LIFT Productions (an acronym for Louisiana Institute of Film Technology) was the first concerted private sector effort to combat "runaway production" of film and television from the United States. In the 1990s the U.S. market lost over 100,000 production-related jobs,"Impact of the Migration of U.S. Film and Television”. United States Department of Commerce. 2001. "http://www.ita.doc.gov/media/filmreport.html as motion picture and television programming increasingly became manufactured offshore."Impact of the Migration of U.S. Film and Television Production". Press Release. United States Department of Commerce. 2001. http://www.ita.doc.gov/media/CommerceNews/filmmigration12001.htm . Retrieved on 2009-07-07 The outflow of work was in large part due to lucrative incentives offered by Canada, its provinces, and European Union members.
In 2002, at the urging of LIFT founders Malcolm Petal and John J Anderson, Louisiana passed a first-in-the-nation incentive program to compete directly with Canada. LIFT quickly leveraged those incentives to become one of the largest global manufacturers of made-for-television movies, low-budget feature films, music videos, and commercials. During its first five years of operation, LIFT was responsible for well over a billion dollars in production.
By 2007 LIFT had spread throughout the State of Louisiana, as well as opening satellite production houses in Arizona and Connecticut. It had also broken ground on a $200,000,000 production complex in downtown New Orleans.
However, in June 2007 Federal Bureau of Investigation agents raided LIFT's offices, making sweeping accusations of fraud, money laundering, and tax evasion, valued at tens of millions of dollars. Despite the sensational allegations, the investigation petered out, officially closing in 2009 without uncovering any crimes, fraud or abuse at LIFT. CEO and founder Malcolm Petal pleaded guilty in an unrelated bribery case. By that time, though, LIFT was a defunct organization. Its creditors continue to sue the State of Louisiana which refuses to honor tax incentives promised to LIFT, despite the fact that LIFT was cleared of any wrongdoing.Filings in the 19th Judicial District of Louisiana (East Baton Rouge Parish). Staircase v. Louisiana Dept. of Economic Development and College Productions v. Louisiana Dept. of Economic Development.
Early days
LIFT was a production house formed by New Orleans attorney Malcolm Petal and producer John J Anderson. Their stated goal was to create a production infrastructure in Louisiana to compete with Los Angeles and New York.States push tax breaks in hope of luring movie business BY CONNIE MABIN AP Business Writer, July 22, 2005 Associated Press Archive Throughout 2001 and 2002 the founders lobbied the Louisiana legislature to pass a production incentive modeled after Canada's. The duo testified that Louisiana could become immediately competitive with much larger markets by recruiting U.S.-based productions back from Canada. The legislature enacted the first of several incentive packages proposed by the LIFT founders on June 1, 2002. That same month LIFT officially opened its doors.
During its early days LIFT concentrated primarily on music videos and commercials. Through its partnership with HSI Productions of California, LIFT produced a continuous stream of videos for a wide array of artists, including Mariah Carey, Jessica Simpson and LeAnn Rimes, as well as several national ad campaigns, including spots for Lincoln and Payless Shoes.
The tax credit program was widely recognized and hailed for its generosity, applying to music videos and commercials, as well as films and television, and also because there was no ceiling on how much credit can be accrued per production or per year. There were three separate sets of production initiatives – a sales tax exemption, a labor tax credit encouraging productions to hire Louisiana labor and an investor tax credit that offered credit on as much as 15% on overall production costs.Woodward, Sarah. Oct. 7 2003. “Incentives put HSI up on the Bayou” (by Sarah Woodward) http://www.louisianaentertainment.gov/film/content.cfm?new=101&id=64 Spector, Josh. Oct 1, 2003. “Louisiana tax incentives get $100 million results” Louisiana Film and Television. http://www.louisianaentertainment.gov/film/content.cfm?new=30&id=64 Miller, Holly. Feb. 02, 2004. “Hollywood Execs love Louisiana film credit cash”, New Orleans City Business, http://www.louisianaentertainment.gov/film/content.cfm?new=41&id=64 originally at: www.neworleanscitybusiness.com Petal explained that "without an incentive program it's almost impossible to finance independent films and television movies... So this really brought independent filmmaking, from a production angle, back to the United States, this Louisiana incentive."Kennedy, Margaret, Sept. 5, 2006. “Louisiana uses movies to boost economy” News Voanews.com.
Expanding business
LIFT had initially made low-budget feature films for limited theatrical release, like the cult classics Evil Remains and Freshman Orientation. However, in 2004 it expanded aggressively into the movie-of-the-week market producing dozens of films for Lifetime, CBS, and A&E, including Christopher Reeve's last picture, The Brooke Ellison Story, and the critically acclaimed mini-series Elvis, which earned Emmy nominations for the LIFT Founders.
