Major downturn plagues Louisiana's film, TV industry 'Hollywood South' after big changes to tax credit program _lowres

Advocate staff photo by BRIANNA PACIORKA -- Patrick Mulhearn, executive director at Celtic Studios in Baton Rouge, points out features of the Celtic Studios' empty Stage 6 on Thursday, March 24, 2016.

The head of Louisiana's largest film and television production studio says he hopes to see the sluggish movie-making industry rebound in the coming year after a steep downturn that followed changes to the state tax incentive program.

"I'm cautiously optimistic," Patrick Mulhearn, director of Celtic Media Centre, told the Press Club of Baton Rouge during its weekly luncheon Monday. "It can be resurrected, but we didn't realize the extent to just how damaging (changes to the film tax credit) would be."

The Baton Rouge Metro Council on Wednesday approved a new 2-cent tax rebate on every dollar of purchases related to movie production — a move that Mulhearn said could help as the industry tries to build back.

The generous incentives that Louisiana has offered to the film and television industry were frequently targeted as Louisiana cycled through repeated state budget shortfalls.

The state Legislature, looking to rein in the tax credit program’s ballooning costs in 2015, approved a $180 million yearly cap on credits for the next three years. At the same time, the state suspended the option to cash in the credits at a discount, which meant film-makers who benefited from the program either apply credits against their own taxes or sell them to a third party.

On July 1, the state began to buy back the credits that tapped out the program within a matter of weeks.

"It was a one-two punch that was lethal," Mulhearn said. "But producers can see the light at the end of the tunnel."

Gov. John Bel Edwards in July launched a full-scale review of the Motion Picture Production Tax Credit program that he said would help chart out a long-term plan for an incentive program that better serves the state.

And state lawmakers say they expect to revisit the topic when the Legislature meets next year. 

Mulhearn said he's courting a scripted-television show for 2017, but he wouldn't elaborate on the project.

"The film industry is a delicate ecosystem," he said. "The projects are not all going to be big."

During the downturn, Mulhearn said that the studio's business model has evolved.

After hosting Gov. John Bel Edwards' inaugural ball in January that drew nearly 4,000 attendees, Mulhearn said the studio has been actively booking other events. "We're in the events business now," he said.

Space also has been rented out to FEMA to be used as a disaster recovery center, and Mulhearn has entertained the idea of forming a partnership with a medical marijuana provider to lease space, though he declined to elaborate during the press club meeting.

Following the floods, the studio served as a shelter for thousands of people who were displaced from their homes.

"The state has promised to make us whole," he said. "We haven't received a dime yet, but we're confident they will hold their end of the bargain."

Follow Elizabeth Crisp on Twitter, @elizabethcrisp.