Crain's New York Business - December 17, 2012 - (Page 11)

DIVERSIFY YOUR HOLDINGS at America’s First Boat Show t JOHN AMMAN I Tax incentive makes NY Hollywood East n the early 2000s,tax incentives by various U.S.states and Canadian provinces were among the main reasons New York’s film industry was in decline. It was a reality that just would not go away. Sure, we had Law & Order and occasional big-budget features like Men in Black, but for the most part the typical production scenario was NYPD Blue, which shot a handful of days a year in New York and did the vast majority of its production work on an L.A. back lot. New York City had plenty of advocates (actors, directors, writers and others), but they weren’t always powerful enough to get a studio to keep an entire project in the city when it was far cheaper to limit New York production to location shots and do the bulk of the studio work in a state with a tax incentive. Even the forceful Dick Wolf, the creator of Law & Order, had to fight to keep his New York show in New York. For years, indigenous industry groups like the New York Production Alliance (a collection of New York-based producers, unions and industry vendors) were working with the state and city film offices to make New York more competitive. The result of this collective effort was a tax incentive, implemented in 2004,that is nothing like the Michigan program, whose failure was paraded across the front page of The New York Times. Bear in mind, the incentive was not put forward by the Motion Picture Association of America, nor was it the product of a backroom Albany deal. New York’s tax incentive is only for below-the-line employment (grips, electricians, camera operators, hair and makeup stylists, etc.) and the use of local stages and vendors. There are no tax breaks for money spent on actors, directors or writers. This is significant because in New York the bulk of local employment from productions comes from the below-the-line crew as well as local stages and vendor/rental houses. The focus on local labor and vendors could go a long way toward explaining why a study released this month by consulting firm HR&A Advisors,along with a 2009 Ernst & Young study, found that the New York film incentive is revenue-positive. The anecdotal evidence of the effect on jobs is overwhelming. I’ve been a union representative in the New York film industry for more than 20 years, and I’ve never seen anything like the levels of employment since the tax incentive was implemented and expanded. The old NYPD Blue production model is gone, thank goodness. Today, New York is a TV production center. Every major TV and cable network shoots series here. The major studios and independent producers make feature films here at a regular clip. Local employment continues to increase. Soundstages are expanding, as are industry vendors. The HR&A study only confirmed what we see every day. John Amman is a business representative at the International Cinematographers Guild, IATSE Local 600. It’s time to review your portfolio and invest in yourself. Come see what’s new for 2013! Find the best in boats and marine gear, engines and electronics at the world’s ﬁrst and longest-running boat show. Pre-shop, tickets & details at NYBoatShow.com T Jobs report: Season with a grain of salt he first official reading of Sandy’s impact on the area’s economy will come Thursday afternoon when the state Labor Department announces the November unemployment and jobs numbers. Economists expect the unemployment rate to go up, especially for New York City, Long Island and most of New Jersey, and a significant decline in the number of jobs. Some people have their fingers crossed for exactly that result. Gov. Andrew Cuomo and Gov. Chris Christie need bad news to help justify their enormous requests for federal aid. Unfortunately, or maybe fortunately, there is reason to believe the economic news might be better than expected. Earlier this month, to the surprise of virtually every national economist, the U.S. Department of Labor not only reported strong employment growth for November, it also said that it could find no impact at all from Sandy. If Sandy had caused big job losses in New York and New Jersey, the national numbers would have been affected to some degree. The most important trend in November: U.S. retailers hired three times as many workers as usual as they geared up for the holiday shopping season. New York stores prob- GREG DAVID ably did the same. Even if the news for New York City is bad this Thursday, Sandy might not be the reason. In both 2010 and 2011, the pace of job creation in New York City ebbed in the late fall. Jobs declined significantly in the last two months of each year. In both years, economists and reporters decided that meant the city’s economy was slowing. Instead, the number of new jobs surged in the early months of the following year. And when the Labor Department revised the previous year’s numbers—as it does every March when more comprehensive data are available—the fall months were restated upward.No slowdown had actually occurred. It turns out it is very hard to do accurate seasonal adjustments for an area as small as New York City for a time period as short as a specific month. So if there is a significant drop in employment, it may be because of the storm or it may just be what happens every year at this time. No one will really know until March. Finally, don’t put too much emphasis on an increase in the unemployment rate. Amid strong growth early in the year, the jobless rate jumped. Amid weak job growth in the second half, it declined—to 9.3% in October from 10% in July. The federal government derives the unemployment rate from a telephone survey of 60,000 households, but so few New Yorkers are called that the local number is subject to a large sampling error. The best rule of local-economics reporting is that one month’s numbers are not significant. It takes at least three months to make a trend. That is particularly important to remember when the November report comes out. December 17, 2012 | Crain’s New York Business | 11 http://www.NYBoatShow.com http://www.NYBoatShow.com http://www.crainsnewyork.com/podcasts

Table of Contents for the Digital Edition of Crain's New York Business - December 17, 2012

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
CORPORATE LADDER
OPINION
GREG DAVID
ALAIR TOWNSEND
REPORT: SMALL BUSINESS
FOR THE RECORD
CLASSIFIEDS
REAL ESTATE DEALS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crain's New York Business - December 17, 2012