'Lost' will stay in Hawai'i for now

By Michael Tsai
Advertiser Staff Writer

ABC's "Lost" will return for a second season of filming on O'ahu, according to Barry Jossen, senior vice president of production for Touchstone Television.

The TV series "Lost" films on O'ahu — often at a North Shore beach. There has been speculation the production might move elsewhere because of Hawai'i's high costs and other factors, but a studio executive says it will stay here at least one more season. Advertiser library photo • Oct. 31, 2004

"We are not leaving," Jossen said by telephone from Los Angeles, responding to recent talk the show would not return unless the state takes measures such as enacting tax breaks to help defray the cost of shooting here. "Our intention is to stay in Hawai'i when and if the network renews us."

Jossen, a graduate of Kalani High School, said the show faces ongoing challenges in working with existing collective bargaining agreements, dealing with a lack of local film industry infrastructure and absorbing the cost of bringing in and housing Mainland workers to supplement local crews "solid in capability but shallow in numbers."

Jossen also said the tax rebate the show received under Act 221 — while welcome — may not have been as much as originally projected.

Still, Jossen emphasized that, contrary to speculation, the tax rebate has never been a make-or-break issue for the show.

"Our decision to base the show in Hawai'i is not reliant on the existence of Act 221 or (the related Act 215) ...," he said. "The issues for us were scheduling, timing, accessibility to L.A. and ease of production here versus Australia. Basing it here was the right choice."

Jossen said he couldn't predict if staying in Hawai'i will be the right choice "forever," particularly if audience numbers shrink over time.

And with states like Louisiana, Florida and New Mexico joining international destinations such as Australia and Canada in offering incentives to big-money productions, the competition Hawai'i faces in luring and retaining shows such as "Lost," other big studio projects and national commercial projects grows ever stiffer.

For example, cost was a primary factor in the decision to shoot Adam Sandler's remake of "The Longest Yard" in New Mexico rather than Hawai'i.

Jossen met with studio executives, legislators and Gov. Linda Lingle two weeks ago in Honolulu to argue for legislation that would increase tax credits for TV and film production in Hawai'i and simplify the process.

Two versions of the proposal — Senate Bill 541 and House Bill 1590 — are making their way through the Legislature. Both allow for an across-the-board 15 percent tax credit for Hawai'i film and TV spending, up to $8 million in credits per production.

Fifteen percent is considered the minimum tax credit needed to stay competitive with other states, according to state film commissioner Donne Dawson and others who have long advocated the increase. The current tax credit, established in 1998, is 4 percent on all paid expenditures incurred in the state, as well as a 100 percent hotel-room tax credit. The credits are provided after qualified spending is done.

The proposed bills would make the credit available to qualified commercials and digital media productions, and would reduce the qualifying amount to $200,000 spent in the state, down from $750,000 for TV productions and $2 million for films.

"What the refundable production tax credit provides is a degree of certainty," said state film commissioner Dawson. "A lot of times producers are coming in at the 11th hour deciding where to film. This credit is equitable across the board, which gives them the predictability they need.

"They need to be able to say, 'If we go here, we will save this much.' "

The bills also would allow for an added 5 percent tax credit if the production shoots on a Neighbor Island.

"That's an important piece of the puzzle to attract productions and build the infrastructure on the Neighbor Islands," Dawson said.

An analysis by the state Department of Taxation concluded the proposed bills would have no adverse financial impact on the state.

"The value to the state is that the more work that can be done here, the more jobs there will be and the more opportunities for residents to get training," said Sen. Carol Fukunaga. "A more skilled labor force in turn makes Hawai'i more attractive to productions."

While Jossen and others said Act 221 may have been tainted by big-budget films that exploited its original provisions, Fukunaga said it helped attract last year's bumper crop of network television series and films.

"It showed that if we can make the state competitive, the productions will come," she said.

But many productions continue to look at the cost of filming in Hawai'i and choose to go elsewhere.

Genie Joseph, CEO of Hawai'i Movie Studios, said a difference of $200,000 was all it took for one film production to choose the Caribbean over Hawai'i last year.

Joseph is currently trying to keep a new teen TV series, "Boarding School," from being lured away by Puerto Rico, which she said is offering a 40 percent tax credit.

Joseph said she's appreciative of the work Dawson and others are doing to help Hawai'i become more attractive to film and TV productions, but she's concerned that by forcing productions to decide between Act 221 credits, which focus on local investment, and the new proposed credits, the state might be handing some producers an unwinnable dilemma: Credits to help local investors or credits to defray production costs?

"I understand that people are nervous about the possibility of productions getting both credits, because it seems like too much," she said. "But when you consider that production costs are 30 percent higher here, the 15 percent (tax credit) is not enough for us to be competitive."

Reach Michael Tsai at 535-2461 or mtsai@honoluluadvertiser.com.