief of Staff Meg Delorier said, noting that residents vote for the governor, who appoints the 12-member Devens Enterprise Commission.


The commission acts as the planning board, zoning board of appeals, board of health, conservation commission and historic district commission.


The towns still wield some power with the reuse plan, which cannot be changed unless all of the towns agree. MassDevelopment, which would like to add housing stock in the Vicksburg Square area of the base, has been unable to change that area’s zoning because of resistance from Ayer. There are 102 housing units, and MassDevelopment is limited to a total of 282 by the reuse plan.


The biggest challenge for the redevelopers has been branding an expanse of land that for decades was known as Fort Devens – a place physically and psychologically sealed off from the surrounding towns. 

But business managers at the former base said they have been happy with MassDevelopment’s pro-business stance, bonding opportunities and quick 75-day permitting process.


“They really get it,” said Kurt Macnamara, principal developer of the Devens Recycling Center. “It’s an opportunity to build the perfect town.”



Allison Manning may be reached at amanning@ledger.com.

AT A GLANCE

$3.7 million
Annual revenue to MassDevelopment each year through taxes

$750 million
Cost of Bristol-Myers Squibb pharmaceutical plant, set to begin producing a rheumatoid arthritis drug in 2011

250
Residents live in renovated homes, once used by military personnel

5,000
Acres the Army still occupies for training and Reserve purposes

Posted in Article | Comments Off on Weymouth’s SouthField project still stuck on the runway

A grand studio dream runs headlong into reality

For Plymouth Rock team, money woes, questions crowding out hopes

Boston Sunday Globe
November 15, 2009
This story was reported and written by the Globe Spotlight Team, reporters Scott Allen and Marcella Bombardieri and editor Thomas Farragher.

David P. Kirkpatrick seemed to relish the role of big-shot Hollywood insider as he briefed state development officials about his bold plan to challenge Tinseltown at its own game. And the former head of Paramount Motion Pictures certainly sounded like the right man to build a huge movie and TV studio in Massachusetts. He talked about how he helped bring “Forrest Gump’’ to life. He casually referred to Brad Pitt and Jennifer Aniston as “the kids.’’

By the time Kirkpatrick left that first meeting in August 2006, state officials were practically ready to break out the champagne, according to two people who were there. A few months later, the state dangled the prospect of more than $100 million in tax breaks and other benefits to Kirkpatrick’s team.

So began one of the most buzz-generating projects in recent state history, a $650 million plan to build 14 sound stages and a virtual entertainment city in the woods of Plymouth, making Massachusetts the production center for countless movies and TV shows. Plymouth officials have scrambled to help Plymouth Rock Studios create the 2,000 studio-related jobs the company predicts, while people mobbed job fairs to chase their dream of making it in show business.

But a look behind the breathtaking vision of Plymouth Rock Studios reveals a project marred by over-the-top claims, broken promises, legal infighting, and the chronic lack of one crucial ingredient: money.

A Globe Spotlight Team investigation has found that, despite their cultivated image of Hollywood know-how and deep pockets, Kirkpatrick and his oft-changing cast of partners never obtained nearly the resources to build one of the world’s biggest studios. Members of Kirkpatrick’s group have been sued at least 11 times in the past three years by writers, investors, consultants, and others who say they weren’t fully paid. Kirkpatrick and his various collaborators were so desperate for funds that they turned to dubious sources for help, including a convicted embezzler and an obscure Florida financier whose former business partners were recently sentenced to prison.

Among the Spotlight Team’s findings:

■ Kirkpatrick’s own backstory goes way beyond what he publicly shared with Plymouth townspeople. He lost virtually all of his wealth over the last decade. On the day that he shared celebrity gossip with Massachusetts officials, he was going through a painful personal bankruptcy in Los Angeles and had given up his mansion for a small rented house in a working-class neighborhood. The once-powerful Paramount executive had been reduced to making small-time videos – “Merry Christmas Babies’’ sold 23 copies – and relying on a loan from his mother in Worcester to make ends meet, court records show.

■ It’s not clear whether Kirkpatrick’s team even owns the studio project. Kirkpatrick’s former partners in the sprawling Plymouth plan – a group of prominent businessmen who hoped to use films to project their Christian faith – allege in a 2008 lawsuit in Los Angeles that he stole the proposal from them during a time that they were in financial distress. The group, called Good News Holdings, had set up a field office in Plymouth, but, when Good News ran out of money, Kirkpatrick split and formed a new studio company. Plymouth Rock officials deny wrongdoing, but, in materials for potential investors, they warn that they may face more lawsuits over ownership of the studio.

■ Kirkpatrick tried to buy out his Good News partners and finance the studio plan with money from an investor who had recently served four years in prison for embezzlement. Kirkpatrick said he did not know that George Thomas Bobbitt had confessed to stealing money from his clients. But Kirkpatrick helped keep Bobbitt’s identity a secret for some time – describing Bobbitt to his partners as a man who wanted to remain anonymous – making it difficult for others to discover Bobbitt’s criminal record. The deal fell through after Bobbitt was unable to produce the funds he told Kirkpatrick he had tucked away in the Bahamas.

■ Last week, Plymouth Rock abruptly severed ties with its latest would-be financial backer, Prosperity International LLC of Florida, after the Spotlight Team began raising questions about Prosperity’s claims in marketing materials about its track record and resources. The company, which had approved a $550 million construction loan to the studio developers, has falsely claimed credit for projects it has not been associated with. It is run out of a rented house near Disney World by a man who has been through bankruptcy himself.

Cancellation of the Prosperity loan leaves Plymouth Rock scrambling when it was already struggling to pay the bills. The Plymouth Rock team has raised just $11 million so far. It has spent $15 million, leaving it millions behind in payments to consultants who are trying to get the studio off the ground. Now, the long-awaited groundbreaking for the studio is in limbo as Plymouth Rock tries to line up new funding.

“We want to get the project done,’’ Kirkpatrick said in an interview in his brick-walled office in Plymouth’s Cordage Park last week. “Right now our word is ‘persist.’ ’’

The story of the Plymouth studio project has always been a study in optimistic public predictions while, behind the scenes, major players struggled to keep the project going, and sometimes fought among themselves. Since Kirkpatrick’s initial visit to Massachusetts in 2006, he has parted bitterly with at least five collaborators – from the Fitchburg businessman who introduced him to Massachusetts officials to the Good News team to best-selling novelist Anne Rice. Rice had planned to sell Kirkpatrick the rights to her novel “Christ the Lord,’’ which Good News executives were counting on to show that the new company was a force in movie-making. But Rice angrily withdrew when he didn’t pay her.
“David, you broke my heart,’’ she wrote in a scathing e-mail, obtained by the Spotlight Team.

The major constant through the three-year project has been Kirkpatrick himself, who rose from lowly story analyst to become the top movie executive at one of Hollywood’s leading institutions. The charismatic Kirkpatrick has been the face of the Plymouth studio from the start. But he makes little mention of his career’s steep decline since he was ousted from Paramount in 1991. Even some former business partners at Good News said they didn’t know Kirkpatrick had gone through bankruptcy. As far as they knew, Kirkpatrick was still a movie mogul who had accepted Jesus Christ as his savior and wanted to devote his career to creating family-friendly entertainment.

Kirkpatrick would be the first to admit that the movie business can get nasty. He estimated that he was typically sued three times for every movie he produced. And he argues that the twists and turns of the Plymouth Rock Studios project are not out of the ordinary. His bankruptcy, he said, was forced on him when the company that financed his independent movies reneged on commitments, leaving him to pay the bills.

The failure of Good News Holdings, he said, was typical of most start-up companies and not his fault. He insists he did tell the other Good News executives about his bankruptcy and tried to keep the company going even when it could no longer afford to pay him and other employees.

Moreover, Kirkpatrick’s current collaborators say his past conflicts are irrelevant to what they’re trying to achieve. The Plymouth Rock team, a mix of Hollywood veterans such as Earl Lestz, who led the refurbishing of Paramount’s studios, and Boston businesspeople such as former Boston Celtics executive Joseph G. DiLorenzo, say Kirkpatrick is the creative leader, but not involved in day-to-day decisions anymore. He’s just one of 27 employees.