By the end of 2004, LIFT had over 500 employees on payroll and had entered into long-term production and distribution contracts with independent powerhouse Lions' Gate Entertainment. The partnership gained immediate box-office success with major releases, such as the comedy-classic Waiting..., and critical acclaim with art-house offerings such as Bug starring Ashley Judd, which earned legendary director Billy Friedkin the coveted Director's Award at the Cannes Film Festival. That year, LIFT had produced almost $75,000,000 in locally financed production and was on track to double that in 2005 with more than 30 productions."LIFT Relocation and Expansion”, Sept. 9, 2005. http://www.louisianaentertainment.gov/film/content.cfm?new=503&id=64
Meanwhile, LIFT continued to expand the scope of its distribution outlets, releasing Mr. Brooks, starring Kevin Costner, through MGM, and Factory Girl, starring Sienna Miller through the Weinstein Company.
While in 2001, movie production in Louisiana had an impact of just $30 million, by 2003, estimates were in excess of $100 million.Making Connections: A Regional Workforce Partnership Community Audit. Regional Workforce Demand Audit. Part 1 p.91 According to the Bureau of Labor Statistics, the motion picture industry in Louisiana grew by 22% per year between 2001 and 2007 with wages increasing 8.2% per year during that same period. A report released by the Economic Research Associates for Louisiana Department of Economic Development in 2007 found that the industry supported 6,230 jobs in Louisiana (3,310 directly and 2,920 indirectly), generated $203.7 million, and an average income of $32,700 per job. The "...$429.2 million of direct in-state spending for 2007 amounted to $763 million of economic benefit to Louisiana, when things like rents, royalties, profits, dividends, property taxes and various indirect benefits are factored in."States News Service, March 3, 2009. “Scalise: La Film Industry Shining Star in States Economy” http://www.louisianaentertainment.gov/film/content.cfm?new=1327&id=64
Wages within the state's motion picture industry increased 8.2 per percent per year between 2001 and 2007, according to the Bureau of Labor Statistics.
In calculating the impact of the motion picture industry on the states economy, the report noted that $429.2 million of direct in-state spending for 2007 ultimately amounted to $763 million of economic benefit to Louisiana, when things like rents, royalties, profits, dividends, property taxes and various indirect benefits are factored in.
Hurricane Katrina
LIFT had nine productions either actively shooting, or preparing to, in and around the New Orleans area in August 2005 (including The Last Time, starring Brendan Fraser and Michael Keaton). Budgets for these totalled over $100 million. Housing, production crews, and new set locations were all in place about a week after the hurricane hit.“LIFT Relocation and Expansion”, Sept. 9, 2005. http://www.louisianaentertainment.gov/film/content.cfm?new=503&id=64
When Hurricane Katrina hit, most movie studios abandoned Louisiana, citing the poor infrastructure, dangerous weather, and inability to find insurance. However, LIFT managed to relocate all its Louisiana productions in other parts of the state, including opening a major production center in Shreveport in the far north of the state.Louisiana's film industry weathers hurricanes By Michael Kunzelman, Associated Press Writer, November 23, 2005. Associated Press ArchiveTimes Picayune “Movies: Not Gone with the Wind” By Montoya, Maria Times November 5, 2005, P. C1 C2 Retrieved on 2009-07-07 "L.I.F.T. offered all of its Louisiana workers, including their families and pets, housing, relocation, and stipends to establish an expansion office in North Louisiana ($1.5 million aid package). ... All 500 workers on L.I.F.T.s payroll continue to receive paychecks without interruption despite closed banks and strained communications".
As Petal stated at LIFT's opening of its Shreveport facility, "Louisiana's incentive program has given it the opportunity to be the hub of the international production industry in the 21st century, but that only can take place if it is a statewide effort. Having an anchor for the industry, along the Northern I-20 corridor in Shreveport, is a crucial step in that journey."
Today Shreveport is one of the most active production locales in the United States. Thus, Katrina proved to be a significant growth opportunity for LIFT, which survived the disruption through a massive ground effort to move workers and equipment throughout the State. All of LIFT's productions were up and running again in less than a week, while most of the State was still shut down and reeling from the subsequent blast of Hurricane Rita. LIFT also kept the industry in Louisiana by offering all local film workers and their families a generous relief package, which included eight months or more of free housing and benefits, whether they worked on a LIFT production or not.
Subsequently, LIFT was the first production company to return to New Orleans after the storm, shooting Pride, starring Terrence Howard, in the spring of 2006. LIFT was successfully promoting Louisiana's new nickname, "Hollywood South". It "produced more than 30 films and TV shows, adding $250 million in much-needed revenues to a disaster-ravaged state."Markels, Alex. "Big Easy Boffo" December 10, 2006. http://www.louisianaentertainment.gov/film/content.cfm?new=960&id=64Big Easy Boffo The industry as a whole had brought $400 million in film investments to Louisiana. MovieMaker magazine ranked the state fourth in filmmaking in 2005._. Oct. 23, 2006. "Louisianas Hollywood South Lifts Again In New Orleans" BayouBuzz http://www.bayoubuzz.com/articles.aspx?aid=8583 Mayor Nagin also introduced significant initiatives moving New Orleans to the next level of the Trinity Industry with film, music, and video game production, and created a National Film Advisory Board to assist in making New Orleans a top-of-the-line place to film movies.