PBS Hawaii – INSIGHTS: Do High-Tech and Film Tax Breaks Really Benefit Hawaii?

PBS Hawaii – INSIGHTS: Do High-Tech and Film Tax Breaks Really Benefit Hawaii?


>>MALIA: BUILDING UP LOCAL
TECH AND FILM INDUSTRYES COULD DIVERSIFY THE
ECONOMY AND KEEP OUR BEST AND BRIGHTEST IN HAWAI’I.
BUT ARE THE INCENTIVES TO DRAW IN TECH FIRMS AND FILM
PRODUCTIONS PAYING OFF DO THEY COST MORE THAN THEY’RE
WORTH? DO HIGH TECH AND FILM TECH OF TAX BREAKS
REALLY BENEFIT HAWAI’I?>>MALIA: COMING UP NEXT ON
INSIGHTS OPINION PBS HAWAI’I, DO HIGH TECH AND FILM TAX
BREAKS REALLY BENEFIT HAWAI’I?>>MALIA: ALOHA.
WELCOME TO INSIGHTS. I’M MALIA MATTOCH.
A HOST FOR INSIGHTSES ON PBS HAWAI’I.
FOR YEARS, HAWAI’I HAS BEEN LOOKING FOR A WAY TO SHIFT
FROM ECONOMY DRIVEN BY TOURISM TO ONE BASED ALSO
ON MODERN TECHNOLOGIES. THE SKILLED JOBS INVOLVED
WITH TECH INDUSTRY COULD KEEP OUR BEST AND BRIGHTEST
YOUNG MINDS IN THE ISLANDS WHILE GIVING A MUCH NEEDED
BOOST TO OUR ECONOMY. ONE CONTROVERSIAL EFFORT
WAS ACT 221 WHICH OFFERED HIGH TECH COMPANIES IN
HAWAI’I TAX CREDITS BUT CRITICIZED NOT OFFERING ANY
REAL WAY TO MEASURE WHETHER THEY PAID OFF.
2014 SIGNALS THE END OF THOSE HIGH TECH TAX BREAKS
BUT THE STATE STILL HAS FOUR YEARS TO SEE WHETHER TAX
INCENTIVES FOR FILM, TELEVISION AND DIGITAL MEDIA
WILL DRAW MORE PROJECTS AN MORE DOLLARS TO THE
ISLANDS. DO HIGH TECH AND FILM TAX
BREAKS REALLY BENEFIT HAWAI’I? WE INVITE YOU TO
JOIN OUR CONVERSATION, BY CALLING, E‑MAILING OR
TWEETING YOUR QUESTIONS AND COMMENTS.
NOW, TO OUR PANEL. SENATOR SUMNER LA CROIX IS
AN ECONOMIST WITH UH‑ERO, ECONOMIC RESEARCH
ORGANIZATION AT THE UNIVERSITY OF HAWAI’I.
UH‑ERO MAKES ECONOMIC FORECASTS TO HELP POLICY
MAKERS, BUSINESSES AND OTHER MEMBERS OF THE
COMMUNITY UNDERSTAND THE POTENTIAL CONSEQUENCES OF
THEIR FINANCIAL DECISIONS. DONNE DAWSON IS THE STATE
FILM COMMISSIONER RESPONSIBLE FOR PROMOTING
HAWAI’I AS A FILMING DESTINATION AND DEVELOPING
HAWAI’I’S FILM, TELEVISION AND DIGITAL MEDIA INDUSTRIES.
>>SHE RETURNED TO THE POSITION 2 YEARS AGO AFTER
LEADING THE AGENCY FROM 2001 TO 2009.
HAWAI’I WAS INSTRUMENTAL IN GETTING HAWAI’I’S FIRST FILM
TAX CREDIT PASSED. MELE JAMES IS THE PROGRAM
MANAGER FOR THE BLUE START ‑UPS TECHNOLOGY
ACCELERATOR. WHICH WAS FOUNDED BY VIDEO
GAME DESIGNER HENK ROGERS. LAST MONTH, MELI WAS NAMED
PRESIDENT OF THE HAWAI’I VENTURE CAPITAL
ASSOCIATION, A GROUP THAT FOSTERS ENTREPRENEURIAL
DEVELOPMENT. RICARDO GALINDEZ IS
COFOUNDER OF ISLAND FILM GROUP, WHICH HAS PRODUCED
MOVIES THAT INCLUDE PRINCESS KAIULANI AND SOUL
SURFER PRIOR TO FORMING THE FILM GROUP, EVERS A PARTNER
AT GOODSILL, ANDERSON, QUINN & STIFEL WHERE HE
REPRESENTED STUDIO CLIENTS FROM INDEPENDENT
FILMMAKERRERS TO 20TH CENTURY FOX AND WARNER
BROTHERS. WELCOME ALL.
THANK YOU FOR JOINING US THIS EVENING.
MAY I START WITH YOU? BOTTOM LINE, DO TAX CREDITS
BRING MONEY AND JOBS TO HAWAI’I?
>>IT ALL DEPENDS. THERE’S GOOD TAX CREDITS
AND THERE’S NOT SO HOT TAX CREDITS.
WE GENERALLY WANT TO OFFER TAX CREDITS WHEN WHAT WE
HAVE A SITUATION WHERE THERE’S SPILLOVERS TO THE
REST WAS COMMUNITY. WHAT THE WHEN THE REST OF
THE COMMUNITY GETS POSITIVE BENEFITS IF THIS INDUSTRY
EXPANDS. EASY TO SEE THAT WITH SOME
TYPE MUCH TAX CREDITS. CHILD CAR SEATS, IF WE HAVE
MORE PEOPLE WITH CHILD CAR SEATS FEWER KIDS GET
INJURED. FEWER KIDS GET INJURED, OUR
MEDICAL BILLS GO DOWN. THERE’S A LOT TO BE SAID FOR
THOSE TYPES OF CREDITS. THERE’S A GREAT CREDIT OUT
THERE, R AND DID. TAX CREDIT, WHICH GIVES
SUBSIDIES TO FIRMS WHO DO R AND D RESEARCH AND
DEVELOPMENT. AND RESEARCH AND
DEVELOPMENT SPILLS OVER TO OTHER FIRMS IN THE INDUSTRY,
AND ALSO SPILLS OVER TO OTHER FIRMS IN OTHER
INDUSTRIES. IT’S A GREAT TAX CREDIT.
MOSTLY BECAUSE IF, WITHOUT THE TAX CREDIT, FIRMS
WOULDN’T TAKE INTO ACCOUNT THE SPILLOVERS TO THE OTHER
PEOPLE. FIRMS TEND TO TAKE INTO
ACCOUNT THE BENEFITS THAT THEY GET.
THOSE TYPE OF TAX CREDITS ARE GREAT.
TAX CREDITS ARE BENEFIT SPECIFIC INDUSTRY.
SOME OF THEM CAN BE OKAY. OTHERS HAVE I THINK PROVEN
RECKLESS AND DISASTROUS IF WE LOOK AT THE HISTORY OF
THEM OVER THE LAST DECADE.>>MALIA: THAT BEING YEAR
SPEAKING OF ACT 221?>>I THINK ACT 221 WAS A
REALLY RECKLESS ENDEAVOR BY THE STATE.
