State invested in Hollywood, but it could have made $30 million more elsewhere
For all their glitz and glamour, movies were a lackluster investment for New Mexico, a state executive said Friday.
Only two of 24 movies that the state invested in turned a profit for New Mexico, and it was a small one, said Steven Moise, the state investment officer.
Moise, right, said the state made mostly interest-free loans of $243.7 million to filmmakers who shot their pictures in New Mexico. In return, the state was to share in the profits.
But only "Book of Eli" and "Employee of the Month" made enough to cut in the state on profits. Those movies have made about $1.36 million for New Mexico.
The other 22 repaid the principal on their loans but reported zero profits, leaving the state with nothing more than what it started with.
In all, the 24 moviemakers spent $245.3 million in the state.
They created a total of 4,649 temporary jobs for New Mexico crews. Most of these were short-term, Moise said.
He appeared before the Legislature's interim committee on investments to provide an overview of the investment council's history with Hollywood.
Most of the loans to moviemakers were made between 2002 and 2008, and each was capped at $15 million.
One five-year, $15 million loan is still outstanding. It is for the television series "Crash."
The state is guaranteed repayment on it, said Charles Wollmann, a spokesman for the investment council.
The investment council in 2011 stopped the practice of making interest-free loans for movies in return for a chance at a share of profits. The 11-member council, chaired by Gov. Susana Martinez, decided the rewards were too paltry, the risks too great.
Though interest-free loans are gone, the state investment council remains open for business with producers, directors and screenwriters.
A moviemaker doing a project in New Mexico can still seek a loan from the investment council, but the terms would be similar to those of a bank. The state would receive interest for providing millions upfront to help launch a production.
Wollmann said inquiries for loans still occur, but no deals have been struck under the new arrangement in which film companies would pay interest.
New Mexico also has a rebate law to entice TV producers and moviemakers. They can recapture 25 percent of their qualified production expenses for shooting in New Mexico.
For example, a filmmaker who spends $20 million in the state can recoup $5 million from the New Mexico treasury. Up to $50 million a year in taxpayers' money is available for the program.
Legislators this year sweetened the pot for television series, offering them a 30 percent rebate.
Rep. Antonio Maestas, right, D-Albuquerque, pushed for the higher rebate, saying TV series can provide the state with more jobs than the typical movie.