Inside Nevada’s Blockbuster Potential with Kim Spurgeon

Welcome to On Production where I talk with the wonderful people that shaped the film industry. Today I'm joined by Kim Spurgeon, who is the director of the Nevada Film Office. Kim's journey through the industry has seen her transition from working on major film projects like Behind the Candelabra. And now you see me to a key role in nurturing film production in Nevada through the effective administration of the state's film tax incentive program, and her work doing that with the Nevada Film Office. So today, we're going to dive into her experiences and the impact of these incentives on the film landscape in the great state of Nevada. Kim, thanks for joining me.

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0:59  

Thanks for having me, Cameron, I really appreciate the invitation and the opportunity to speak with you and what it's like to film in Nevada. Absolutely. So

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1:06  

first, before we do that, I want to know, what are your day to day responsibilities as the director of the Nevada Film Office? And how do you support filmmakers to choose Nevada as their production location, you

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1:17  

know, we are primarily a service based government agency. So we exist to help productions and we do this for free. Our services cost nothing to the productions, and we are only here to help them succeed. And, you know, tell them the benefits of filming in the great state of Nevada. So my day to day consists of I do a lot of tax incentive program management at this time, and making sure that the qualifications are met for that program, all of the people who are interested in the program have the information that they need to be able to navigate it successfully. As well as all the you know, crossing the T's and dotting the I’s of the paperwork and the bureaucracy that you see the hoops you sometimes have to jump through to be able to utilize these programs, we try to make that as easy as possible. So we like to say that we're as hands on as the production wants us to be, we are here to help them succeed. And any even the littlest question I love being asked because it means that the production is taking the the tax incentive regulations seriously. And, you know, we can count on them to move through it honestly, and really use it to everyone's benefit both to the production and to the state. So a lot of my day is taken up with tax incentive stuff, emails, we get all kinds of different small, big questions. And we do a lot of community presentations as well. Film is a big topic of conversation for the state right now. You may have heard some, you know, people wanting to build studios in Las Vegas. And we get a lot of questions and as an authority in the film world for the state. We help navigate some maybe some misunderstandings when when these new stories come out, and that's kind of my my day to day I'm service based and my day is usually filled with answering questions and helping people.

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3:17  

That's wonderful. Now, I would love for you to give an introduction to Nevada's incentives. So you know, it is a notable location for filmmakers. Can you give us and give me an overview of the current film tax incentive program?

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3:31  

Yeah, so we do have a current program, it's funded at $10 million dollars annually. So it's not the biggest program out there, our base rate is 15%. On all of your Nevada qualified expenditures, that includes your Nevada crew, Nevada vendors above the line below the line all those costs, we do allow for non resident above the line to qualify at a lower rate of 12%. And our program does not allow non Nevada residents below the line to qualify. The two main thresholds to meet to qualify for the program are at least 500,000 in qualified spend in the state as well as 60% of your overall budget has to be spent in the state. And that is I think where we differ from a lot of other programs is having that requirement. And that has to include your pre production and production, but post can be excluded from that 60% calculation. If all of your post is completed elsewhere. We admittedly don't have a ton of post resources here we can accommodate maybe some lower budget things, but if it's a larger series or a larger feature film, then you'll probably need to post in LA New York, something like that. So those are the main qualifications. We do have two bonuses available an additional 5% If greater than 50% of your below the line crew or Nevada residents and that's calculated based on hours worked, and then an additional 5% If greater than 50% of your filming days occur in a Rule County, which right now is qualified as any county outside of Clark, which is where Las Vegas is

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5:07  

very helpful. Now, does any media type qualify in the state? So

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5:12  

I think our program allows for a lot more production types compared to other states films TV series, we do allow reality and talk shows and game shows to qualify commercials qualify for our program, things that don't qualify news events, sporting events, which Las Vegas has recently become a very much a sports capital. And those events do not qualify though little anecdote. I don't know if I should share this because it's an industry secret that something like all elite wrestling. They pretend like it's not scripted, but it is. So it technically qualifies for our program, because it's not regulated by the Athletic Commission, which means it's not a sporting event. It's scripted. It's a show and it qualifies for our program.

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5:59  

That's so interesting. I've heard some buzz about a new incentive program in the works. Can you tell us about it? Are there any significant changes, we should suspect maybe give us a hint at what is to come.