IT PROVIDED 80% TAX CREDITS ESSENTIALLY.
TO A VARIETY OF FIRMS AND SELECTED INDUSTRIES.
80%. WAY TOO MUCH FOR THE STATE
TO BE PAYING. SOMEBODY WHO MAKES
$1 MILLION INVESTMENT WOULD FIND 800,000 OF THAT
REFUNDED BY THE STATE. THE ONLY HAVE $200,000 IN THE
GAME. EVEN IF THAT FIRM LOSES
MONEY, OFF THAT 1 MILLION DOLLAR INVESTMENT, ONLY
400,000 IS MADE BACK. THE PERSON, OFF THE 200,000
NET INVESTMENT, MADE 200,000 IN PROFIT EVEN THOUGH THE
INVESTMENT ITSELF HAS BEEN UNPROFITABLE.
THAT WAS A BIG PROBLEM WITH THE ACT.
CREDITS WERE WAY TOO HIGH. EASY TO SEE WHY THE STATE
LEGISLATURE PASSED IT AND SIGNED INTO LAW.
AT THE TIME, LATE 1990’S, WE WERE DESPERATE.
ECONOMY WAS IN TOUGH SHAME.
EFFORT TO TRY TO GET THINGS GOING.
OVER THE NEXT 10 YEARS, WE LEARNED THAT IT WAS A REALLY
BAD EFFORT. THAT’S THE TYPE OF THING WE
NEED TO AVOID TODAY.>>MALIA: WITH ACT 221 STOP
ISSUING CREDIT THIS IS YEAR, THIS BEING THE END, MELI HOW
DO WE MOVE FORWARD AND BUILD A THRIVING TECH
INDUSTRY IN HAWAI’I? IS IT POSSIBLE?
>>IT IS POSSIBLE. I THINK REGARDLESS OF THE
POSITIVE AND NEGATIVE VIEWPOINTS OF ACT 221, IT
SPURRED INVESTMENT DOLLARS TO HIGH TECH START‑UP.
I’M NOT GOING TO SPEAK PARTICULARLY TO ANY QUALITY
OF EACH START‑UP, BUT DEFINITELY, INCREASED
INVESTMENT ACTIVITY IN THE ARENA.
WITH THAT BEING SAID, THE HIGH GROWTH INITIATIVE WHICH
IS $20 MILLION IS INCREDIBLY SUCCESSFUL SO FAR.
THIS POINT IS INCREASE ENTREPRENEURIAL
DEVELOPMENT, RESEARCH COMMERCIALIZATION, AS WELL
AS MOBILIZE THE START‑UPS INVESTMENT CAPITAL.
>>MALIA: FOR THOSE NOT AWARE OF THE HIGH GROWTH IN
SHIFT, WHEN DID IT START? HOWIT WORK?
>>YES. SO ESSENTIALLY, IT’S A
COMBINATION OF STATE AND FEDERAL FUNDING.
AND WHAT THEY DO IS MATCH, FOR EXAMPLE, BLUE START‑UP
IS A COMPANY THAT I WORK FOR.
OUR FUND IS 50% PRIVATE INVESTMENT AND 50 PERCENT
STATE FUNDING. LOOK BACK IN THE DAY, THERE
WERE ENTREPRENEURS WHO WERE VERY EARLY STAGE.
WITH ACT 221, MAYBE THEY WERE GETTING INVESTMENT
WHEN THEY WEREN’T QUITE READY AND THERE THERE WAS
NO REAL FOLLOW‑ON INVESTMENT.
WE’RE TRYING TO CREATE THIS LINE WHERE THERE’S
ENTREPRENEURIAL IDEA AND NOW WE HAVE MONEY WITH
HIGH GROWTH INITIATIVE FOR THE ACCELERATORS.
MENTOR DRIVEN EDUCATIONAL PROGRAM FOR
ENTREPRENEURS TO GROW THEIR BUSINESS, GET SOME
INVESTMENT. NEXT STAGE IS FEED FUNDING.
HIGH GROWTH INITIATIVE HAS ALSO PUT MONEY INTO SEED
FUNDING LOCAL FUNDS. AND THEN ALSO, SERIES A
LOCAL FUNDS. KIND OF CONTINUING THAT LINE
TO KEEP MORE START‑UPS HERE, CONTINUE TO GROW THE
ENTREPRENEURIAL ECOSYSTEM, SO THAT THEY
DON’T HAVE TO LEAVE AS SOON AS THEY CREATE AN IDEA.
SO WE’RE TRYING TO BUILD THAT AND OBVIOUSLY, IT’S
GOING TO TAKE NOT ONE OR TWO YEARS.
THIS IS A LONG TERM INVESTMENTS.
WE LOOK AT SOME OTHER STATES THAT HAVE DONE IT
SUCCESSFULLY, LIKE TEXAS OR OHIO.
KIND OF LIKE FUND OF FUNDS SO THE STATE ISN’T INVESTING
DIRECTLY INTO PARTICULAR START‑UPS.
INVESTING IN FUNDS SUCH AS BLUE START‑UPS, END BLOOM.
AND LOOKING TO DIVERSIFY AND GROW THE ECOSYSTEM HERE.
>>MALIA: IS IT ENOUGH OR DO YOU THINK THE STATE HAS TO
DO MORE?. I THINK THE STATE ‑‑ I’D LOVE
TO SAY THE STATE HAS TO DO MORE.
I THINK AS WE WERE GROWING THESE FUNDS, WE ALSO ARE
TRYING TO GROW THE COMMUNITY HERE AS WELL.
SO SO MUCH OF THE INNOVATION HAPPENS WHERE
THERE IS A THRIVING COMMUNITY AND THE STATE
AND THE CITY AND WE CAN ALWAYS BE DOING MORE TO
HELP GROW THAT AS WELL. I LIVED IN SILICON VALLEY FOR
11 YEARS, BEFORE MOVING BACK HOME, AND TAKING A
LOOK AT WHAT WERE THE KEY THINGS THAT MAKE IT WORK
OVER THERE, OBVIOUSLY, ACCESS TO CAPITAL, AND THIS
AMAZING COMMUNITY OF PEOPLE AND EVENTS
HAPPENING AND JUST IDEAS GROWING, THAT IF WE CAN DO
MORE OF THAT HERE, OF COURSE, ATTRACTING MORE
TALENTED TO THE ISLANDS, SO A LOT OF THAT IS RECRUITMENT,
RETAINMENT, AND DEVELOPMENT OF THE TECH
TILE IN GENERAL, BRINGING PEOPLE BACK, KEEPING THEM
HERE SO THAT THERE ARE GREAT IDEAS TO INVEST IN.
>>MALIA: DONNE, LET’S JUMP OVER TO FILM.
WE’VE HAD SOME GREAT HIGH PROFILE PRODUCTIONS OF LATE
IN HAWAI’I. REALLY BANNER COUPLE OF
YEARS. HOW MUCH HAVE FILM CREDIT
HAS TO DO WITH THAT?>>I THINK THEY’VE HAD
EVERYTHING TO DO WITH THAT. IF YOU LOOK AT THE HISTORY
OF THIS PRODUCTION TAX CREDIT KNOWN AS ACT 88 NOW
SLASH 89, REFUNDABLE PRODUCTION TAX CREDIT THAT
HAS GENERATED MORE THAN $2 BILLION IN DIRECT SPENDING
SINCE IT WAS ESTABLISHED IN 2006.