DiLorenzo argues that the studio has only two real financial problems: a weak economy and the failure of the state and Governor Deval Patrick to come through with financial support. The state’s decision in June not to grant the studio $50 million for roads and other infrastructure was a particular blow, he said, because the studio had worked so hard to make its case. “We have not accepted their explanation’’ for the rejection, DiLorenzo said. Patrick administration officials said last week that the state still wants to aid Plymouth Rock – if the studio comes up with long-term funding first.

A rocky path

Griffin Mill is no role model. The lead character in the 1992 Hollywood send-up “The Player’’ is a heartless, scheming studio executive who crushes hopes and attempts to cover up his accidental killing of a writer. But David Kirkpatrick delights in saying how much Mill resembles him. They dress a lot alike, although he acknowledges that the actor who played Mill, Tim Robbins, is taller. In the past, Kirkpatrick even suggested legendary director Robert Altman had based the character on Kirkpatrick’s career at Paramount, though he now says Altman was just teasing.

Kirkpatrick has always portrayed his career in grand terms, claiming that, as a studio executive, he oversaw more than 200 motion pictures that won 163 Academy Awards and grossed more than $10 billion at the box office. It is a list which includes such mega-hits as “Top Gun’’ and Eddie Murphy’s “Beverly Hills Cop’’ (He was Murphy’s chief handler for years at Paramount). But the list also includes movies such as “Forrest Gump,’’ which was green-lighted by Kirkpatrick’s successor at Paramount and came out three years later. “Mr. Kirkpatrick had nothing to do with it,’’ said a producer who was involved in the project from its inception. Kirkpatrick says it’s fair to take credit because he bought the rights to the story on which the movie was based.

For years, he lived in a world of six-figure bonus payments that afforded him a mansion on North Rodeo Drive in Beverly Hills and a white Cadillac that Harrison Ford called his “Reverend Ike’’ car, Kirkpatrick once told The New York Times. For a decade, he said, he never saw the inside of a grocery store.

But Kirkpatrick’s star dimmed after he lost the Paramount job in a 1991 corporate reshuffling. He had some success as an independent producer, but he struggled to raise money and got into expensive legal skirmishes. The big blow came when the German company that financed his movies collapsed. Kirkpatrick won a $3.6 million judgment against the company in 2003, but they never paid him. He had to sell the mansion and, when that wasn’t enough, he filed for bankruptcy.

Some of the biggest losers in Kirkpatrick’s financial meltdown were the people he hired to write, edit, produce, and appear in his various failed projects. Bankruptcy and other court files detailing Kirkpatrick’s financial distress are thick, and the trail of unpaid creditors is long, telling the story of collaborators dazzled by Kirkpatrick’s big-studio pedigree and then left holding the bag.

“He’s been floating around the country playing off his big-studio image,’’ said veteran director and editor Scott Miller, adding that he was never paid the $35,000 or more Kirkpatrick owed him for directing a basketball video in 2004. “In 35 years, this is the only man who stiffed me and stiffed me in such a vulgar way.’’

Kirkpatrick recalls his bankruptcy as “a very tough and humbling experience,’’ but he believes it contained the seeds of a better life, a chance to see “what’s important and valuable.’’ In the midst of bankruptcy, Kirkpatrick began working with a group of Christian businessmen who were eager to offer an antidote to the shallow values of Hollywood. Kirkpatrick, who said he once considered the seminary, told his new collaborators that he wanted to share their vision of spiritually uplifting books, movies, and even cellphone messages. “Spiritainment’’ they called it.

On March 21, 2006, Kirkpatrick was professionally reborn. He became one of six cofounders of Good News Holdings, and he began planning his comeback from an office building on the outskirts of Los Angeles. Soon enough he was setting his sights on Plymouth.

‘Spiritainment’

This much is true: Good News Holdings did not let Christian humility get in the way of self-promotion.

In March 2007, under Kirkpatrick’s guidance, the company bought a seven-page advertisement starting on the cover of Daily Variety magazine announcing that they were on a quest to feed “audiences’ hunger for a higher vision.’’ A serene-looking Kirkpatrick promised that his company would soon begin filming “Christ the Lord: Out of Egypt,’’ based on the best-selling book by Anne Rice, a born-again Christian who wrote “Interview with the Vampire.’’

Never mind that Good News had no way to pay for the $263,420 advertising package – those bills still haven’t been paid. Good News had less chance of finding the $40 million Kirkpatrick estimated that it would cost to film a movie about Christ on location in Israel. But the publicity of the Kirkpatrick-Rice alliance was valuable, boosting the company’s profile as it prepared to raise funds for its own movie studio in Massachusetts.

Rice withdrew from the “Christ the Lord’’ project a few weeks after the ads ran because, she said, Kirkpatrick repeatedly rebuffed her requests for payment and did not seem to be preparing for movie production. She fired off a scorching e-mail after he began writing her letters that, she felt, were an attempt to bully her.

“As I look back on it now, the entire enterprise on your part looks like a scheme,’’ Rice wrote in an e-mail in May 2007. “Did you have some idea that you could draw me deeper and deeper into the project and then make a demand on me for funds?’’ Kirkpatrick said that the split with Rice was painful, that he eventually attempted to pay her, but too late. Rice, reached by e-mail, declined to comment.

The spat with Rice reflected deepening money problems. By late summer 2007, Good News faced 10 lawsuits from creditors and employees who said they had not been paid. Yet, even as Good News withered, planning for their biggest project – the Massachusetts movie studio – ramped up. The team scouted locations by helicopter, rented office space in a renovated factory in North Plymouth, and held a lavish party where local residents brainstormed ideas for the studio. At least one key Good News executive, CEO Christopher Chisholm, began planning to relocate his family from California to oversee the project.
At the same time, Kirkpatrick started to break away from his original partners in the studio project.

First, Kirkpatrick split from the Massachusetts businessman who had introduced him to state officials, saying Good News could handle the job without him. Mark Panagiotes of Fitchburg, who initially proposed the Massachusetts studio under the name “Bay State Studios,’’ hired attorney R. Robert Popeo to take legal action over being squeezed out. Panagiotes agreed to a financial settlement that neither side can discuss because of a confidentiality agreement.

Next, Kirkpatrick started to pull away from the financially troubled Good News. He got a seemingly perfect opportunity in October 2007 when a man approached Kirkpatrick after hearing a speech he gave at televangelist Pat Robertson’s Regent University in Virginia. George Thomas Bobbitt, whose wife was a film student who dreamed of owning her own studio, told him that God had called him to invest $200 million in Kirkpatrick’s vision.

Bobbitt, a man in his 50s who lived in campus housing and drove an old car, seemed an unlikely major investor, but Kirkpatrick and a fellow Good News founder wasted little time flying Bobbitt to Plymouth for him to learn more about the studio, which then was called “Project Julia.’’ Bobbitt eventually agreed to buy Good News Holdings for $14.4 million and put up many millions more for the studio from bank accounts he said he had in the Bahamas.

It turned out that Bobbitt was a former tax and investment adviser in Kentucky who went to prison in 1998 after pleading guilty to 13 counts of misappropriating at least $600,000 of his investors’ funds.

But the other officials at Good News Holdings did not know immediately that they were being asked to sell out to an embezzler. Kirkpatrick told them the buyer wanted to remain anonymous, and he helped set up a Delaware corporation – called “Whitney Investment,’’ after Bobbitt’s wife – so that Bobbitt could buy Good News without revealing his name. Eventually, Kirkpatrick did tell the Good News officials that the buyer was Bobbitt. Good News officials declined to comment publicly because the matter is the subject of an ongoing legal fight.

Kirkpatrick now says he did not know about Bobbitt’s criminal record. “It was very, very difficult to get true information from this man because he was very secretive,’’ Kirkpatrick explained. Kirkpatrick said the other officials at Good News, not him, should have done a background check on Bobbitt. “Due diligence was not appropriately done,’’ Kirkpatrick said, and, as a result, Good News agreed to sell to a felon whose money was suspect.

