Hawai'i hopes to attract three major new movies

By Katherine Nichols
Advertiser Staff Writer

Hawai'i is in talks with studios to shoot three major motion pictures in the Islands next year that could pump as much as $100 million into the economy, according to the state's film commissioner.

State and industry experts said discussions are in a critical stage and they would not disclose the names of the studios or possible films.

State film commissioner Donne Dawson declined to characterize how negotiations are progressing, but said she hopes to have at least one deal finalized by the end of the year.

Any production in the state would be a boost for an economy struggling in the wake of the Sept. 11 terrorist attacks. Hundreds of residents have lost jobs or had their hours cut as companies have coped with the drastic drop in tourism. Possible bright signs in the state's film and television production industry could offset at least some of the loss: Such productions last year contributed at least $136 million to the economy — an industry record in Hawai'i.

And while luring productions remains a fiercely competitive business, one factor that may be working in Hawai'i's favor after the terrorist attacks is that some movie stars want to work closer to home.

"With the aftermath of 9-11, the industry is looking for opportunities to stay in the United States," said Joe Blanco, Gov. Ben Cayetano's special adviser for technological development. "That may open up opportunities for Hawai'i. But we have to be competitive. Go to a Third World country and see what your labor costs are."

Canada, Thailand and Australia for instance, also have more favorable exchange rates than Hawai'i, Dawson said. "They have the weight of their country's government behind them ... and they can put a lot more resources toward attracting productions."

Mexico and Germany are also joining the mix, said Blanco. And for many of these countries, enticing films is a high priority.

"We have stiff competition from Australia," said Maui film commissioner Amy Kastens. "Particularly with the dollar exchange."

In addition to Hawai'i's recent highly publicized battle with Australia for "Baywatch," Australia landed the television remake of "South Pacific," starring Glenn Close. One of the films in negotiations with Hawai'i is also "looking hard at Australia as a possibility," said Dawson.

Still, he said, if it's "possible for productions to stay relatively close to home base, that would be their preference."

Kastens agreed. "Let's face it," she said, "(Hawai'i) is in America. You can drink the water, and it's only a five-hour plane ride from Los Angeles, which is very important."

In the past, Hawai'i has drawn criticism for offering subsidies and union wage concessions to help lure productions. But Blanco said that despite the state's eagerness to boost the economy, subsidies are not up for discussion in current talks.

Dawson said that in current talks, the state is hoping to enlist the help of the private sector "to come up with film-friendly rates to offset additional costs." Examples include possible discounts from airlines, hotels, car rentals and shipping companies.

In addition, the state is "hoping to facilitate the use of Act 221," said Blanco, referring to a program of investment tax credits for qualified high-tech businesses, including film and television, that was signed into law June 8.

While the law does not affect a typical production operating in the Islands for a few months before returning to Los Angeles, it is designed to benefit longer-term productions in which Mainland and local investors work together on activities centered in Hawai'i, said tax attorney Ray Kamikawa.

In a separate deal specifically structured to attract productions, the state also offers up to a 4 percent rebate on total production expenditures and up to a 7.25 percent rebate on hotel accommodations, provided productions meet specific criteria.

The industry has been gradually growing in Hawai'i. Revenues from film and television productions in the state rose from $49 million in 1995 to $98.1 million in 1999. The industry cracked the $100 million mark for the first time in 2000, and employs an estimated 4,190 people in the state.

The ripple effect is also growing. Productions support a variety of businesses when they build sets and purchase props, greenery and costumes, said Brenda Ching, executive director of the Screen Actors Guild.

Kaua'i film commissioner Judy Drosd estimated that "Dragonfly," a movie starring Kevin Costner and Kathy Bates, brought $5.3 million to the island over a two-month shoot in January and February.

Approximately 50 Kaua'i people served as extras on the landscape that doubled for Venezuela. Twenty more worked on the crew, while the entire staff used about 4,000 hotel-room nights. "Dragonfly" is scheduled for release in February.

On O'ahu, an untitled "surf girls" movie started filming this week at JW Marriott Ihilani Resort and Spa. In about nine days, the crew will head to the North Shore for the balance of the two-month shoot, said unit publicist Andy Lipshultz.

John Stockwell is directing the "medium budget" Imagine Entertainment and Universal Pictures film.