>>MALIA: 88, 89 TOOK THE PLACE OF THE FILM COMPONENT OF
221? IS THAT CORRECT?>>IT DID.
I MEAN, THERE WAS SOME CROSSOVER, BUT I WOULD LIKE
TO SAY THAT 221 WAS NOT ALL THAT BAD.
IT DID SOME VERY, VERY GOOD THINGS FOR HAWAI’I AND NOT
THE LEAST OF WHICH WAS ATTRACTETH TALENT HERE ON
THE CREATIVE SIDE. BUT IT WAS NOT TAILOR‑MADE
FOR FILM. IT WAS A LOT MORE COMPLEX
AND I THINK WITH REGARD TO OUR CREDIT, ACT 88, WE
NEEDED SOMETHING THAT WAS GOING TO BE READILY
ACCESSIBLE. THAT WAS GOING TO BE EASILY
QUANTIFIABLE BECAUSE AT THE RATE THIS INDUSTRY MOVES,
THEY NEED TO KNOW IN AN INSTANT WHAT KIND OF COST
SAVINGS THEY’RE GOING TO BE ABLE TO REALIZE BY COMING
HERE BECAUSE THOSE DECISIONS ARE MADE AT SUCH
LATE STAGE IN THE GAME. AND THEY CAN CHANGE.
ON A DIME. MORE THAN 40 STATES IN THE
U.S. HAVE AGGRESSIVE INCENTIVE PROGRAMS.
AND HAWAI’I HAS THIS DISTINCTION OF COMPETING
MORE WITH OTHER COUNTRIES THAN WE DO OTHER U.S.
JURISDICTIONS AND SO THE DIFFICULTY FOR US IS THAT WE
ARE COMPETING WITH NATIONS. WE ARE, IT’S DIFFICULT TOO IN
THAT WE DON’T HAVE THE SAME RESOURCES THAT WE CAN
BRING TO BEAR. HAVING SAID THAT, OUR CREDIT
IS NOW THE LEGISLATURE. WE’RE VERY GRATEFUL FOR AN
INCREASE THAT WE RECEIVED LAST YEAR.
THAT TAKES IT TO 20 AND 25%. SORE ESSENTIALLY, THAT IS
TWENTY CENTS BACK ON EVERY DOLLAR YOU SPEND ON OHUA
ASSOCIATED WITH THE PRODUCTION.
AND 25% FOR ALL THE NEIGHBOR ISLANDS.
WE WANT TO GROW THIS INDUSTRY STATEWIDE.
WE ALSO WANT TO SHOWCASE A ‑‑ DISVERSITY STATEWIDE
AND THE IMPORTANT THING TO REMEMBER IS THAT YOU ARE
NOT GIVING THIS CREDIT OUT UNLESS THERE IS SIGNIFICANT
DOLLARS BE SPENT. EVERYTHING THAT QUALIFIES
FOR THIS CREDIT IS SUBJECT TO HAWAI’I TAX.
THAT’S WHAT MAKES IT A QUALIFIED EXPENDITURE.
AND ‑‑>>MALIA: IN OTHER WORDS, IT
HAS TO BE THAT THAT FILM PRODUCTION PAID A SALARY TO
A LOCAL HAWAI’I PERSON WHO IS PAYING STATE TAXES,.
>>RIGHT.>>MALIA: THAT WOULD BE AN
EXAMPLE. IT WOULD.
BUT IT IS INCLUSIVE IN ‑‑ IT RELATES TO ALL
EXPENDITURES, WHETHER THEY BE LABOR, WHETHER THEY BE
ALL GOODS AND SERVICES THAT ARE SUBJECT TO HAWAI’I TAX,
WHATEVER THAT MAY BE. G.E.T., INCOME TAX, T.A.T., IN
THAT SENSE, IT IS GOOD SUPPORT FOR THE STATE AND
THERE ARE LAYERS OF GIVE BACK THAT THE STATE REALIZES
FROM THE CREDIT. ONE IS THE WORK FORCE
DEVELOPMENT AND EDUCATIONAL COMPONENT FOR
EVERY PRODUCTION THAT QUALIFIES FOR THIS CREDIT,
THEY HAVE GOT TO MAKE A CASH OR IN KIND CONTRIBUTION
TO A LOCAL PUBLIC OR CHARTER SCHOOL, OR WORK
WITH ONE OF OUR UNIONS TO DO INTERNSHIP PROGRAMS.
TO DATE, WE HAVE HAVE ON THE MAGNITUDE OF MORE THAN
$800,000 IN CASH AND IN KIND CONTRIBUTIONS THAT HAVE
COME IN AS A RESULT OF THE CREDIT.
>>MALIA: RICK, YOU WERE INVOLVED WITH PRINCESS
KAIULANI. WOULD THAT FILM HAVE BEEN
MADE WERE IT NOT FOR TAX CREDITS OR WAS IT SIMPLY AN
ADDITIONAL BENEFIT?>>THAT FILM WOULD NOT HAVE
BEEN MADE. THAT’S ONE OF THE BENEFITS
OF ACT 221. IN 2004, WE REPRESENTED
THREE DIFFERENT FILM STUDIOS THAT FILMED TELEVISION PILOTS
HERE IN HAWAI’I. THERE WAS A FOURTH ONE.
SO THERE WERE FOUR TELEVISION PILOTS FROM 2004
ALL BECAUSE OF ACT 221. OUT OF THE THOSE FOUR,
THREE OF ONE WERE PICKED UP TO ZEROES WHICH IS UNHEARD
OF IN HOLLYWOOD. USUALLY IT’S ONE OUT OF 20 OR
30. THAT JUMP START THAT WE GOT
WITH ALL OF THOSE PRODUCTIONS COMING HERE AT
THE SAME TIME, FILM AND TV, CAN YOU GO TO FILM SCHOOL,
BUT THE REEL FILM SCHOOL WHEN YOU START YOUR WAY AS
A PRODUCTS ASSISTANT AND WORK YOUR WAY UP.
ON‑THE‑JOB TRAINING. THAT’S WHAT ACT 221 DID,
ALLOWED TO US HAVE A LOT OF PRODUCTIONS HERE.
PRINCESS KAIULANI WAS ONE OF THEM.
THAT TRAINED A WHOLE NEW SEGMENT OF CREW WHICH IS
ANOTHER THING THAT YOU NEED BESIDES THE TAX CREDIT.
YOU NEED PEOPLE HERE THAT KNOW HOW TO DO THE JOB.
BECAUSE OTHERWISE, THEY’RE SAYING WELL, WE NEED TO FLY
PEOPLE IN AND WE NEED TO PUT THEM IN HOTELS AND PAY THEM
PER DIEM. EXTRA SALARY BECAUSE
THEY’RE AWAY FROM HOME. SO THE TAX CREDIT IT SEVER
ISN’T ENOUGH. IT’S ALSO THE WORK FORCE.