But Bobbitt’s wife said she told Kirkpatrick as well as his close ally at Good News, Thomas Black, that her husband had a criminal record and that she did not know whether the supposed fortune in the Bahamas was real or legally acquired. Whitney Wright, who has filed for divorce from Bobbitt, even sent Kirkpatrick a screenplay she had written about Bobbitt’s life, from his service in Vietnam to his imprisonment for what she believed were trumped up charges.

Kirkpatrick’s response to the script, called “Target Man,’’ was effusive and appeared to raise no questions about his would-be investor. “What a powerful piece ‘Target Man’ could be to transform lives,’’ Kirkpatrick wrote to Wright.

Today, Kirkpatrick acknowledges reading the screenplay, but denies that Wright told him about her husband’s criminal record. The sale fell apart because Bobbitt failed to produce the funds he claimed to have. But Kirkpatrick found another way to break free of Good News. He incorporated a new Plymouth movie studio company at the Massachusetts secretary of state’s office along with a new partner, Joseph DiLorenzo, and Good News cofounder Black. When Good News expired, leaving people unemployed, Kirkpatrick announced that a new company was in charge and that he had split with his former partners. He changed the project’s name from “Project Julia’’ to Plymouth Rock Studios and said it would have no religious connections.

Today, Kirkpatrick and DiLorenzo say they’ve done nothing wrong. Kirkpatrick contends that Good News essentially laid him off when they stopped paying his salary in early 2007, freeing him to pursue separate business interests.

“Good News Holdings had nothing to do with Project Julia,’’ said Kirkpatrick.

However, in a Los Angeles courtroom, the major investor in Good News Holdings takes a dim view of Kirkpatrick’s behavior. Brazilian millionaire Washington Cinel argues that Kirkpatrick stole the studio project by first pressing Good News to sell out to a felon, and, when that fell through, spinning off the studio to a separate company.

Kirkpatrick called the Cinel lawsuit a “rat’s nest’’ of charges and countercharges among former owners of Good News and insists that no one stole anything. In any event, he said, Cinel only wants back the $2.25 million he invested. Plymouth Rock financial documents, however, warn potential investors that more Good News officials may sue over the “misappropriation of a corporate opportunity.’’ It’s a legal phrase, alleging theft of the studio idea.

Wooing Plymouth

When Plymouth’s Town Meeting convened in October 2008 to pass judgment on Plymouth Rock Studios executives’ grand proposal to bring to town what they called “Hollywood East,’’ the results of the vote were a foregone conclusion. But the studio didn’t skimp on pageantry.

“For us at Plymouth Rock Studios this is all about our kids,’’ declared Kirkpatrick. “There is nothing more extraordinary than the wonder of making stories, making pictures.’’

The lights went down and the video rolled. TV personality Leeza Gibbons smiled on the people of Plymouth, reminding them, “You all are so fortunate that you have right in your midst . . . a brand-new Hollywood.’’

Then came a brief review of the plan and a montage of classic film scenes set to soaring music, ending with Judy Garland and her companions skipping down the Yellow Brick Road. Soon, it was time for Plymouth’s town meeting members to debate tax breaks and re-zoning a golf course for 2 million square feet of sound stages, office space, retail businesses, housing, and a hotel.

Except there was no debate. Members voted to cut off discussion before it started, and hoots and applause filled the hall. Although much of Plymouth is eager for all that Plymouth Rock Studios has promised, a quiet minority believes town officials have been too star struck to question the background of Plymouth Rock Studios’ principals, their financing, and any risks the development might bring.

“A lot of their support has been this blind, optimistic, ‘Yes, it will be a wonderful thing – we need jobs, we need jobs, we need jobs, and who are you to stand in the way of this?’ ’’ said Bill Abbott, an attorney who was among only three dissenting votes on the studio at Town Meeting.

Studio officials said they had tirelessly attended more than 400 meetings in Plymouth to address everyone’s concerns, and they pointed to the nearly unanimous approvals they have received from various town bodies, including landslide support in a nonbinding referendum last year.

“Sometimes [development is] not pretty,’’ said Kevin O’Reilly, studio spokesman. “We were able to come to an end result that everybody was happy about.’’

Not everybody. Some say the studio has not lived up to its promises. For example, last year, studio officials hailed their creation of Rock CGI, a computer graphics company that they projected would employ 200 graphic artists by the end of 2008, at annual salaries between $75,000 and $250,000. Now, the officials say they dropped Rock CGI from their plans because it would have distracted from building the studio.

Meanwhile, the studio’s supporters have been treated to a taste of Hollywood glitz, while dissenters have felt the occasional sharp elbow. When two Planning Board members wrote a memo saying the town was rushing to wrap up negotiations prematurely under “the crushing schedule’’ imposed by the studio, Kirkpatrick railed against the authors for a “preconceived bias that is disturbing.’’ Town Meeting soon followed his cue and voted to reduce the Planning Board’s ability to oversee the project.

When two Plymouth residents circulated material about Kirkpatrick’s background and the troubles at Good News Holdings, they received letters from the project’s lawyers, accusing them of “libelous statements.’’ When a screenwriter who said Kirkpatrick owed him $36,000 wrote an article for Boston Magazine, Good News Holdings’ lawyers threatened legal action, saying he was violating his nondisclosure agreement. The article never ran.

In June, Plymouth attorney Jerry Benezra sent a package about Kirkpatrick’s bankruptcy and legal troubles to the state agency considering a grant for the project. Not long after, Benezra received an anonymous letter with an ominous, cryptic message. “Jerry,’’ it read, “we smell you.’’

It included a photocopy of an e-mail between state officials regarding Benezra’s submission. Somehow, within five days of that e-mail being sent, it wound up in the package sent anonymously. Both the studio and state officials say they don’t know how it came to be in outsiders’ hands.

Meanwhile, the studio has shown its appreciation for its biggest backers. Dick Quintal, chairman of the Board of Selectmen, says he sees paving the way for the studio as his legacy.

Quintal accompanied studio CEO Earl Lestz earlier this year to the Producers Guild of America annual awards in Hollywood. Quintal, who said he paid his own way, eagerly shared snapshots of fountains and backlots at Paramount, where Lestz once oversaw the physical plant.

“They’ve got a track record,’’ he said. “I can pretty much tell somebody the minute I meet them if they’re real.’’

Quintal has known for some time about Kirkpatrick’s bankruptcy and several of the lawsuits against him. And he accepted Kirkpatrick’s explanations.

“I didn’t pay no attention to that,’’ he said. “That’s none of my business.’’

Financing crisis

If town officials did little to take the true measure of the man behind the studio, Kirkpatrick’s lieutenants were hardly rigorous as they examined the track record of its latest would-be financier.

Just weeks after the studio popped champagne corks in late September to celebrate a $550 million construction loan from Prosperity International LLC of Orlando, Fla., the deal went bust. It was an embarrassing and potentially crippling collapse that even a modest amount of corporate diligence may have averted.

The Spotlight Team’s investigation found that Prosperity principal Michael F. Burgess has a record of unmet promises and false or misleading claims. The warning signs for potential customers were ample. Consider:
■ Burgess claims his firm helped fund $117 million for the first phase of Orange County National Golf’s resort complex in Florida. That’s false, according to Bruce Gerlander, the golf center’s general manager. “They have certainly not been involved in any development or funding here,’’ Gerlander said. After the Globe’s inquiries three weeks ago, Burgess promised to remove the claim from his website. As of yesterday, he hadn’t.
■ On his website, Burgess claims his company helped finance the renovation of a historic hotel in Nashville. The Miami-based group that finished that hotel’s renovation in 2007 said it had never heard of Prosperity International. Turns out the project listed as Prosperity’s work was done by a separate company for which Burgess worked in 2003 – a year before Prosperity was formed.
■ When Prosperity emerged last year as the chief financial supporter for a plan to redevelop a former sports arena in Memphis, civic officials there did something Plymouth Rock Studios did not. They hired a former FBI agent to do a background check on Prosperity. And then briskly walked away.

“They couldn’t give us a banker that we could follow up with, the name of a lawyer, the name of a corporation that they’ve done work with,’’ said Scott Ledbetter, chairman of a Memphis committee formed to redevelop the 20,000-seat Pyramid Arena.

