Is NYC "Permitted" To Support Indie Film?

Today's guest post is from attorney Steven Beer.  Steven not only has posted for us before, but also delivered a great call to arms in Indiewire with proclamation of the Era Of Filmmaker Empowerment. Today's touches upon some of the issues that I raised recently regarding how film incentives need to help low budget production. Independent filmmakers and producers from New York are accustomed to change and challenges, and as of this week, they will have yet another hurdle to jump.  As of July 11, 2010, the Mayor’s Office of Film, Theatre and Broadcasting, the MOFTB, has begun charging filmmakers a $300 fee for film permits.  Historically, New York City has not charged anything for film permits.  New York City has joined the ranks of other cities, such as Chicago, D.C., Los Angeles, Miami, San Francisco, and Seattle, all of which charge fees for film permits.  When the proposed rule was announced in April, it generated mostly negative reactions; concerned filmmakers signed petitions against the rule, believing that the fee would diminish New York City’s claim to being the capital of the independent film world.  Some scoffed at the fee, unable to see how an extra $300 charge could affect a film budget.  While opinions may vary, the fee is certainly changing the climate for independent filmmakers, no matter how large their budgets might be.

Veteran producers assert that the $300 fee is the second step in New York City’s evolution towards becoming a less filmmaker-friendly city.  The first major change occurred in August of 2008 when the MOFTB required filmmakers to obtain permits for shoots that involved anything more than a handheld camera and then in turn required filmmakers to carry liability insurance of at least $1 million in order to obtain those permits.  Basically, ever since August 2008, filmmakers have had to pay the implied charge associated with the cost of obtaining liability insurance if they wanted to film in New York City.  The new $300 fee, however, is the first explicit charge on filming in New York City.

The $300 fee is officially called the “New Project Account Application Fee.”  The MOFTB deems the charge as an “application processing fee,” not a location fee.  The $300 charge will apply to the application process for each project.  The New Project Account application will be valid for the period of continuous photography for a film and for the duration of one season for a television series.  The fee was developed to help offset the City’s unprecedented budget cuts; the MOFTB analyzed the administrative and personnel costs that it incurred each time it processed a new project application and came up with a fee of $300[1].

Not everyone will have to pay the $300 fee; the MOFTB will waive the fee for applicants who can demonstrate “unreasonable hardship.”  The MOFTB does not define what “unreasonable hardship” means in relation to the $300 fee, but its website explains that those who can show that the cost of obtaining general liability insurance imposes an unreasonable hardship will also qualify for a waiver of the $300 fee.  The MOFTB considers the cost of obtaining insurance to be an unreasonable hardship when it exceeds 25% of the filmmaker’s budget.  When looking at the applicant’s circumstances, the MOFTB also considers the filmmaker’s projected budget as well as the projected budget for similar productions.  Still, it is unclear exactly who can qualify for the waiver of the $300 fee.

Over the years, the Bloomberg administration has successfully made New York City a more desirable location for film and television shoots by providing tax credits to complement New York State’s production incentive program.  Now, many question whether the $300 fee will undo the City’s progress and discourage independent filmmakers from choosing New York City as their production location.  However, New York City is not alone in its policy of charging for film permits.  Surprisingly to some, the $300 fee falls square in the middle of the range of fees that other city’s film commissions charge; filmmakers with productions in Los Angeles pay permit fees of $625 for two weeks of shooting, and Chicago’s film commission charges $25 per day per location.  Still, many cities that have emerged as desirable locations for independent filmmakers, such as Toronto, New Orleans and Austin, charge no application or permit fees.  Unlike New York City, however, those cities require productions that call for vehicle or pedestrian traffic control to hire police officers.  Toronto, one of the most filmmaker-friendly cities, charges between $65 and $84 per hour per officer, and Austin and New Orleans charge only slightly less.  In its favor, New York City proudly offers free police assistance, which is one of the MOFTB’s most valuable services for filmmakers.

Will the $300 application fee push independent filmmakers away from New York City?  Mayor Bloomberg was quoted as saying that the fee comprises only a small percentage of production budgets.  Although this rings true for studio productions, projects that operate on low budgets might no longer choose to film in New York City due in part to the new fee.  Student filmmakers might also feel the blow of the $300 charge.  Now, currently enrolled New York City film students can avoid the requirement of carrying liability insurance by showing proof of insurance through their schools, but it is unclear whether schools will assist their students with the $300 fee.

While the change to the MOFTB’s rules for issuing permits raises many practical considerations for filmmakers, it also sparks debate about whether the fee will impact New York City’s standing within the independent film community.  Is the fee counter-productive to sustaining New York City as the capital of the independent film world?  Does the policy of charging an application fee for film permits reflect New York City’s appreciation for the role that independent film and filmmakers play for the City?  Is the MOFTB looking too much to Los Angeles as a model for how to capture capital from the City’s film industry?  New York City will never be able to match Los Angeles in terms of big-budget productions, and Hollywood will likely always remain the capital of studio film productions.  However, New York City has emerged as, and will hopefully continue to be considered, the capital of American independent film.  Along with tax credits and free police assistance, the City provides free parking privileges, free access to most exterior locations, discount cards, and also millions of dollars in free advertising on City bus shelters and New York City-owned media assets to promote productions that shoot at least 75% of their projects in New York City.  Producers love these amenities.

Further, New York City has several independent film theatres, it is the base for many independent film festivals, and is home to numerous independent film producers and enthusiasts.  Low-budget films reflect the values that are important to New Yorkers; those films that revolve around well-written scripts and intellectual topics rather than special effects and star power provide a counterpoint to Hollywood flashiness.  Just as New Yorkers sing their City’s praises when in the company of Los Angelinos, the New York independent film industry prides itself on the fact that the movies they create and support do more than just entertain.  Independent film is important to New Yorkers and to New York City.  We sincerely hope that the MOFTB will administer the $300 fee in such a way that reflects continued support for the art of independent filmmaking.

Steven C. Beer is a shareholder in the international entertainment practice of Greenberg Traurig’s New York office. Steven has served as counsel to numerous award-winning writers, directors and producers, as well as industry-leading film production, film finance and film distribution companies.