>>MALIA: HAVING A RESIDENT WORK FORCE THAT CAN FILL
THE POSITIONS.>>
>>RIGHT ONE OF THE THINGS THAT WE WERE ABLE TO DO
WITH ACT 221. FEW QUESTIONS. WHAT IS THE HIGH TECH
DEVELOPMENT CORPORATION AND WHERE DOES IT FIT? WHAT
DOES THE PANEL THINK OF HIGH TECH DEVELOPMENT
CORPORATION?>>THE HIGH TECH
DEVELOPMENT HTDC, IS ALSO WORK WITHIN THE HIGH
GROWTHS INITIATIVE AND HAWAI’I STRATEGIC
DEVELOPMENT CORPORATION. THEY’RE IN THE MANOA
INNOVATION CENTER AND WE THINK THEY’RE GREAT.
WE WORK VERY CLOSELY WITH THEM AS WELL AS HVCA.
IN TERM TERMS OF DEPLOYING P CAPITAL FOR OUR START‑
UPS, AS WELL AS INVESTING A LOT OF THE COMMUNITY
EFFORTS AROUND WHAT’S GOING ON HERE.
SO ESPECIALLY WITH MIC, AND THAT BEING A HUB, AND A PLACE
FOR A LOT OF THESE EARLY STAGE START‑UPS TO GO TO
WHERE THEY ARE ABLE TO GET OFFICE SPACE, GET ACCESS TO
RESOURCES, THEY’RE DOING INCREDIBLE JOB AND REALLY
HELPING TO CULTIVATE THIS ECOSYSTEM.
>>MALIA: ONTARIO, CANADA HAS A 1 TO $2 BILLION FILM
INDUSTRY BUT CANNOT FILM YEAR‑ROUND.
SINGAPORE ISLAND NATION THAT DOES WELL IN THIS
INDUSTRY. WHAT CAN HAWAI’I DO TO GROW
INDUSTRY. GETTING BACK TO THE POINT OF
HAWAI’I NEEDS TO COMPETE NOT JUST WITH LOUISIANA AND
ALSO WITH OTHER COUNTRIES.>>YES.
WE HAVE A LOT GOING FOR US IN THAT REGARD BECAUSE WE
DO HAVE WEATHER THAT ALLOWS FOR FILMING YEAR‑
ROUND. ON LOCATION, BUT IT REALLY
HAS A LOT TO DO, HAWAI’I’S MARKETABILITY IS AS LOCATION
HAS A LOT TO DO WITH OUR ACCESSIBILITY TO THE
CONTINENT AND LOS ANGELES SPECIFICALLY.
THE MORE DIFFICULT AND CHALLENGING IT IS TO GET TO A
LOCATION, ESPECIALLY LOCATION THAT IS IN ANOTHER
COUNTRY, THAT IS NOT MAYBE AS DEVELOPED,
INFRASTRUCTURE IS NOT AS DEVELOPED OR THEY DON’T
HAVE THE DEPTH OF LABOR THAT WE DO, I MEAN, HAWAI’I IS
CELEBRATING 100 YEARS OF FILM PRODUCTION IN HAWAI’I
JUST LAST YEAR. THAT IS A LOT OF YEARS THAT
WE HAVE HAD TO BUILD UP OUR INDUSTRY.
AND TO THE EXTENT THAT WE ARE WELL DEVELOPED, THAT IS
ALL THE MORE COST SAVINGS THAT PRODUCTIONS REALIZE
WHEN THEY COME HERE BECAUSE THAT INCENTIVE THAT
THEY RECEIVE IS NOT ERODED BY THE AMOUNT OF CREW AND
EQUIPMENT AND SUCH THAT THEY WOULD HAVE TO BRING IN
TO A REMOTE LOCATION.>>IT’S USEFUL TO REMEMBER
THAT 55% OF ALL OF THE FILM AND TV PRODUCTION IN THE
UNITED STATES IS IN CALIFORNIA.
MOST OF THAT IS ACTUALLY IN LOS ANGELES AREA.
WE’RE VERY CLOSELY LINKED IN WITH LOS ANGELES.
REALLY GREAT AIR CONNECTIONS.
MADE THE PEOPLE IN THE INDUSTRY HAVE BEEN HERE
BEFORE. WE’RE ALSO A BIT OF
BENEFICIARY I THINK OF BETTER COMMUNICATIONS.
THE FACT THAT NOW PEOPLE CAN COME OUT HERE AND DO
SKYPE CONFERENCES WITH PRODUCERS.
AND OTHER POEM IN THE STUDIOS IN LOS ANGELES, IS A
BIG DEAL NOWADAYS. BEFORE, IT WAS MUCH MORE
DIFFICULT TO MONITOR DISTANT PRODUCTIONS.
OF COURSE, ON THE OTHER HAND, IT’S ALSO RELATIVELY
EASY TO DO THAT TYPE OF MONITORING OUT OF FIJI OR
TAHITI.>>MALIA: EASIER AND EASIER.
FROM ECONOMIST POINT OF VIEW, IS THERE ANY WAY TO
SORT OF GAUGE THE AMOUNT OF JOBS THAT HAVE BEEN
CREATED IN HAWAI’I BECAUSE OF THESE TAX CREDITS,
INCENTIVES, THE ANCILLARY BUSINESS THAT COMES FROM
IT?>>YEAH.
YOU KNOW, I MEAN THE REPORT WHICH WAS PREPARED BY THE
HAWAI’I FILM OFFICE AND BY DBEDT, LOOKING AT THE
NUMBERS TODAY, AND IT BASICALLY SHOWS THAT OUT OF
THE ENTIRE INDUSTRY, THERE WAS A LITTLE OVER 5,000 JOBS
CREATED. IT’S DIFFICULT TO SAY HOW
MUCH OF THAT CAME BECAUSE OF THE CREDIT.
MUCH DEPENDS UPON WHAT THE EFFECTIVENESS OF THE
CREDIT IS. FOR EXAMPLE, THERE NO FILM
INDUSTRY HERE, NO 20% CREDIT ALL THE JOBS WOULD GET THE
20%. 2/3 OF THEM WOULD BE HERE,
AMOUNT OF THE JOBS CREATED BY THE CREDIT WOULD BE MUCH
LESS.>>MALIA: YOU’RE SAYING THESE
PRODUCTIONS WOULD NOT BE HAPPENING?
>>RIGHT. YOU HAVE TO CONSIDER THE
LANDSCAPE IN WHICH WE ARE OPERATING.
WE ARE EXISTING IN THE MOST COMPETITIVE CLIMATE EVER IN
THIS INDUSTRY. AND THAT IS GLOBAL
COMPETITION. SO THESE DECISIONS ARE MADE
LIKE I SAID, THEY’RE MADE VERY LAST MINUTE AND THEY CAN
CHANGE ON A DIME AS YOU WELL KNOW.
WE CAN HAVE PRODUCTIONS THAT ARE ON THE GROUND
HERE THAT ARE FULLY ENGAGED WHO CAN PULL UP
STAKES AND GO PLACE ELSE BECAUSE.
>>MALIA: WE SPOKE EARLIER ABOUT EXAMPLE THAT THERE
WAS RECENTLY AN ANGELINA JOLIE MOVIE LOOKING VERY
SERIOUSLY AT HAWAI’I. TELL US ABOUT THAT.
