Small films flock to Minnesota lured by location -- and rebates

They will never be confused with Hollywood, but the forests, lakes and small towns of northeast Minnesota have growing appeal to filmmakers who are flocking to the region to shoot small-budget movies.

The state's decision to sweeten the pot hasn't hurt.

Aiming to lure more filmmakers to Minnesota, state lawmakers last year resurrected the "snowbate" program which provides rebates to film companies for 20 percent of what they spend in the state — and 25 percent if they shoot outside of the Twin Cities metro area.

• More: Mapping Minnesota's movies

The effort, first established in 1997, is made possible by $10 million in state spending over two years. On top of that, the Iron Range Resources Rehabilitation Board has set aside $800,000 to offer a 20 percent rebate to projects that film in its service area in northeast Minnesota.

Since the state money again became available last August, five feature films have qualified for funding. Two are in northeast Minnesota, including "Heart of Wilderness," which is underway, and "After the Reality," which started filming last week on Crane Lake near the Canadian border.

At least five additional films are scheduled to begin filming in northeast Minnesota later this year.

A few are also scheduled for the Twin Cities, but industry insiders say the preponderance of activity is in the northern part of the state. Several have projected budgets of $1 million or more.

"The big wave is definitely coming and we're already feeling it," said Riki McManus, director of the Upper Minnesota Film Office.

McManus said when movie productions move in, they typically spend half their budget on location.

"Talk to the places where they're lodging, talk to the restaurants and caterers, talk to the dry cleaners, the rentals for lots of different kinds of equipment," she said. "Those can be big dollars."

To reach the set of the independent film "Heart of Wilderness" in mid-May, the 14-member cast and crew took a fishing boat across Garden Lake outside Ely on the edge of the Boundary Waters. There, on an island, they built a set that looked just like a national forest campsite.

"There aren't any movies that are set in the Boundary Waters, so we were drawn to it for that," said director Towle Neu, of Minneapolis.

He co-wrote the script, about a wife and husband who retreat to the wilderness to try to salvage their marriage after he gets wrapped up in a drug deal.

Neu said the film was always going to be shot in Minnesota. But the financial incentives encouraged them to spend more money.

"It's allowed us a lot of creature comforts that I don't think we would have had otherwise — our accommodations, our food," he said. "At the end of the day, in all honesty, that happy cast and crew will make a much better movie."

The rebates also played a big part in convincing the makers of "Heart of Wilderness" to support other Minnesota businesses, executive producer and co-writer Kevin Byrnes said.

"We had to buy $5,000 worth of hard drives," Byrnes said. "I probably could have gotten them online pretty cheaply, but with the incentive up here, we ordered them through a local computer vendor" in Ely.

For states, offering incentives to filmmakers can be an important economic development tool. States that don't have them are at a disadvantage.

That could help explain why the 2008 movie "Gran Torino," which was written by a Minnesotan, had an original script set in Minnesota and starred several Minnesotans, was shot in Michigan. At the time Minnesota didn't offer financial incentives to filmmakers.

During the last period snowbate was funded, from 2007-2011, the state allocated about $5.5 million, of which just over $4.1 million was spent. So far this time, through May 20, the state has doled out about $1.3 million, for films, TV shows and commercials.

That's prompted a discussion about what role the state should play, if any, in recruiting the film industry, State Auditor Jim Nobles said.

"It's often questioned why the government is involved in picking winners and losers, and supporting some people in the private sector and not others," he said.

Nobles is conducting an evaluation of the Minnesota Film and TV Board, which oversees the snowbate program. Even supporters want to know whether the state's approach is working, he said.

"Is it more effective to try to bring outside film producers to Minnesota?" Nobles asked. "Or try to utilize the talents and resources we already have in the state and be supportive of that?"

Lucinda Winter, director of the Film and TV Board, welcomes the scrutiny. States that don't offer incentives, she said, don't attract movies.

"It's that cut and dry," Winter said. "If you are not offering an incentive, whether your political leanings are for or against, you're not in the game."

The competition for film business is tough, with 37 states and Canada now offering incentives.

• Map: Film incentives around the state

Some offer tax incentives, while others provide rebates. Minnesota's rebate of 20 or 25 percent puts it near the top of what other states offer. But several states are willing to pay huge sums to attract big films. New York offers over $400 million per year and Michigan, $50 million.

Winter said such public subsidies and technological changes, have decentralized movie production.

"There's regional hubs of production based on incentives and infrastructure," she said. "Cameras, I can put one in my purse that's pretty much professional quality. I can shoot anywhere. Now it's about where do they have the money — and an interesting story."

Winter said Minnesota is starting to see results, especially in northeast Minnesota, where the combined 45 percent rebate is among the best in the nation. She hopes to woo more projects and convince state lawmakers to extend the program when the funding expires next year.

Plans are also in the works to build a movie production studio on the Iron Range.

"We look at it as a game changer for the Iron Range," said former political fundraiser Jerry Seppala, who now runs Griffin Productions.

The company is behind two films slated to begin production on the Iron Range later this year: "Thanksgiving at Denny's" and "Twelve Bells."

Seppala envisions a 25,000 square foot studio and soundstage called Ironbound Studios. He said that would help address the current drawback to filming more movies in northeast Minnesota — the lack of infrastructure and locally based crews.

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