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6:11  

So last legislative session, and I will say that Nevada's legislature only meets once every two years, and they only meet from February to June in, you know, once every two years. So unless something is passed during that very small window, you have to wait until the next legislative session. And that's what we're in right now. So last session in 2023, there was a bill SB 496 introduced that would significantly change our tax incentive program. The basis of it was you know, we essentially had two groups wanting to make infrastructure investments in Nevada. And what the bill did was create a specific pot of incentive funds for zone one. And they would have access to any productions, that film on the zone one infrastructure build, which was a whole studio lot would have access to 95 million in tax credits. And then there was another group defined zoned to anyone who filmed on their property, once they it was built would have access to $80 million in tax credits. And then I think the bill allowed for the current program to be expanded to 15 million and that would be available for anyone else filming wherever, wherever else in the state. That bill did not pass in time. Last session. So we are we still have our current program, the groups who propose that bill, zone one and zone two, they're both still out there and very interested in investing in Nevada. And they have all both indicated that they will be pursuing another kind of bill like this. We don't have the exact bill language yet. But what I would suspect looking forward to next February 2025, when our legislature meets again, would be to see a bill, very similar, where we would be incentivizing the infrastructure by saying, you know, all of these productions who filmed on this piece of property where the company invested, you know, 500 million in the studio infrastructure in the state, they have access to this pot of funds. And then we'll have another smaller program for everyone else filming that is what I would expect to see. But we don't have the billing, which yet really

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8:21  

helpful. And you know, us here at Wrapbook in collaboration with you all, as soon as there's any news, we will definitely spread the word. I want to ask you. You mentioned before that the program as it's currently structured has a $10 million cap. Is there any remaining funding when is a good tip or trick for when people should apply to take advantage of the current

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8:44  

program? Great question. Our fiscal year does run July 1 Through June 30. So on July 1, we'll get a fresh 10 million in funding, and any unused funding rolls over from previous fiscal years. And we actually do have a surplus of funds available. So right now we have around 44 million for new productions to apply. And until that runs out, anytime is a good time to apply.

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9:11  

That's really great news. That's good to know. Now, here's something you know, Nevada conjures images of Elvis and the strip. Well, maybe not Elvis so much anymore. But Nevada has unbelievable beauty and really interesting, gorgeous, unique places to film. What other locations within the state do you think filmmakers should consider and why?

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9:35  

Well, you know, in the northern part of the state, and really our state is very diverse in terms of its landscape. What a lot of people don't realize is that Nevada is the most mountainous state. We have the most the highest number of unique mountain ranges I think it is. Anytime you look out a window, it has mountains somewhere in the background, and this has been to the chagrin of some filmmakers who go would film on a road? They're like, Where can we get Flatland? Like, that doesn't exist here, we're actually a very mountainous state. And up north in the Tahoe area, some of the most beautiful landscape, you could see Tahoe itself, Lake Tahoe is such a beautiful lake, you know, it's very clear water, it's got the mountain, that's how the water is formed is from that ice melting on the mountain and the snow. And, of course, Tahoe is known for its skiing as well. So that's great, we have the winding roads that kind of go through the mountainous areas up there. And then in the southern portion of the state in Las Vegas, of course, we're known for our red rocks, we have, there's a park called, you know, Red Rock, there's also the Valley of Fire that has a lot of the kind of otherworldly looking landscape. There's also a great place about three hours north of Las Vegas, called cathedral gorge State Park. And that's also an amazing place where if you're willing to make the drive, it has some of the most unique landscaping features you could imagine.

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11:04  

That's very helpful. I wanted to know, Kim, also, you know, in addition to these really wonderful locations in the state, can you talk to us about resources? So, you know, to really utilize the program, you mentioned qualified expenditure? Above, I think it was 60%. Was that right? But in many ways, the ability to do that is dependent upon the infrastructure and the crews and the capacity to film in the state, can you give us an understanding of like, the resources to produce in Vegas, and if a filmmaker or producer were to go to Vegas, but what could they do to find those resources and grew up so that they can take the most advantage of the incentive available,