>>BASED ON THE NOVEL UNBROKEN AND IT IS A PASSION
PROJECT OF HERS. I THINK THAT WE LOST IT TO
AUSTRALIA FOR A VARIETY OF REASONS.
BUT INCENTIVES HAD A LOT TO DO WITH IT.
THERE WERE SOME VISA ISSUES AS I UNDERSTAND, BUT AGAIN,
THE AUSTRALIAN GOVERNMENT IS SERIOUS ABOUT WOOING THIS
BUSINESS FROM THE STATE. A GOOD EXAMPLE, THE BRITISH
COLUMBIA FILM COMMISSION, THIS WHOLE INCENTIVES GAME
STARTED AS A RESULT OF PRODUCTION GOING NORTH TO
VANCOUVER. AND BRITISH COLUMBIA FILM
COMMISSION IS THE SAME OFFICE AT HAWAI’I FILM OFFICE.
1978, BOTH FORMED. THAT IS NOW AN OVER A BILLION
DOLLARS A YEAR INDUSTRY. AND YOU COMPARE THE
PROVINCE TO THE STATE OF HAWAI’I, BUT IT IS BECAUSE THE
GOVERNMENT, PROVINCIAL AND NATIONAL GOVERNMENT OF
CANADA SAID, THIS IS AN INDUSTRY THAT WE’RE GOING
TO SUPPORT. IT IS A GOOD, CLEAN INDUSTRY
THAT PROVIDES THOSE WELL PAYING JOBS THAT HAS ALL OF
THE PROMOTIONAL VALUE AS WELL.
SO THERE ARE HUGE BENEFITS FOR THE STATE AND I THINK
WE’RE IN THIS GAME FOR THE LONG HAUL.
>>ONE OF THE BIG THINGS IS WHAT THE SIZE OF THE CREDIT
IS. IN CANADA, THE CREDIT RANGE
ANYWHERE FROM 20% UP TO 40%.
THEY’RE AVERAGING NOW A LITTLE OVER 30%.
WHAT’S HAPPENED IN RECENT YEARS, THERE’S BEEN AN ARM’S
RACE AMONG THE VARIOUS STATES AND COUNTRIES.
SOMEBODY OFFERS SLIGHTLY CREDIT.
PRODUCTIONS DO MOVE IN RESPONSE TO THE CREDIT.
>>OTHER STATES HAVE TO RESPOND BY OFFERING HIGHER
COUNTRIES. AS THE CREDITS GET HIGHER
AND HIGHER, COST TO THE STATE GETS HIGHER.
AT THAT POINT, THERE IS GOING TO COME A POINT WHERE THE
CREDITS AREN’T WORTHWHILE. WHEN I CRANKED OUT THE
NUMBERS TODAY, WHAT I BASICALLY FOUND WAS THAT
GIVEN THE CURRENT CREDIT LAST YEAR, THERE WAS
$33 MILLION EXPENDED BY THE STATE IN GIVING BACK REFUNDS
TO FILM AND TV COMPANIES. THE STATE TOOK IN 20 MILLION
MORE DOLLARS. THERE WAS A NET, $13 MILLION
DEFICIT FROM THE CREDIT. THAT’S ASSUMING THAT ALL OF
THE JOBS WERE ACTUALLY CREATED BY THE CREDIT.
IF SAY HALF OF THE JOBS WERE CREATED BY THE CREDIT, THE
CREDIT JUST BREAKS EVEN. IF WE START TO LOOK AT THE
INCOME CREATED IN THE COMMUNITY, WE LOOK AT THE
DEFICIT THAT THE STATE HAS TO FUND, HALF THE JOBS ARE
CREATED BY THE CREDIT, WE END UP WITH $26 MILLION
DEFICIT. THAT $26 MILLION DEFICIT,
THAT’S A REASONABLE AMOUNT OF MONEY TAXES HAVE TO BE
RAISED BY 26 MILLION OR $26 MILLION WORTH OF
SPENDING CUTS. ON THE OTHER HAND,
HOUSEHOLD INCOME WAS CREATED TOO.
SUBSTANTIAL AMOUNT OF HOUSEHOLD CREATED BY THE
ADDITIONAL FILM JOBS. AT THE FILM CREDIT, FILM AND
TV CREDIT CREATING HALF OF THE JOBS IN THE INDUSTRY,
JUST ABOUT BREAKS EVEN. IF IT CREATES MORE, IT’S A
POSITIVE THING FOR THE STATE. WE REALLY DON’T KNOW
EXACTLY HOW MANY EXTRA JOBS IT CREATES.
>>WHAT YOU MEASURE AS WELL.
ONE OF THE THINGS THAT’S DIFFERENT ABOUT OUR
INDUSTRY OUR PRODUCTION INDUSTRY HERE, WHICH IS A
GREAT THING, GREAT SELLING POINT, BUT ALSO A CHALLENGE,
IS BUY AND LARGE, OUR CRY DOESN’T TRAVEL.
IF THE MOVIE WE’RE STARTING NOW, OUR PRODUCTION
MANAGER IS FROM LOS ANGELES.
HE WAS JUST ON A JOB IN NORTH CAROLINA.
IF YOU LIVE IN LOS ANGELES AND WORK IN THE FILM
INDUSTRY, YOU PROBABLY TRAVEL ALL OVER THE COUNTRY
OR ALL OVER THE WORLD. VERY FEW OF OUR CREW
PEOPLE TRAVEL. SO IF THERE’S NOT A
PRODUCTION HERE, THEY’RE NOT WORKING.
THAT’S A COST. BUT WE NEED THEM QUALIFIED.
THEY’RE LIKE CONSTRUCTION WORKERS.
FILM INDUSTRY IS A LOT LIKE THE CONSTRUCTION INDUSTRY.
IF YOU’RE NOT WORKING CONSTRUCTION, WHAT DO YOU
DO? WE NEED CONSTRUCTION WORKERS HERE WHEN THERE’S
PROJECTS. THE OTHER THING THAT NONE
OF THESE THINGS EVER MEASURE, NONE OF THE
REPORTS EVER MEASURE IS THE BENEFIT THAT WE HAVE FOR
SHOWS LIKE HAWAII 5‑O TO OUR ONE OF OUR MAJOR
INDUSTRIES HERE, WHICH IS THE VISITOR INDUSTRY.
THAT PEOPLE ARE RELUCTANT FOR VARIOUS REASONS FOR IT’S
JUST TOO CHALLENGING TO ADD THAT INTO THE MIX AS TO WHAT
IS THE VALUE ‑‑>>SPENDING TAX DOLLARS
FORKER ADS, ADVERTISING HAWAI’I, THIS IS IN ESSENCE BIT
OF AN AD. HOP TO TECH FOR A MINUTE.
TALKED ABOUT WHAT OTHER COUNTRIES AND STATES ARE
DOING TO ATTRACT FILM PRODUCTION.
WHERE DO WE STAND IN TERMS OF COMPETITION WITH OTHER
STATES AN COUNTRIES IN TERMS OF TECH.
>>HAWAI’I HAS UNIQUE COMPETITIVE ADVANTAGES.
