Vacate Hollywood: The Chronic Epidemic of Runaway Production
What do Blue Jasmine, Transformers and the Hunger Games all have in common?
A majority of those films’ scenes were not shot in LA. “Blue Jasmine” was shot in San Francisco, “The Hunger Games” in North Carolina, and the Transformers franchises in Michigan, Illinois, Indiana, Texas, Russia and China, amongst others. The string that ties these movies together is that they’re all runaway productions – the creators of each film deliberately chose to shoot in locations other than LA . Of course, sometimes a script calls for an out-of-state locale, but there are also economic reasons for shooting outside of Hollywood.
Defining the Problem
Runaway production is a term for the problem of production jobs leaving the state, and in particular Los Angeles. It’s one of those unresolved Hollywood issues like piracy and studio accounting. It’s not a relatively new problem, as it’s been a chronic issue throughout the past few decades. Even in the late 1990s, the Directors Guild of America (DGA) and the Screen Actors Guild (SAG) noticed the accelerating phenomenon and conducted an investigation.  Their report was done on a national scale, but the biggest effect is felt on the West Coast.
California has traditionally been the mecca for the TV and film industry, but numbers do not indicate continuous prosperity. Movie and TV production jobs in LA County fell from 117,086 in 2011 to almost 115,953 in 2012, according to the State Dept. of Finance.  The region’s share of TV pilots has dropped sharply: decreasing from a peak in 2006 with 82 percent of all pilots being shot in LA, to 60 percent last season, and now 52 percent.  According to a recent report in the Los Angeles Times, the number of top-grossing films made in California has dropped 60 percent in the last 15 years.
To be clear, there are two types of runaways: creative and economic. The DGA defines creative runaway as those media projects which depart because the story takes place in a setting that cannot be duplicated or for other creative considerations, where as economic runaways depart to achieve lower production costs.  The focus of the issue is on the latter.
Where Have All The Movies Gone?
The great migration is a push-and-pull trend. Essentially, film and tv production has become expensive to do in LA, and cheaper to execute elsewhere.
Producers point to local costs as the biggest concern. For example, it costs about $5,670 a day to shoot in the county-owned Grand Park downtown, while shooting on an LA County sidewalk can cost about $470 in permitting fees. In addition to location fees, the Los Angeles Police Department charges additional fees. 
As another illustration, if you wanted to film in Culver City for a day there are some expensive requirements: $330 a day in permit fees, a $165 application fee, $400-$1500 per day in location fees, $55 an hour with 8 hours minimum for Culver City Police to perform traffic or crowd control, and $56 an hour with 8 hours minimum for assistance of the Culver City Fire Department.
In contrast, there are other countries, states, and even cities within California that do not have such high barriers. Factors like tax incentives, a filmmaker-friendly infrastructure, co-funding and favorable exchange rates are successfully luring production elsewhere. 
Europe’s soft money sources have enticed producers to set up camp in nations like Germany, which provides an incentive package that offers a rebate of 20 percent plus support from a number of regional film funds. Consequently, Ron Howard’s “Rush,” Wes Anderson’s “The Grand Budapest Hotel,” and Fox’s “The Book Thief” are all German co-productions. 
Ireland’s government last year extended its tax incentive for the film, TV and animation industries until 2020. The United Kingdom also has a full agenda for productions, including Marvel’s “Guardian of the Galaxy,” Warner Brothers’s “Edge of Tomorrow,” and the next “Star Wars” installment, directed by J.J. Abrams. 
Canada provides major competition as well. Nationally, Canada promotes a 16% refundable tax credit to film studios. The success of this tax incentive has created competition between cities and provinces within Canada to host productions. Toronto has successfully lured “Man of Steel” from Vancouver, because Ontario now gives filmmakers a 35% rebate of qualifying costs plus other additional credits. 
Within the U.S., about 40 states – North Carolina, Georgia, Louisiana and New York included – now give tax breaks to movie and TV producers.  Even in 2009-10, the second most successful state behind California at winning productions was New York with 624, followed by Louisiana with 149, Texas with 148, Michigan with 112, Georgia with 11, Illinois with 74, and Florida with 65. 
Even closer to home, San Diego has wised up to the benefits of better tax incentive programs for production. San Diego has already reduced fees for police services, and has partnered with local hotels to offer special rates for production crews. Similarly, San Francisco offers some hotel discounts and launched a more extensive rebate program that shoot heavily in that city, entitled “Scene in San Francisco.”