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11:45  

I'll be a little honest here, perhaps a little too honest, the 60% is something that we are trying to change, because it is constricting, what we found is, you know, the reason it was implemented in the first place is because as a state, we're trying to attract the whole production. For a long time, you know, we've had Las Vegas units come to film, because Las Vegas is often a character in the story, and the production wants to come to Vegas and film. From the state's perspective, we're saying, you know, we want the whole production to build here, we want all the jobs, not just a portion of the jobs. So that's why the 60% requirement was enacted in the first place, it's actually acted as kind of an artificial cap on the level of productions that can film here, because they have to meet that 60% threshold. And if we have, you know, a $100 million film, scouting our area and looking to use the incentive, we don't have 60% of the resources needed for that film to be here. So we lose out on that kind of thing. And that's something that we're we're trying to get changed, because it is actually constricting, we do have resources, but we don't have the resources of LA. So we have some good crew, we're about one to two deep, we have some good vendors grip and lighting, we have a lot of those, we have some art department, but we're lacking other things, you know, we don't have star wagons doesn't exist here. So we have people with, you know, the high end Arby's who serve as the movie industry. So you would have to go that route or bring something in and again, that wouldn't qualify for the incentive. So that is part of our struggle here is getting the adequate resources and trying to build the industry. And that's one thing that I think that investing in infrastructure of studios would benefit the rest of the businesses that support this industry, the more space we have available for those productions to film here, the more the rest of the industry can grow. Because, you know, assuming that the incentive can keep those studios busy, you know, the support businesses can grow by having the work come to them.

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13:59  

That's great. And I actually wanted to chat about economic impact here in a minute. But to your previous point, it sounds like there are resources, we should keep our eyes open about legislative changes and the next kind of legislative session. But until then, I am curious, in your experience, how have you seen the film incentives impact both the local economy and the state's, you know, kind of cultural landscape? If

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14:25  

so, in Nevada, we're, I think, perhaps a unique case, in this instance, we were late to the party, we did not pass a tax incentive program until it went into effect January 1 of 2014. And if you look at the history of tax incentive programs throughout the nation and the world, a lot of states actually saw a trend in getting rid of their programs during that time. You know, you saw a lot of programs pop up in the early 2000s and start to make changes and really become aggressive in that space. And then after the Great Recession, you saw a lot of states cutback on these programs, and Nevada only joined the the tax incentive landscape after some of these other states had already cut back their programs. And at the time, you know, after the Great Recession, streamers still didn't exist yet Netflix was still sending out DVDs by mail. So the landscape of the industry and tax incentives has changed. So significantly, since Nevada has entered this space for our program, it was passed during the 2013 legislative session. And let's see, it went into effect January 1 2014. We got a lot of good initial responses the first, historically, the first film that took advantage of our tax incentive program was Paul Blart Mall Cop two. And while it is not an Oscar winner, it was a great economic benefit for our state. And then in September of 2014, our program was notoriously defunded when Tesla came to Northern Nevada to build a battery factory. So we were initially passed as a $20 million a year, four year pilot program. So we were funded at $80 million. Tesla was reallocated 70 million of that 80 million leaving our program with 10 million. And we, you know, we had it for that first year. And that was it. The next legislative session when we tried to get refunded our bill was a victim of a political back and forth. And at the end of the session, when they were all fighting over who gets what, our bill died, and it did not get passed, it did not get a vote. So we were unfunded until 2017, when we got our funding back at $10 million a year. And since then, we have struggled with the PR aspect in terms of a lot of people still think Tesla took our money and we don't have a program. So I'm happy to be on here and tell you that yes, we do. Not only that, but we we do have excess funds, excess

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17:01  

funds and a great program and a kind of a commitment. It seems to make the program better. That's great. Which leads me to my last question for you cam, which is for filmmakers interested in exploring Nevada for their next project. You'd kind of alluded to this that you love when a filmmaker asks particular questions because you can give them tips and tricks of navigating the state and the program very well. What advice would you offer to make the most out of the state's offerings and incentives? What are your tips and tricks?

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17:29  

Well, one, give us a call. We are here to help reach out ask your questions. We are a resource here to help you. So that's the number one tip and trick number two, hire local. I think there are a lot of there are a lot of jurisdictions throughout the United States where people, people are used to doing things a certain way. And those locals are the ones that can help navigate a production. The best way to deal with that, you know, there are parts of Nevada that are still very much Wild Wild West. And they don't have official, you know, permitting processes, but they have handshake deals, they have gentlemen's agreements. And as long as you know how to navigate those types of situations, it's the locals who can best help you navigate that. So I would say one, call us to hire local, and those will set you up for your best success here. That's

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18:24  

wonderful. Kim Spurgeon, thank you for joining me on On Production.

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18:27  

Thank you so much, Cameron and to Wrapbook for having me I really appreciate it.