WE ARE IN HAWAI’I. WE LIKE TO CALL IT THE
DEVELOPED ENTREPRENEURIAL THAT YOU CAN SURF IN THE
MORNING AND CODE AT NIGHT. LIVE HEALTHY LIFESTYLE KNOW
ONE IS LIVING IN A CAVE ANY MORE EATING FUNYONS AND
MOUNTAIN DEW. WONDERFUL ADVANTAGES.
IN TERMS OF WHERE WE STAND T. THERE ARE STATES THAT WE
WOULD LIKE TO COMPARE OURSELVES TO.
KIND OF CALL THEM FLY OVER STATES.
SO NOT SAYING WE’RE A FLYOVER STATE, WE’RE A
DESTINATION. BUT WE ARE COASTAL STATE.
WITH WE ARE NOT CALIFORNIA. WE’RE NOT NEW YORK.
I’D SAY WITH SOME OF THOSE STATES, THEY’VE DONE OTHER
THINGS TO INCENTIVIZE, WHETHER THAT’S BROADBAND,
INVESTING IN BROADBAND, AND OTHER THINGS LIKE THAT.
BUT IN TERMS OF THE THE LAST 2 YEARS, WE’VE REALLY
INCREASED THE DEVELOPMENT OF THE A LOT OF THESE IDEAS.
WE HAVE GREAT IDEAS HERE AND WE’RE SO INSPIRED BY
BEING IN HAWAI’I AND HAVING SO MANY MENTORS HERE,
THERE ARE SO MANY PEOPLE THAT HAVE NEVER BEEN
TAPPED INTO AS RESOURCES WHO HAVE SECOND HOMES
HERE, WHO JUST LOVE HAWAI’I AND THEY WANT TO HELP US.
>>MALIA: WITH WE HAVE BRILLIANT TECH
ENTREPRENEURS WHO DECIDED TO MAKE THIS THEIR HOME.
>>ABSOLUTELY.>>MALIA: DO YOU BEGIN THAT IS
GOING TO BEGIN TO SORT OF PERCOLATE THROUGH THE
INDUSTRY, THOSE PEOPLE HAVE CHOSEN TO LIVE HERE.
>>I THINK SO. WE’RE TRYING TO CULTIVATE
THIS MENTOR NETWORK. THESE PEOPLE LIVE HERE AND
THEY WOULD LOVE TO HELP. NO ONE HAS ASKED THEM TO.
SO AS IF WE CAN START CREATING THAT COMMUNITY OF
MENTORSHIP AS WELL AS ENTREPRENEURIAL COMMUNITY
AND BE SEEN AS THIS PERFECT PLACE TO GROW A START‑UP
BECAUSE IT’S AMAZING WEATHER, AND AMAZING
RESOURCES, WE REALLY WILL HAVE A COMPETITIVE EDGE
OVER MANY, MANY OTHER PLACES.
REGARDLESS OF WHAT WE THINK ABOUT THE TAX CREDITS,
THERE’S AN AWFUL LOT OF ROOM FOR THE STATE TO ACT
AS A FACILITATOR. IN VARIOUS INDUSTRIES AND
FOR NEW START‑UPS. FILM OFFICES, I’M A BIG FAN OF
THE FILM OFFICES.>>I THINK THE FILM OFFICES
HELP TO HE REDUCE TRANSACTION COST FOR THE
INDUSTRY IN DOING FILMING IN HAWAII. THE TRANSACTION
COSTS CAN BE ENORMOUS. TO TRY TO GET ALL OF THESE
PERMITS, TO TRY TO FOLLOW ALL OF THE REGULATION IT’S, TO
EVEN FIGURE OUT KIND OF WHAT OTHER PRODUCTIONS
ARE HERE, WHETHER OR NOT THERE’S GOING TO BE SPACE AT
THE STUDIO. I THINK THE FILM OFFICES ARE
REALLY ESSENTIAL.>>TO ADD TO THAT, WHEN YOU
TALK ABOUT WHAT THIS INDUSTRY MEANS TO THE
STATE, WE HAVE TRIPLED THE STATE OF THIS INDUSTRY SINCE
THE CREDITS BEGAN. THAT IS THE TRUTH.
BUT WE HAVE NOT SUPPORTED THE FILM OFFICES TO THE
DEGREE THAT THEY NEED TO BE SUPPORTED TO MANAGE THIS
INDUSTRY. AS AN EXAMPLE, WE ARE
GENERATING ONTO MAGNITUDE OF $300 MILLION A YEAR IN
DIRECT EXPENDITURES IN THE STATE, AND OUR OPERATING
AND MARKETING BUDGET IS $50,000.
AND WE’VE GOT A SKELETAL CREW THAT IS IN CHARGE OF
ALL OF THE FILM PERMITTING AND TAX CREDIT MANAGEMENT.
>>IT REALLY IS. WE TRAVEL TO THE VARIOUS
FESTIVALS AN MARKETS, EVERYBODY WHO HAS PUERTO
RICO, BAHAMAS.>>MALIA: WHAT DOES PUERTO
RICO OFFER? DO YOU KNOW?>>EXCESS OF 40%.
BUT I REALLY GOT TO JUMP ON WHAT SUMNER SAID.
MAKE IT VERY, VERY CLEAR. YOU HAVE TO PAY ATTENTION
TO THE SMALL PRINT BECAUSE JUST COMPARING
PERCENTAGES TO PERCENTAGES, IT IS WHAT
PERCENTAGE, WHAT IS IT A PERCENTAGE OF.
ARE THERE LIMITATIONS? A LOT OF THE JURISDICTIONS HAVE
SPENDING LIMITATIONS, OVERALL SPENDING
LIMITATIONS SO THEY HAVE A POT OF MONEY TO WORK WITH.
ONCE IT’S GONE, IT’S GUN. WHICH CREATES KIND OF A
FEEDING FRENZY. SECONDARILY, SOME OF THEM
ONLY APPLY TO RESIDENT LABOR OR YOU HAVE A CERTAIN
CREDIT FOR RESIDENT LABOR AND LIMITATIONS ON, SAY,
ABOVE THE LINE LABOR OR BIG SALARY LABOR.
>>PUERTO RICO IN OUR WORLD WHEN WE’RE TALKING TO
FOLKS,, WE LOST $2 MILLION MOVIE THAT WAS SCOUTING
HERE. OPTED FOR PUERTO RICO,
TRIED TO WARN THEM AGAINST IT.
THAT PUERTO RICO CREDIT USUALLY RESULTS IN A BENEFIT
OF 25 TO 28%. SO IT’S NOT THE 40% THEY ALL
GET EXCITED ABOUT. PUERTO RICO IS 40%.
DO THE MATH. ON TOP OF T. THEY HAVE
INFRASTRUCTURE CHALLENGES AND CREW CHALLENGE.
MOST PEOPLE GO TO PUERTO RICO LIKE THIS IS THE
GREATEST THING. AFTER THEY FILM THERE, YEAH,
MAYBE WE’LL TRY SOMEWHERE ELSE.
>>YEAH. THIS IS A COMMENT FROM DAVE
IN WAIKIKI LOW A I BELIEVE THE INCENTIVE HAS TO BE GREATER
THAN 5% FOR THE NEIGHBOR ISLANDS.