Before his deal with the studio crumbled, the Globe asked Burgess to identify a single successful Prosperity project in the United States. He cited Ravallo Resort in Orlando, which, according to Prosperity, “is a 5-star resort in Lake Buena Vista, Florida.’’

On Prosperity’s Web pages, Ravallo exists as a sleek, luxury destination of palm trees and hotel towers. In fact, the Ravallo Resort is a vacant lot, as its developer waits for Burgess to come through with the construction loan he promised would arrive in June and multiple times since.

Timothy J. Hadley, the studio’s senior vice president for legal affairs, told the Globe in early November that the studio had fully vetted Prosperity’s background, but the corporate scouring did not include examining Ravallo, Prosperity’s most prominent domestic project.

Still, Hadley said, the studio was aware of some of Burgess’s background, including the personal bankruptcy he declared in 1995 and the imprisonment this year of his former business partners – a father-son team who were Burgess’s associates in a firm separate from Prosperity. They were sentenced in May for an elaborate bank fraud scheme as representatives of yet another firm with which Burgess was not associated.

Since the studio severed ties with Prosperity last week, Burgess has not responded to requests for comment. In an earlier interview with the Globe about his track record, however, he was unapologetic. “Always people are trying to damn everything people do that has success all over it,’’ Burgess said. He promised that he would deliver for Plymouth Rock.

The day after the studio concluded that he couldn’t – leaving the project in a hard place – Kirkpatrick seemed to have lost a bit of his Hollywood sparkle. He tapped out we-shall-survive e-mails to studio supporters. He politely greeted visitors to his austere, bright office in Cordage Park. And he serenely sought to explain away the three-year trail of missteps and missed deadlines left by his plan to bring movie magic to Massachusetts.

“It’s certainly a bump in the road,’’ Kirkpatrick said about the Prosperity debacle.

He said he is not a man without regrets. He mourned the loss of his friendship with a literary luminary like Anne Rice. He said he hoped the legal dispute surrounding his project can move toward mediation and settlement.

“It’s really brutal and it’s really sad,’’ the once and would-be movie maker said.
And then Kirkpatrick returned his attention to the most critical remaining task. He’s trying once again to find the money to build his studio.

“We’re going to try to persist and drive through this,’’ he said. “We do have some alternatives that we’re looking at right now. And we are hopeful and optimistic that those might emerge.’’

Globe correspondent Kathryn Harris contributed to this report from Southern California.

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Editorial: Find a new script

Boston Herald Editorial Staff
November 14, 2009

It’s a pity the developers of a major film soundstage project planned for Plymouth have lost their financing, just as the commonwealth’s profile as a go-to state for movie productions is on the rise.

But neither the developers nor their supporters on Beacon Hill ought to get any ideas about taxpayers stepping into the breach.

At this point the Patrick administration has said that it has had discussions with the developers of Plymouth Rock Studios only about “whether there are other ways through other programs that we might be able to provide some assistance on public infrastructure,” according to the State House News Service.

Low-cost loans, maybe, that could be important as the studio seeks to secure another comprehensive, private financing deal?

And Gov. Deval Patrick’s secretary of administration and finance, Jay Gonzalez, told the News Service that any state support would only be “a small piece” of the funding the developer needs.

We’ll hold him to it.

That’s because around here when the words “taxpayer dollars” and “movie soundstage” are used in the same sentence, we have flashbacks to that disastrous effort to build a publicly financed facility at Bunker Hill Community College back in the ’90s – the very definition of a boondoggle that was all about buying union support and making money for the Teamsters.

The state rejected an earlier request for $50 million for this Plymouth studio project through a special state borrowing program, saying it wouldn’t generate enough in tax revenue to justify the investment. But as the movie business starts to pick up even more, could there be a temptation to capitalize on it, at further expense to the taxpayers?

This project has terrific potential and we wish the developers well in putting a deal together. But by heavily subsidizing film production costs, the taxpayers are already doing their fair share.

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Ads reap tax credit benefits, too

METRO – Boston
November 12, 2009

Ben Affleck’s new movie isn’t the only production to choose Boston for shooting. Now, some of America’s biggest brands are choosing Boston and Massachusetts to shoot national ad campaigns. With the Bay State offering a generous 25% tax credit on all commercial production budgets, ad agencies and brands are lining up to take advantage.

LA may have the warm weather, but we have the cold cash.



One such big brand is John Hancock, a household name in the financial services industry. Kathy Kiely, President of The Ad Club, sat down on the “Big Orange Couch” with Jim Bacharach of John Hancock:


Tell us about this new advertising campaign.

It’s called the ‘Cursor Campaign,’ and it portrays people having conversations about personal financial concerns. These conversations used to take place in person but now quite often occur electronically via email and IM. We knew the issues being discussed and the medium would resonate well. It launched last year and this fall we’ve extended it – in television, print and online. Our longtime ad agency Hill Holliday created the campaign for us.



Where did you shoot the commercials?

We filmed throughout the Boston area… a South End cafe, a Cambridge office building and a rail yard in Hyde Park.



How did the Massachusetts tax credit help your ad campaign? 

I had heard about the film tax credit, but learned how well it applied to commercials during a presentation by the MA Film Office. The credit got the conversation started. We started thinking about the wide variety of locations available here. The depth and breadth of production talent and resources quickly became clear and the opportunity to support the local economy was the clincher. Applying for the credit was painless and I think that looking ahead we will always think of Massachusetts first for shooting our commercials.



What does a production like this do for the local economy?
You’d be amazed at the number of people who are involved in the production of a 30 second commercial. We hire dozens of people, and there are also the local services that we purchase, such as transportation and supplies. Not to mention all the restaurants, hotels, and tourist destinations that get extra business.



Anything interesting or surprising happen on set? 

We were on location in the South End and passersby began to collect. Behind us an argument broke out. One person was adamant that this was Ben Affleck’s set. The other person argued that this had to be Tom Cruise’s set because it was “so Tom Cruise.” We didn’t want to burst their bubble.


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Hollywood East TV: Studio exec responds to loan setback – Nov 09

November 12, 2009 – Plymouth Rock Studio’s Bill Wynne addresses the news that the agreement with their senior lendor has been terminated.

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SENATE PREZ CALLS STUDIO TROUBLES ‘DISAPPOINTING,’ REITERATES SUPPORT

State House News Service
November 11, 2009

Senate President Therese Murray said the cancellation of a $550 million loan that leaves the future of a planned movie studio complex in her hometown “disappointing” Wednesday, but sounded a note of optimism that the project would draw new financing.

“There is still wide-ranging support and expectation for this project,” Murray said in a statement, a day after learning that Plymouth Rock Studios had nixed its deal with Prosperity International. Studio officials said they were looking for new financial backers, but said a timetable, which had called for groundbreaking early next year, was uncertain.

“Like any development project, it is a difficult process,” Murray said. “And it is up to the studio now to go out and find other financing. With the possibility of the economy improving, and the project’s ability to generate short-term and long-term jobs, the community remains hopeful that there are other lenders who will see the great value of this project.”

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‘Hollywood East’ nixes loan deal

By Greg Turner
Boston Herald
November 11, 2009

Plymouth Rock Studios’ financing script needs a rewrite.

The developer said yesterday that it canceled a $550 million construction loan agreement and will have to find financing elsewhere for its ambitious project.

Plymouth Rock said its lender, Florida-based Prosperity International, failed to meet a Friday deadline for certain paperwork and other guarantees.

“It definitely slows the project down a bit,” said Kevin O’Reilly, a spokesman for the project. “One of the good things is that the principals have been talking to other lenders and they’re hoping that something will materialize.”

The deal with Prosperity International, which could not be reached for comment, was announced Sept. 24.

The developers – a team of film executives from California – envision “Hollywood East” in Plymouth, a 1.3-million-square-foot complex with offices, shops and 14 sound stages for film and TV production.

With state and local regulatory hurdles cleared in recent weeks, the project was moving steadily toward a groundbreaking at the 242-acre Waverly Oaks golf course property within about 90 days.

Now that’s delayed indefinitely.

“We’re definitely not back at square one, but in terms of financing – I don’t want to say we’re starting over, because we have been talking to other lenders,” O’Reilly said, “but this one just wasn’t going to work.”

