Efforts are underway in Eureka Springs to provide tax breaks to film production companies.

If those efforts are successful, Eureka Springs would become the first city in Arkansas to offer such incentives, said Christopher Crane, the state’s film commissioner.

“This is something that we have brainstormed on for a year,” said Crane. “We’ve had many meetings with [city leaders] and the Chamber of Commerce and the visitors bureau up there.”

A draft proposal was sent last month to the Eureka Springs City Council. A group including the Arkansas Film Commission, Eureka Springs Chamber of Commerce and Eureka Springs Arts Council requested a 5 percent maximum tax rebate, split between the city and the city Advertising and Promotion Commission.

Eureka Springs has a 2.375 percent city sales tax, and the commission has a 3 percent sales tax that applies only to restaurants and lodging. Total sales tax in Eureka Springs is 9.375 percent, excluding the restaurant and lodging tax.

Sandy Martin, chairman of the Eureka Springs Arts Council, said the percentages for the rebate can be determined by the city and commission. She said they’ll be recommending a total incentive of 4 percent to 5 percent.

The City Council will discuss the issue at its meetingMonday, according to the agenda.

“If it brings money into town, it’s OK with me,” said Mayor Morris Pate.

Mike Maloney, executive director of the commission, said he has talked with Crane about the proposal.

“We are working with him, very positively,” Maloney said. “It’s a good fit for us. He’s trying to make it work.”

Whether the incentive is approved and how much the percentage will be depends on a vote of the six-member commission, and that can’t happen until Feb. 12 at the earliest, said Maloney.

“They haven’t come to the commission yet to make a formal request,” he said. “I think they would like toexpedite it, but they have to get through the City Council first.”

Maloney said the financial aspect of the proposal might need further examination.

“What would have to happen in my mind is they would have to come up with a cap figure,” he said.

TOURISM COMPLEMENT

Moviemaking is a good fit for the artsy tourist town, said Mike Bishop, president of the Chamber of Commerce.

“It’s a great thing that complements our tourism industry,” he said.

Eureka Springs has a unique environment and proximity to technical support in Branson, 50 miles to the northeast, and at the University of Arkansas at Fayetteville, which is 45 miles to the southwest, Bishop said.

Eureka Springs has already been the backdrop for several movies, including Pass the Ammo (1988), Chrystal (2004), Elizabethtown (2005), Mr. Christmas (2005) and War Eagle, Arkansas (2007). Part of The Blue and the Gray, a 1982 television miniseries, was filmedin Eureka Springs.

“We’re not going to recruit smokestacks,” said Bishop. “There are a lot of things we’re limited to, so this is an industry we’ve sort of zeroed in on.”

According to the proposal, the request is being made to encourage and develop a strong film and digital production industry in Eureka Springs. The tax incentive would be a rebate after completion of the film production and filing of the appropriate forms.

“They are using it as a carrot,” said Crane. “It would go pretty much lock step with us and our state incentives.”

Arkansas has had a statewide film incentive since1983. It was the first state to enact one. That initial incentive provided a rebate of 5 percent of film production costs in Arkansas as long as $500,000 was spent in the state within a six-month period or $1 million within a year.

The Arkansas law regarding the tax incentives was changed a few times over the years, in part to keep up with more aggressive rebates offered by other states.

Currently, Arkansas Code Annotated 15-4-2005 provides for a 20 percent rebate on production costs along with an additional 10 percent rebate in payroll costs for employees - other than producers and directors - who are full-time Arkansas residents. Certain requirements must be met for eligibility, and the production company must spend at least $200,000 within a six-month period on production of the film.

A similar statewide rebate is provided for post-production work under Arkansas Code Annotated 15-4-2006. It has a lower threshold of $50,000 being spent within six months.

By passing its own tax, Eureka Springs will have “skin in the game,” said Crane.

RECRUITMENT TOOL

Crane said the incentive would also make film production in Eureka Springs more competitive with Louisiana, for instance, which has a 30 percent tax incentive for film production and 5 percent on salaries of crewmen who are in-state residents.

“For us to be 25 percent in Eureka would be extraordinary,” said Crane, adding the base state rebate with proposed city tax incentive. “I think the amount of productions in that area would increase significantly.”

Crane said he expects other, larger cities in Arkansasto follow suit, such as Little Rock, North Little Rock, Fayetteville and El Dorado.

Bishop said the local rebate is “just icing on the cake” on the state incentives.

“It’s basically a recruitment tool,” he said. “I think that when filmmakers look at a location, it’s always bottom-line stuff. They want to know where they can do things most efficiently. A great incentive is whether you can offer them some tax breaks. … It was on the back burner. I wanted to jump-start it and get back to generating some interest out there.”

The Eureka Springs Indie Film Fest, slated for Jan. 23-25, will be another opportunity to promote the city, Crane said. Film-makers who go there for the festival can see what the town has to offer, he said.

Martin, the Arts Council chairman, is also co-founder of the film festival. She said it will include more than 25 films this year.

“We’re trying to plan the initial one for an ongoing film festival, not a one-time event,” she said.

Northwest Arkansas, Pages 7 on 01/13/2014