ANY THOUGHTS IN TERMS OF GOING BACK TO THE LEGISLATE
AND TRYING TO GET A BIGGER DIFFERENTIAL?
>>WE’RE NOT GOING TO GET INTO THIS RACE TO THE BOTTOM
AS PEOPLE ARE FOND OF SAYING.
WE BELIEVE THAT THE CREDIT THAT WE HAVE IS A GOOD ONE.
WE FEEL IT IS AT ITS PRESENT RATE, IS FISCALLY
RESPONSIBLE. WE ALWAYS FOUGHT HARD FOR
THE NEIGHBOR ISLANDS TO GIVE THEM THAT EXTRA 5% BUMP.
YES, THEY COULD USE MORE. THEY DEFINITELY COULD USE
MORE. BECAUSE THE LION’S SHARE OF
PRODUCTION COMES TO OAHU BY VIRTUE OF THE FACT THAT
MOST OF THE INFRASTRUCTURE IS LOCATED HERE.
YET WE HAVE THIS AMAZING DIVERSITY ACROSS THE ISLAND
CHAIN. SO I WOULD LIKE TO SAY, YES,
WE WOULD LIKE TO GET MORE FOR THE NEIGHBOR ISLANDS.
BUT IN PRACTICAL TERMS, WE PROBABLY WILL NOT BE ABLE TO
GET MUCH MORE THAN WHAT WE HAVE NOW, WHICH WE’RE
GRATEFUL FOR.>>MALIA: MAUI HAS GOTTEN
QUITE A FEW PRODUCTIONS?>>IN RECENT YEARS.
YES.>>MALIA: THIS IS A COMMENT VIA
TWITTER. WHY NOT PUT MORE FOCUS ON
GROWING TECHNOLOGY FROM THE GROUND UP STARTING WITH
EMPOWERING OUR YOUTH, WHICH SORT OF A QUESTION OF
MINE. WHAT WOULD YOU LIKE TO SEE
IN TERMS OF WHAT KIND OF EDUCATION, SKILLS ARE BEING
GIVEN HERE LOCALLY SO IT CAN BE LOCAL PEOPLE, COMING INTO
THE OPPORTUNITIES THAT WE TALKED ABOUT EARLIER.
>>REALLY INTERESTING TOPIC. WE JUST HAD A LUNCHEON
TODAY AT HVCA ALL AROUND ATTRACTING TALENT IN HAWAI’I.
COUPLE OF OUR SPEAKERS, ONE IS INSTRUCTOR AT IOLANI
TEACHING APP DESIGN AND DEVELOPMENT.
ANOTHER RUSSEL CHANG WITH DAV LEAGUE, TEACHING
WHETHER THEY’RE ADULTS OR STUDENTS, EVENING COURSE
AS WELL AS 8:00 A.M. TO 9:00 P.M. KIND OF COURSE, YOU GIVE
UP EVERYTHING TO LEARN. TEACHING AND DEVELOPING
THAT TALENT HERE IN HAWAI’I. I THINK IT’S SO INTERESTING
WHEN WE START TO EDUCATE THESE KIDS WHEN THEY’RE
YOUNG. I ALWAYS SAY IT CHANGES YOUR
WORLD WHEN YOU TAKE THESE CLASSES AND LEARN ABOUT
ENTREPRENEURSHIP AND YOU BECOME A PROBLEM SOLVER.
YOU’RE SUDDENLY LOOKING AT THE WORLD AND YOU CAN SEE
SOMETHING THAT’S NOT RIGHT. AND YOU START LOOKING AT
HOW CAN I SOLVE THIS PROBLEM.
IT’S REALLY EMPOWERING. IF WE CAN CONTINUE TO GROW
THAT HERE IN HAWAI’I, EAR GOING DO SEE A LOT OF THESE
KIDS COMING BACK. I’M NOT TRYING TO SAY PEOPLE
SHOULDN’T LEAVE. I THINK IT’S GREAT TO LEAVE.
BUT THEY SHOULD COME BACK.>>MALIA: ANY THOUGHTS IN
TERMS OF REAL SKILLS THAT WE NEED TO MAKE SURE ARE
HAPPENING FOR THE NEW WORK FORCE COMING?
>>I THINK SO. HAWAI’I I THINK IS LAGGED
BEHIND A BIT IN EDUCATING ITS POPULATION AT THE HIGHER
EDUCATION LEVEL. THE PERCENTAGE OF STUDENTS
GOING TO COLLEGE STAYED RELATIVELY FLAT OVER THE
LAST COUPLE DECADES. IT’S CLEAR TO ME THAT PEOPLE
NEED MORE OF A COLLEGE EDUCATION.
THERE’S NO WAY TO BE INVOLVED IN HIGH TECH AREAS
IN THE FILM INDUSTRY OR IN ANY OTHER INDUSTRY IF YOU
DON’T HAVE ENOUGH OF AN EDUCATION.
I THINK UNIVERSITY OF HAWAI’I IS CURRENTLY MOVING TO TRY
TO MEET THAT CHALLENGE, TO TRY TO GET MORE OF HAWAI’I’S
HIGH SCHOOL STUDENTS INTO THE EDUCATIONAL SYSTEM
HERE. IT’S REALLY IMPORTANT.
IT’S REALLY IMPORTANT TO BE EXPANDING HIGHER EDUCATION.
U.H. WEST OAHU MAY HELP CONTRIBUTE TO THAT.
BUT I THINK IN GENERAL, JUST INFRASTRUCTURE INVESTMENT
IS REALLY IMPORTANT FOR A LOT OF THESE INDUSTRIES.
IF YOU HAVE A STATE THAT DOESN’T HAVE PROPER RATES,
HAVE YOU A STATE THAT DOESN’T HAVE A GOOD
INTERNET, FAST INTERNET, THIS IS A BIG PROBLEM HERE.
>>I THINK WE’VE LAGGED BEHIND IN THAT.
SOMETHING THAT’S STATE IS FINALLY STARTING TO ADDRESS,
BUT IT’S HARD FOR FIRMS TO COME HERE AND SAY, GEE,
LOOK AT THIS BACKWARD BROADBAND BASICALLY HERE
AND THEN SAY, THIS IS GOING TO BE A GREAT PLACE TO
LOCATE FOR HIGH TECH. THERE ARE BASIC ISSUE CUT
ACROSS ALL INDUSTRIES. IT’S HARD TO ENGAGE IN A FILM
PRODUCTION IF IT’S DIFFICULT TO GET FROM MOKULEIA INTO
THE CENTER OF TOWN.>>I WANT TO COMMENT.
I THINK OBVIOUSLY HIGHER EDUCATION, FULL BELIEVER IN
THAT, BUT I DO THINK THAT THERE IS SPACE FOR MORE
SPECIFIC VOCATIONAL.>>?
>>MALIA: WHAT WOULD THOSE SPECIFICS BE.
>>AROUND HIGH TECH DEVELOPMENT.