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Plymouth studios project on hold

Funding collapses as company cuts tie to financial backer

By Thomas Farragher
Boston Globe Staff
November 11, 2009

Just weeks before its scheduled groundbreaking, Plymouth Rock Studios said yesterday that its construction funding has collapsed, raising serious questions about the future of its plan to bring a major film and television production facility to the woods of Plymouth.

The studio, in a surprise announcement, said it was severing ties with a Florida firm that was to finance its $550 million plan to transform 240 acres of what is now the Waverly Oaks Golf Club into “Hollywood East.’’

News of the financial turnabout comes just a week after the Globe began making inquiries about the background of the studio’s would-be financier, Prosperity International LLC, of Orlando, Fla.

Studio officials said they had fully investigated Prosperity and were comfortable that it could fulfill its promise to deliver a half-billion-dollar loan amid treacherous economic times.

“We feel like we were very fortunate, in light of the storms going on in the capital markets, that we were able to land a deal such as the one that we have with Prosperity,’’ Bill Wynne, president of the studio’s real estate arm, said in an interview last week.

But yesterday, the company’s comfort level with Prosperity had evaporated.

“The lender was required to meet a milestone on November 6 and has failed to do so,’’ the studio said in a prepared statement. “Consequently, [the studio] exercised its contractual right to cancel the agreement.’’

The studio said it is now attempting to arrange alternate funding and suggested that the improving economy might enable them to make a better deal.

“With the current economic indicators showing improvement, our decision is in the long-term interest of the project, our shareholders, our strategic partners, and our many other constituents, including the town of Plymouth and the Commonwealth,’’ Wynne said in a prepared statement.

A spokesman for the studio would not elaborate beyond the studio’s statement. He said studio executives would not make themselves available to respond to questions last night.

Before yesterday’s announcement, studio officials said they were weeks away from buying the golf course for about $16.5 million. The deal was set to close in December, about the time they had hoped to begin work on a $50 million access road.

The studio project has raised high hopes on the South Shore, where people have packed studio-sponsored job fairs and officials have projected that more than 2,000 high-income employees would staff the sprawling project of 14 soundstages, a 10-acre back lot, and post-production facilities for movies and television shows.

Studio officials said last week that a broker had recommended Prosperity International and that they had spent months making sure the deal was secure and that the interests of the studio project were fully protected.

Timothy J. Hadley, the studio’s senior vice president for legal affairs, said one of the largest law firms in the country helped the studio with its vetting of Prosperity. “So that gives us a good amount of comfort when you enter into these transactions,’’ Hadley said last week. “[We] made the appropriate changes that you would to shift risks in the product. A lot of comfort comes from that.’’

The Globe’s review of Prosperity found that its track record was thin, at best. In one case, for example, a project it claimed to have developed was, in fact, the work of a separate company.

Michael F. Burgess, Prosperity’s principal, could not be reached for comment yesterday. He did not return e-mails or phone calls. A consultant for the firm said Burgess was traveling in South Africa and was not available.

In a recent interview, he defended his company’s financial capacity and track record and said he fully intended to deliver the construction money for the Plymouth studio.

“We have an executed contact, and it’s on us to deliver,’’ Burgess said.

The studio project has enjoyed wide support in Plymouth, where Town Meeting representatives overwhelming endorsed the project last year, approving a package of tax breaks and an elaborate zoning change. Studio officials were disappointed earlier this year when the state denied the project $50 million in infrastructure funding, but they promised that setback would not derail them.

Thomas Farragher can be reached at farragher@globe.com.

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Film studio executives making progress

State approves impact report

By Christine Legere
Boston Globe
October 31, 2009

PLYMOUTH – After two years of plodding through the permitting process, the team of California film executives who comprise Plymouth Rock Studios have achieved two major milestones in the last few weeks that bring their dream of movie-making in Plymouth much closer to reality.

State Environmental Affairs Secretary Ian Bowles notified Plymouth Rock officials yesterday that their exhaustive Environmental Impact Report for the studio project – a required permitting step – has been approved.

“It read like a love letter,’’ said elated Plymouth Rock Studios cofounder David Kirkpatrick, of Bowles’s 30-page notification.

Bowles praised studio officials for incorporating several energy-saving measures in the building plan. The studio will be LEED-certified, keeping its carbon footprint to a minimum.

Bowles also noted “the studio would represent a major step forward for the growing film industry in Massachusetts,’’ and added “the project has the potential to create a major economic engine for the southeast region,’’ generating more than 3,000 jobs.

Just a few weeks ago, the studio group announced it had acquired investors for the $550 million project cost.

“Hopefully, this will be harvest time,’’ Kirkpatrick said.

Within the next few weeks, Plymouth Rock will close on the $16.5 million purchase of the 240-acre Waverly Oaks Golf Course. Work on the studio access road is expected to begin in the next 45 to 90 days.

While Plymouth Rock Studios secured “master’’ site plan approval for the overall project, the Planning Board stipulated it would conduct a more detailed review as building deadlines got closer. That review will be conducted over the winter so construction can begin in earnest in the spring.

The studio complex will consist of 14 soundstages; 10 acres of exterior sets; production and post-production facilities; a hotel; a theater; and an amenity village. The project includes more than 1 million square feet of building space.

In addition, the complex will allow producers to make movies and television shows, from start to finish, right on the property – something never before possible on the East Coast.

Christine Legere can be reached at christinelegere@yahoo.com.

Click here for the full text of the ruling from Environmental Affairs Secretary Ian Bowles.

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Gov. Deval Patrick won’t cut films’ tax credit

By Jay Fitzgerald
Boston Herald
October 28, 2009

The state will keep its new film-industry tax credit even as the Patrick administration eyes tightening other tax laws to raise money for the cash-strapped state.

Greg Bialecki, Gov. Deval Patrick’s secretary of housing and economic development, said the film tax credit is one of many tax exemptions, deductions and incentives that the administration is now eyeing for possible changes as the state grapples with a $600 million budget deficit.

Bialecki said the governor thought it was only fair that the state looks at tightening tax laws while also moving toward major cuts in state spending. He declined to mention which tax laws the administration is now reviewing.

But he indicated eliminating the film tax credit is off the table, though it may face some adjustments. “No, we’re not going to eliminate it,” he said, noting that some have estimated the credit has created thousands of jobs.

Senate President Therese Murray and House Speaker Bob Deleo yesterday signaled strong support for the film tax credit, despite criticism that it’s costing the state more than $100 million a year.

Murray, speaking at Patrick’s economic summit yesterday in downtown Boston, said the credit has brought scores of movie productions to Massachusetts over the past few years – and it’s on the verge of paying huge dividends if new studios are built here.

DeLeo said the House is currently reviewing the tax credit, which reimburses movie producers with 25 percent of their wages and expenditures while filming in Massachusetts. The Department of Revenue recently reported the state paid out about $113 million in credits last year, based on $452 million in film expenditures here.

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He’s set on Boston

By Mark Shanahan & Meredith Goldstein
Boston Globe | NAMES
October 28, 2009

Boston is being a most hospitable host to Hollywood, says Todd Garner, a producer of “Knight & Day’’ and “The Zookeeper.’’ And Garner, who’s been here since May working on the two movies, insists it’s not just tax incentives that attract Tinseltown.

He said the diversity of the Bay State’s geography and architecture afford filmmakers options they wouldn’t have elsewhere. “Boston’s a big city, but within 30 miles, you can shoot urban, suburban, fields, whatever,’’ said Garner, who also produced “Paul Blart: Mall Cop.’’ “For ‘Mall Cop,’ it was eerie how perfectly the Burlington Mall was laid out for us, including the Rainforest Cafe. It had everything we needed.’’

While some pols, including gubernatorial candidate Tim Cahill, have questioned the wisdom of giving fat rebates to filmmakers, Garner said big-budget movies are undoubtedly good for the local economy. “A lot of people come in and there’s work on a lot of different levels, from hotels and restaurants to dry cleaners to nanny services,’’ he said. Garner told us “The Zookeeper,’’ starring Kevin James and Rosario Dawson, wraps tomorrow while “Knight & Day,’’ featuring Tom Cruise and Cameron Diaz, is all done Nov. 11.