Halting the Runaway Flow
Considering that there is more incentive to film outside LA than in, the city’s new mayor is the man with the plan to halt the exodus. LA’s mayor, Eric Garcetti, has vowed to help stop the leaky faucet that is runaway production. He has tried to communicate the urgency of his message even during his campaigning for mayor, and citing it as priority in his inaugural address.
Although California already has a $100 million tax incentive program in place, the program lags well behind other states and countries in terms of what it can offer financially.  (New York’s is about $420 million). One of Garcetti’s first steps was issuing an ordinance that gives TV pilot producers a free pass on permits while filming in the city of LA., which was unanimously approved by the City Council in October 2013.  Garcetti recently called for an even more drastic reduction in red tape, including a push for an increase in the tax incentive program.
The mayor is also working on a campaign to educate LA residents about the importance of filmmaking to the local economy, and plans to plea for tolerance when crews and productions come to their neighborhood. “This is town of storytellers and storymakers – the best on the face of the Earth,” said Garcetti, adding, “When we protect the story, we protect the city, and we protect the nation as well.” 
In the fall of 2013, Garcetti appointed film czar Tom Sherak, a veteran executive and former Film Academy president. Sherak will lead the campaign for production incentives in Sacramento and is empowered to work across city departments. Sherak told the Hollywood Reporter: half of LA’s blue-collar workers have below-the-line jobs in the entertainment industry. “We have to give them jobs,” said Sherak. “We can’t be dormant and watch production leave because others are giving incentives when our friends and families and relatives need work.” 
However, the success of smoothing over bureaucratic bumps for any kind of production depends on the response in Sacramento – a capital which has a sense of urgency over other issues.  Even if Governor Jerry Brown is convinced, there’s still a slate of other budget priorities worthy of time and money.
Note: An exception to the norm of runaway production as described above is Spike Jonze’s “Her,” which is set in Los Angeles in the near future. A majority of the movie was filmed in LA.
 Smith, Dakota. “Entertainment Industry in California Suffering As Film Producers, Politicians Seek Incentives.” The Huffington Post: Los Angeles Daily News. Jan. 5, 2014. http://www.huffingtonpost.com/2014/01/06/entertainment-industry-california-suffering_n_4546679.html
 Buckworth, Kathy. “The Hunger Games Take Over North Carolina.” The Huffington Post. March 14, 2012. http://www.huffingtonpost.com/kathy-buckworth/hungry-for-hunger-games-e_b_1337411.html
 Bergen, Kathy. “Amid Transformers 3 filming, tax incentives come under scrutiny.” Chicago Tribune. July 27, 2010. http://articles.chicagotribune.com/2010-07-27/business/ct-biz-0728-film-costs–20100727_1_tax-credit-film-finance-betsy-steinberg
 Johnson, Ted. “LA Mayor Declares State of Emergency as Movie, TV Production Flees Hollywood.” Variety. Aug. 26, 2013. http://variety.com/2013/biz/news/l-a-mayor-declares-state-of-emergency-as-movie-tv-production-flees-hollywood-1200589182/
 “U.S. Runaway Film and Television Production Study Report.” http://www.hhill.org/images/uploads/monitor_report.pdf
 Johnson. Variety.
 Cunningham. The Wrap.
 Horsey, David. “Runaway production leaves California in the lurch.” Los Angeles Times. Jan. 8, 2014. http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-horsey-runaway-production-20140108,0,192884.story#axzz2qaTW4RGq
 Ibid., p. 2.
 Smith.. The Huffington Post:.
 “30-Mile Studio Zone Chart.” California Film Commission. Revised Feb. 2, 2013. http://www.film.ca.gov
 Lodderhouse, Diana. “Runaways Welcome: Countries Offer Incentives to Lure Productions Fleeing Hollywood.” Variety. Aug. 29, 2013. http://variety.com/2013/biz/news/runaways-welcome-countries-offer-incentives-to-lure-productions-fleeing-hollywood-1200590312/
 Horsey. Los Angeles Times.
 Smith. The Huffington Post.
 Johnson. Variety.
 Cunningham,. The Wrap
 Block. The Hollywood Reporter.
 Verrier, Richard. “Mayor Eric Garcetti appoints Tom Sherak as LA Film Czar.” Los Angeles Times. Sept. 16, 2013. http://articles.latimes.com/2013/sep/26/entertainment/la-et-ct-garcetti-appoints-sherak-film-czar-20130926
 Block. The Hollywood Reporter.
 Johnson. Variety.