“I’ve had an amazing time here,’’ he said. “I have a great apartment on Marlborough Street, I love Sonsie and Newbury Street, and we have so much fun at the park. . . . Boston will always be a viable choice for making movies if that’s what the city wants.’’

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Essex still reaping benefits from filming of ‘Grown Ups’

By Jonathan Phelps
Gloucester Daily Times
October 24, 2009 12:08 am

—

ESSEX — The actors are gone, the production crews are gone and most of the set from Adam Sandler’s upcoming movie “Grown Ups” built at Centennial Grove has been taken down. But the effects of this summer’s local filming are still being felt.

“The town has benefitted greatly from this movie being filmed here,” said Selectman Ray Randall, “and those benefits continue to this day.”

The town of Essex announced this week that Centennial Grove is once again open to the public — with some significant improvements — after being shut down all summer as a result of the high-profile filming that brought Sandler, Chris Rock, Kevin James and Salma Hayek to Cape Ann for several weeks, not to mention hundreds of production crew members, movie extras and tourists that came with them.

The production crew built — and now left behind — two new basketball courts at the Grove that were used in the taping; the parking lot has been fixed up, and the local Field of Dreams has been reseeded because of damage caused by production vehicles parking there.

The Centennial Grove improvements were paid for by the film’s production company, Lakefront Productions Inc., and that was on top of the $150,000 the company paid the town under an agreement with selectmen. The movie money went into the town’s general fund, according to Randall.

Beyond the $150,000 the town received from renting the property and the additional improvements done to Centennial Grove, many local officials and business owners say the movie has pumped close to $1 million into the local economy during this recession. Antique stores, restaurants, local builders and saw mills all benefitted from having the production company’s presence in town.

Markham Lumber & Tree Services on Western Avenue was about to lay off one of its three crew members before it landed a contract with Lakefront Productions. The company was hired to provide specialized lumber to help build a boat house and a dock on Chebacco Lake for the set.

“It was a real blessing for us,” said Bob Tyack, who owns Markham Lumber with his son. “This has been a tough time for everyone in the building business, the work allowed us to keep our whole crew on full-time this summer.”

Tyack said Lakefront Productions was very committed to local businesses; he was even called in to work on the movie “ZooKeeper,” another Sandler movie filmed at Franklin Park Zoo in Boston and also produced by Lakefront.

Bob Coviello, owner of Main Street Antiques and a member of the Essex Merchants Group, said the company bought $10,000 worth of antiques from his store alone. Coviello said the production crew also visited Howard’s Flying Dragon Antique and the White Elephant Shop, both on Main Street.

“It wasn’t just the frosting on the cake,” Coviello said about the business generated from the movie, “it was the cake.”

Tom Shea’s on Main Street became a hot spot for many of the crew members.

“We had a lot of crew members come in for lunch almost everyday and they would come back later in the evening for a few drinks,” said manager Carol Shepard. “It was fun; they were a good group of people.”

Sandler even came in himself with his wife to watch a Yankees-Red Sox game. “But the Red Sox won that night,” said Shepard; Sandler is a well-known Yankees’ fan.

There were some inconveniences to the town by agreeing to allow the movie production to take over Centennial Grove and the Field of Dreams. Many groups and summer programs had to be relocated, but each group was given $1,000 compensation from the production company to find new facilities. Manchester Essex Little League was given $25,000 for further improvements to the Field of Dreams; the Essex Musical Festival took in $6,000; and the Essex Youth Commission got a $3,000 donation above the $5,000 it originally received to relocate.

“Essex hasn’t been burdened in anyway,” said Randall. “The benefits outweighed the inconvenience of moving all the programs around.”

The Grove cottage is still off limits because the film’s production company has extended its agreement, slated to end Sept. 15, with the town. Lakefront is paying an additional $500 a day to keep the cottage available through at least November in case any scenes need to be reshot.

The cottage will be left with a new kitchen, new bathrooms and new heating and cooling systems.

“They have left the property in better condition then they found it,” Randall said.

Jonathan Phelps can be reached at gt_reporte@gloucestertimes.com.

Photos
Essex1
Centennial Grove in Essex, except for the cottage, is open to the public again after being closed all summer for filming of the movie “Grown Ups.” The production company renovated the buildings on the property, and installed a basketball court, improved the parking lots and replanted grass, right. Gloucester Daily Times
Essex2
The production company for “Grown Ups” left the docks they used for filming at Centennial Grove in Essex. Gloucester Daily Times
Essex3
The production company also improved the parking lots and replanted grass at Centennial Grove. Gloucester Daily Times

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TRAFFIC UPDATES FOR CRUISE/DIAZ FILMING

Click here for a full list of upcoming “Knight & Day” road closures.

“Stars of the Hollywood thriller KNIGHT & DAY (Tom Cruise and Cameron Diaz) are being given room to express themselves as several roads and ramps in Southie and along the Mass Pike are closed.

20th Century Fox is paying $199,000 in location fees to the Pike and Massport to cover the cost of closing the roads and paying staff and police details at the movie shoots, officials said.

Massport collected another $145,000 to cover costs for filming at Hanscom Field, Worcester Regional Airport and at the Tobin Bridge maintenance garage in Chelsea.”

—Boston Herald October 17, 2009

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City Council eyes Boston studio

Hearing to address need for movie production stage

By Donna Goodison
Boston Sunday Herald
October 25, 2009

The City Council is stepping up efforts to land a movie production studio in Boston. Councilors Stephen Murphy and Bill Linehan want the city to reap more benefits from the state’s growing movie industry business that’s so far generated an estimated $700 million in spending since state tax incentives took effect in 2006.

They’ve ordered a hearing tomorrow to discuss the merits and feasibility of having a movie studio built within city limits, as plans for studios in Weymouth and Plymouth proceed.

“Just in the past few weeks, we had three or four major films shooting in one section of the city or another,” Murphy said. “We think it would be good to have studio closer to where the filming is going to occur, and we’d like to have something here within the city.”

Those films include the 20th Century Fox thriller “Knight & Day” with Tom Cruise and Cameron Diaz, and Ben Affleck’s “The Town,” starring Affleck and Jon Hamm of AMC’s “Mad Men.”

Boston real estate developer Tim Pappas of Pappas Enterprises Inc. already has been eyeing plans to build movie soundstages in South Boston, reportedly on land off Summer Street past the Boston Convention and Exhibition Center.

But Pappas, who has a film degree from New York University, declined comment on the project.

“When our plans become public, then we’ll give all the details,” he said.

Murphy believes a South Boston location would work for the film industry and the city’s needs to create jobs.

“There’s plenty of land in that emerging neighborhood over on the waterfront,” he said.

Movies shooting in Greater Boston are now adapting large empty warehouse spaces as temporary soundstages, said Nick Paleologos, executive director of the Massachusetts Film Office.

“Most of the larger movies that have been shooting in Boston that were looking for soundstage space landed at warehouses in Chelsea and Hyde Park when they were available,” he said.

If a movie studio complex is built in Boston, it wouldn’t necessarily have an adverse impact on those already in the works in Weymouth and Plymouth, according to Paleologos. Just take Los Angeles as an example, he said.

“There’s probably 300 or 400 soundstages all over Los Angeles County,” he said. “In Massachusetts, if all the soundstages proposed actually get built, you’re talking about 25 maybe.”

Plymouth Rock Studios last month said it secured a $550 million construction loan for its proposed $1 billion movie, TV and digital studio campus in Plymouth. Slated for completion in 2012, it will include 14 soundstages and 10 acres of exterior sets.

International Studio Group also plans to build a $147 million, 12-stage movie studio on 30 acres at the former South Weymouth Naval Air Station.

Movie producers prefer using soundstages close to where their principal photography is taking place, Paleologos said. And while much filming has been taking place in Boston, productions also have been shooting across the state – in Worcester, Gloucester, Rockport, Taunton, Medfield, Deerfield and Northampton.

“They’re all over the place,” Paleologos said. “If you’re shooting on the South Shore, it would be nice to have a soundstage on the South Shore. If you’re shooting in Boston, it would be nice to have some stages there.”

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CGI Studio: Film Credit Change Could Generate Jobs

By Tammy Daniels
iBerkshires.com
October 23, 2009

The state’s film tax credit helped Synthespian Studios nab the CGI work on ‘Surrogates.’ The studio is hoping to extend the credit to attract investors to fund a feature animated film – and jobs for North Adams.

NORTH ADAMS, Mass. — A change in the state’s film tax incentive could bring hundreds of jobs to the city.

That’s the prediction of Synthespian Studios owner Jeff Kleiser, who’s hoping to ramp up production on a full-length animated feature film right here.

“We have a script and completed the very early stages of preproduction,” said Kleiser on Thursday afternoon. The movie would be based on the studio’s Corkscrew Hill ride through Irish myths in Busch Gardens in Virginia. “We’re interested in doing it all in Massachusetts.”

But Kleiser said he could really use a longer-term tax credit to get investors lined up for his $60 million project.

The tax credits were established in 2005 and expanded in 2007 to lure production companies to film in the Bay State. They’ve been a rousing success, bringing in $3.6 million more in revenue than they cost and generating from $500 million to $900 million in ancillary revenue and thousands of jobs, according to the state Department of Revenue.

The number of major films being shot in Massachusetts more than doubled, from 10 films in seven years to 26 in the three years since the credits were enacted.

However, the credits — ranging from sales tax exemptions to payroll deductions, up to $7 million — only apply to films shot in the state within a 12-month period. Synthespian’s “filming” could take 18 months, said Kleiser.

So he was at the Joint Committee on Revenue’s listening-tour stop at Berkshire Community College on Wednesday to laud the program — and to ask for help.

“It’s been very good for us,” he told committee Chairmen Sen. Benjamin B. Downing, D-Pittsfield, and Rep. Jay R. Kaufman, D-Lexington. “Disney came to us to work on the ‘Surrogates’ project because we were in Massachusetts and they were shooting in Massachusetts. We got a $2.5 million contract based on that program.”

Synthespian, previously known as Kleiser-Walczak Construction Co., specializes in groundbreaking computer-generated imagery. In addition to making Bruce Willis look like a 30-year-old android version of himself in “Surrogates,” the company’s worked on such films “Spider-Man” and “X-Men.” At one point, nearly 100 people were working for the studio in North Berkshire.

Downing said on Wednesday that the 12-month time limit may have to do with the Legislature “trying to avoid the cost being beyond what the state could afford.” Kleiser suggested Thursday that it may have more to do with the way live-action films are shot on location and then finished elsewhere.

“We really want to bring people here. That’s perfect for us because we wouldn’t have to go to another state,” he said on Thursday. The company has a larger studio in Los Angeles but Kleiser and wife and partner Diana Walczak have called the area home for years. The film tax credit program has been a factor in keeping them here the last few years, said Kleiser.

Working on the Corkscrew Hill project could generate 250 to 300 jobs for 18 months to two years on the Massachusetts Museum of Contemporary Art campus. Kleiser said the company would try to fill its work force locally first before recruiting outside.

“We can certainly look into that especially when you say 250 to 300 jobs,” said Downing. “I’m not kidding,” said Kleiser. “I’m not kidding either,” responded the senator.

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YouTube: Trailer for EDGE OF DARKNESS starring Mel Gibson — Opens Jan 29, 2010

Trailer for THE EDGE OF DARKNESS, made in Massachusetts in 2008, and opening nationwide on January 29, 2010.

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John Hancock signs its name to the state’s film industry tax credits

by Jon Chesto
Patriot Ledger & WickedLocal.com
October 15, 2009

Cameron Diaz and Tom Cruise are relative newcomers to Boston. But they share something in common with longtime Boston institution John Hancock: They’re all involved with film and TV production work in this state because of our 25 percent tax credit.

In Hancock’s case, we’re talking about television commercials. They may not be as glitzy or glamorous as a big-budget action flick like the one being shot in Boston now with Diaz and Cruise. But the TV ads also provide an important boost to the local economy.

Hancock recently decided to shoot its TV commercials here, partly because of the tax credit and partly because the company wants to support other local businesses, according to Jim Bacharach, vice president of brand communications and creative services.

Bacharach told me that Motion Theory, a California production company, recently shot Hancock ads in a South End cafe, a Cambridge office building and a rail yard in Hyde Park. He says the ad featuring the cafe (Metropolis, on Tremont Street) is currently running with two previously shot ads during the Major League Baseball playoffs (yes, the ads continued even after the Sox dropped out) and college football games on national TV.

Bacharach says the ads are not aimed at portraying scenes in Boston in particular (although he says Bostonians will recognize the T car in the ad that was shot in Hyde Park). There are plenty of locales in Massachusetts that can double as a general backdrop for an insurance company ad that could resonate with potential customers in any state.

Unlike most of the companies that participate in the tax credit program, Hancock doesn’t resell its tax credits. Instead, Bacharach says the insurer – a division of Manulife Financial Corp. – claims the full 25 percent credit on all in-state production costs to reduce its own corporate income taxes.

Bacharach says John Hancock plans to continue shooting TV ads here in Massachusetts as long as the production cycle continues during months with favorable weather – proof that even our big financial companies can benefit from the tax credit program that was created nearly four years ago for the film industry.

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House speaker: Jobs from gambling, movies are key to helping state

Outlines his plan to prime the Massachusetts economy

By Nancy Reardon
Quincy Patriot Ledger
October 14, 2009

QUINCY — The answer to the state’s budget woes is job creation through expanding the gambling and film production industries, House Speaker Robert DeLeo said Tuesday. Defending the state’s push for gambling and its controversial film tax credit program, DeLeo told The Patriot Ledger editorial board that one of his priorities is job creation.

“The biggest issue we have is providing jobs, jobs and more jobs,” he said.
DeLeo said the most effective strategy for pulling the state out of its fiscal crisis is a long-term approach, but also talked about the need for more immediate budget cuts.

DeLeo said he plans to file legislation to bring resort casinos to the state in 2011. He also noted his longstanding support for slots at racetracks. The Legislature was scheduled to take up the gambling debate this fall but pushed it back. DeLeo said it wasn’t a delay tactic, but done to make sure there’s time to “get it right the first time.”

He also said the film tax credit is a “good investment” for the state.

The state offers filmmakers a tax credit that equals 25 percent of what they spend on production and payroll costs in state. Many film companies sell those credits at a discount to firms and individuals that are based here and can claim the credits against their income taxes.

DeLeo admitted he was skeptical of the program at its inception. But he recalled visiting a TV shoot at the State House earlier this year and learning that most workers on the film crew were from Massachusetts. When asked what else they would be doing, he said many told him they would otherwise be unemployed.

But some watchdog groups point out that the state’s return on investment is very small. And a state Department of Revenue report indicates the film industry only generates 16 cents for every dollar the state forgives in taxes.

All of this comes at a time when the state’s revenues are far below expectations. At the end of the first quarter of the fiscal year that began July 1, the state’s tax collections were $212 million below expectations, according to the state Department of Revenue’s most recent report. That report looks at sales, income, corporate and motor-vehicle taxes.

As a result of the shortfall, DeLeo said, the 2010 budget could end up as high as $600 million out of balance. Watchdog groups on government spending like the Massachusetts Taxpayers Foundation and the Massachusetts Budget and Policy Center say that estimate sounds about right.

And what it means to residents is emergency budget cuts – called 9C cuts – to state services and the local aid that supports municipal budgets. “I wouldn’t be honest to tell them not to be concerned,” DeLeo, a former town selectman, said of local officials. “It’s going to be very difficult.”

With the state’s many support programs under the umbrella of its Health and Human Services Department already spread thin, the House speaker also said municipalities may need to bear the brunt of cuts.

“Every city and town has issues with local aid, Chapter 70 (education funding) and all that,” he said. “But problems with drug abuse and mental illness are out there. There’s only so many places we can cut.”

DeLeo said he won’t support new tax increases that some representatives have pitched to him – including a gas, water and candy tax, and raising the income tax. “I don’t see any appetite at all for further taxation,” he told The Patriot Ledger editorial board as part of a larger discussion of the state’s fiscal crisis.

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Film industry gives local businesses a boost

By Anna Rice
The Huntington News
October 8, 2009

A few years ago, Angela Peri ran Boston Casting in a small, one-room office. She worked mainly on commercials, industrial training videos, some theater and some print advertising. But when Governor Deval Patrick signed into law a 25 percent film tax credit in July 2006, Peri said she knew everything was about to change.


“The day that the governor signed the tax incentive I said to the person next to me, ‘There goes my life as I know it,’” she said. “I had a hallway that I had to make into an office.”


Peri said she has supplied talent to most of the big budget feature films made in Massachusetts over the past three years, and her revenue has increased by about 30 percent. Over the last two years, she worked on “Paul Blart: Mall Cop” starring Kevin James, “The Fighter” starring Mark Wahlberg and Christian Bale, “The Proposal” starring Sandra Bullock and more.


She said she is working with some of the movies currently filming in Massachusetts but could not disclose information about them.


Other businesses supplying necessary services to the film industry have also seen growth since the tax credit. In July 2009, the Massachusetts Department of Revenue reported new direct spending on film and television production generated by the film tax credit since 2006 was $676 million. When the “ripple effect” on local businesses and people was factored in, the total economic output was more than $870 million.


“The film tax credit is in place until the year 2022, so I think we can anticipate that Massachusetts, in a very short period of time, will be the Northeast center in the country for film, television and digital media production,” said Nick Paleologos, executive director of the Massachusetts Film Office, which assists filmmakers with location scouting, tax credit information, crew referrals, permitting and more.


Paleologos said the film industry has provided new jobs for thousands of Massachusetts residents and utilized the services of many hotels, catering companies, restaurants, makeup artists, hair salons, art galleries, security companies and more.


Movies currently being filmed in the Boston area include “The Zookeeper” starring Sylvester Stallone, Adam Sandler and James, “The Untitled Wichita Project” starring Tom Cruise and Cameron Diaz and “The Town” starring Ben Affleck and Blake Lively.


Dave Talamas, owner of Talamas Broadcast Equipment Inc. in Newton, said his business has nearly quadrupled since the tax credit went into effect by supplying two-way radios, monitors, props, and other audio and visual equipment to films.
“We’ve become the go-to people for two-way radios,” Talamas said. “It’s also increased our business in general production because word gets around.”


Maria Lekkakos, owner of M. Lekkakos Salon, Spa and Boutique in Wenham, which specializes in providing spa services to movie productions, said that since June, she has worked regularly with three of the productions filming in Massachusetts. She said she has had the opportunity to work on celebrities like Salma Hayek, Brooke Shields and Maya Rudolph.


“Someone hears about my background and it goes by word of mouth,” Lekkakos said. “And the production will call me and put me on. That makes someone want to come get a facial by me or try me out.”


Lekkakos said she plans to work with future films doing work in Massachusetts as well.
Businesses directly related to films are not the only ones benefiting from their presence. Some local business owners said they have seen a boost in sales after word spreads that they have celebrity clients. 


Megan Wood, owner of Brookline-based Olive Green Apparel, gave Diaz a pair of her mittens while Diaz was filming for “The Untitled Wichita Project”, which is slated to be released in theaters in the summer of 2010, at Gaslight Brasserie in the South End. Wood said she has already seen an increase in online business due to coverage in the Boston Herald’s Inside Track, a section covering celebrity gossip and entertainment.


“We’re definitely hoping for People Magazine or US Weekly to get a shot of her wearing them [the mittens],” Wood said. “It would be great for business.”


Christina Bartkus, owner of Pure Chocolate in Quincy, said her chocolate has been given as gifts at wrap parties and on the sets of “The Zookeeper” and “Grown Ups,” starring Sandler and Hayek. The films provided a boost to her business during an otherwise slow summer season this year, she said.


Bartkus said Steffiana De La Cruz, wife of James, was the one who discovered her shop and decided to use her chocolate as gifts.


“It’s been great because I’m able to hit a demographic that normally people pay thousands and thousands of dollars to hit through public relations firms and gifting lounges,” Bartkus said.


Like Olive Green Apparel, Pure Chocolate’s online business has increased due to coverage in the Boston Herald’s Inside Track, and Bartkus said people have stopped by the store after hearing about her new celebrity following. Members of the cast and crew who live on the west coast have also told her they will continue to place orders online, she said.


“I’m not sure if I would ever have had exposure like this if it was not happening in my own backyard,” Bartkus said.

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Brigham Road in Waltham the scene of Cameron Diaz movie

By Joyce Kelly
Waltham Daily News Tribune
October 07, 2009

Diaz in Waltham on Wichita
Staff photo by Ken McGagh
Cameron Diaz was in Waltham filming “The Untitled Wichita Project” today. The crew was at 11 Brigham Road. The film also stars Tom Cruise, who was not in the city.

WALTHAM — In the blink of an eye, a streak of blonde hair splashed up in the wind as Cameron Diaz was whisked into an unassuming silver Toyota Prius on Brigham Road.

A small crowd lined up on the sidewalk to catch a glimpse of Diaz or Tom Cruise filming a segment of “Untitled Wichita Project’’ on Wednesday suddenly erupted in brief applause at her fleeting appearance.

An officer on detail yelled to a fellow officer, “You missed her!’’

“Aawwww,’’ the officer lamented, shaking his head.

As they watched the Prius slink away, two disappointed women at the scene complained, “She should have stopped to wave.’’ But for the most part, the brush with Diaz and the film crew was good enough.



“I’m so excited. I can’t fall asleep. It’s weird,’’ said 13-year-old Grace Herron, an eighth-grader at McDevitt Middle School. The Herrons see themselves as the lucky family whose home 20th Century Fox chose to use in the film starring Cruise and Diaz.



“All my friends are jealous – but not in a (catty) way,’’ said Grace Herron, who couldn’t stop smiling.

Her parents, Tod and Rose Herron, also said they were thrilled about the whole production at their house at 11 Brigham Road, a simple, pale yellow colonial.



“I loved him from his movies,’’ said Rose Herron.

Tod Herron said, “My favorite is an old one – ‘Risky Business.’’’ 



The Herrons said they were not allowed by contract to discuss why their home was selected or other details, but said everyone involved in the film was “great’’ to them.

Police and neighbors said there were no prima donnas among the actors or film crews – the locals said the movie professionals have been respectful, considerate and generous since they arrived yesterday morning around 8. And no limo for Diaz – who insisted on riding in a Toyota Prius.

“She’s eco-friendly, so they had to have hybrid cars for her,’’ said Officer Joseph Guigno.

Guigno, who is also a neighbor, said the production is good for the neighborhood, the city, and the economy in general.



Crew members, who all hit up D’Angelo’s for lunch yesterday, have been using a lot of the local facilities and restaurants, he noted. As a neighbor, Guigno said, “It’s nice when I’m out walking my dog, to see something going on that’s kind of exciting.’’

Tom Keene, who lives across the street at 110 Main St., opined that the production would likely be good for future home sales as well. The movie producers approached his wife, Marianne Keene, who runs “Keene Cuts’’ out of her home, to ask permission to for a shot panning over their house, he said. She immediately said yes, and then let him know about it, he said, laughing.



“I’m laid-back, I don’t mind. My wife is excited,’’ said Keene, a welding teacher at Waltham Vocational High School. “I’m assuming they chose my house it’s because it’s a stately-looking property,’’ Keene said, Guigno nodding in agreement.

Neighbors at 31 Brigham Road, William and Margaret “Peggy’’ Lee, were also delighted to get a little piece of the action.

“They borrowed my chair! If they don’t cut the scene, my chair will be in the movie – my chair will be famous,’’ said Peggy Lee, laughing. Peggy Lee was out on the sidewalk early enough to catch Diaz when she emerged from the house and “gave a little smile and wave.’’



“She was very beautiful, very natural-looking. And very tall,’’ said Peggy Lee.

The whole production has been fun, and the crews, wonderful, she said. William Lee, peering across the road at the crews hustling around his neighbors’ lawn, called the local filming “once in a lifetime.’’



Neighbor Christina Pulselli said she was hoping to get a glimpse of Cameron Diaz. Watertown resident Janet Powers took a little half-hour break from her routine to watch the production.



“Who am I waiting to see? Anybody!,’’ she said, laughing.

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