SO WHETHER IT’S TECHNOLOGY, ENGINEER, YOU TAKE A LOOK AT
NO LONGER ARE YOU GOING TO SCHOOL, GET YOUR 4 YEAR
DEGREE, LIBERAL ARTS AND COME OUT AND YOU’RE
MANAGER OF THE GAP. NOT TRYING TO SAY THERE’S
ANYTHING WRONG WITH THAT. I’M SAYING IT’S INTERESTING
NOW WHERE THERE’S A LOT OF THESE PROGRAMS IN SILL CAN
VALLEY ALL OVER THE COUNTRY AS WELL AS IN HAWAI’I, WITH
DEV LEAGUE AND OTHERS LIKE THAT, THAT ARE THESE KIDS
ARE GOING AND SPECIFICALLY TO LEARN HOW TO BE A
DEVELOPER. HOW TO BASICALLY TO EXPORT
APP SOFT WAR, ET CETERA. SO BEING RELEVANT IN WORK
FORCE.>>MALIA: BECAUSE THOSE
OPPORTUNITIES ARE COMING. FOR THOSE OF YOU IT JOINING
US ON INSIGHTS, WE’RE ASKING GUESTS DO HIGH TECH FILM
AND TAX CREDITS BENEFIT HAWAI’I.
CALLING E‑MAIL OUR TWEET YOUR QUESTIONS ON
COMMENTS. I WAS INTERESTED AND RICK
LISTENING TO THAT. I KNOW THAT YOU MUST HEAR
WORE WONDERFUL THINGS FROM FILM CREWS ABOUT THE
PEOPLE, FOOD, I HOPE, WEATHER.
WHAT ARE THE THINGS THAT FILM CREWS, GOSH, IT WOULD
BE GREAT IF HAWAI’I COULD POLISH ‑‑ WHAT SORT OF
FEEDBACK IN TERMS ROAD OR INTERNET.
ARE THERE THINGS WE COULD DO OUTSIDE OF CREDITS?
>>WELL, WE NEED MORE INFRASTRUCTURE.
WE NEED MORE STUDIO SPACE. I THINK WE’RE ALL KEENLY
AWARE OF THAT. THE STATE IS ENGAGED IN
PROCESS RIGHT NOW TO DO A FEASIBILITY STUDY IN BUSINESS
ANALYSIS TO FIGURE OUT WHERE THE NEXT STUDIO MIGHT
BE BEST SUITED. SOMEWHERE WITHIN THE STATE,
NOT JUST ON OAHU NECESSARILY.
BUT WE’RE GOING DO LOOK AT THE ENTIRE STATE AND SEE
WHAT MAKES THE MOST SENSE. SO WE DO NEED
INFRASTRUCTURE SPACE. THAT’S SOMETHING THEY’RE
TALKING ABOUT. TRAFFIC IS AN ISSUE.
YOU’RE CORRECT ON THAT. AND THE PLACE FOR US TO
HAVE A NEW STUDIO FACILITY MAY NOT NECESSARILY BE
WITHIN THE URBAN CORE OF HONOLULU.
WILL PROBABLY MOST LIKELY NOT WITHIN THE URBAN CORE
OF HONOLULU. BUT THEN TRAFFIC IS GOING TO
COME INTO PLAY.>>MALIA: GETTING AFTER THAT.
>>TIME IS MONEY. AND WHEN WE WENT THROUGH
THE MASTER PLANNING PROCESS 20 YEARS AGO, FOR
THE STUDIO FACILITY AT DIAMOND HEAD, IT WAS ITS
PROXIMITY TO WAIKIKI AND THE VARIETY OF ACCOMMODATION
THAT CAN BE PROVIDED TO PRODUCTIONS AT ALL
DIFFERENT PRICE POINTS THAT MADE THE MOST SENSE.
BUT AGAIN, YOU HAVE TO LOOK AT THE WHOLE PACKAGE OF
WHERE IT’S GOING TO BE SITUATED AND WHAT THOSE
SURROUNDING AREAS ARE GOING TO LOOK LIKE.
>>MALIA: RICK ANY THOUGHTS ON THAT?
>>WE ATTRACTED SOME GREAT PRODUCTIONS AND LARGE
PRODUCTIONS TO HAWAI’I, BUT WITHOUT THE STATE SPACE,
THEY NEED TO GO ELSEWHERE FOR THE STAGES.
SO LOUISIANA IS A BIG DESTINATION FOR FILMING ON
STAGES. SO WE CAN SAY, WELL, WE’VE
GOT PART OF IT, THEY’VE GOT PART OF IT, BUT PROBLEM IS IT’S
STILL MAKES US MORE EXPENSIVE.
IF YOU’RE BUDGETING A SHOW AND SAY, I’M GOING TO GO TO
HAWAI’I, BUT THEN I HAVE TO PACK EVERYBODY UP AND SHIP
THEM TO ANOTHER LOCATION, TO FILM MY STAGE WORK,
THAT’S TRANSACTION COST. IF THEY SAY, WE’RE GOING TO
COME TO HAWAI’I, FILM ON THE STAGE, FILM OUTSIDE, NOW
THEY HAVE TO SHOOT EVERYTHING OUTSIDE AND
MAKE SURE THEY GOT IT ALL AND RUN BACK TO THE STAGES
SOMEWHERE ELSE. WITHOUT HAVING THE STAGES,
WE’RE NOT KEEPING THAT WORK AND FOR THE PRODUCTIONS,
ALSO MAKING MORE EXPENSIVE FOR THEM EVEN THEY CHOOSE
TO COME HERE AND FILM PART OF IT.
>>MALIA: WHAT DOES UP TO DATE STUDIO COST? WHAT
COST IS IT TO BUILD A SECOND STUDIO?
WE’VE HAD A PROJECT TRYING TO BUILD IN KAPOLEI FOR MANY
YEARS. $50 MILLION.
>>MALIA: BIG INVESTMENT FOR THE STATE.
ONE TO THINK ABOUT. $50 MILLION.
>>IT WOULD BE GREAT TOO, IF THE STATE HAS HAD REAL
PROBLEMS IN KEEPING UP ITS FACILITIES.
IN SOME WAYS, THE STATE HAS KIND OF OWNED SOUND
STAGES. IT NEEDS TO MAKE A
COMMITMENT.>>WE’RE NOT GOING TO BE THE
ONES THIS, IS GOING TO BE A PRIVATE SECTOR
DEVELOPMENT. THIS IS NOT GOING TO BE A
STATE OWNED AND OPERATED STUDIO LIKE DIAMOND HEAD.
>>THIS IS THE TYPE OF THING WHERE THE STATE HAS A ROLE
IN FACILITATING. ESSENTIAL FACILITY.
FOR THE INDUSTRY. YOU CERTAINLY DON’T WANT TO
END UP WITH SAY, ONE FIRM OWNING IT AND EXTRACTING
RENT MONOPOLY RENTS FROM THE OTHER INDUSTRY AND
RESTRAINING THE GROWTH OF THE INDUSTRY.
EVEN IF THE STATE HAS SOME ROLE IN IT, IT’S IMPORTANT THAT
THERE BE SOME TIME TYPE OF STATE PRIVATE FARTHER
PARTNERSHIP INVOLVED IN THIS.>>COMMITMENT TO RETAIN THE
ININCENTIVES. LAST THING WE WANT TO DO IS
RAISE $50 MILLION WITH TRANSIENT TENANTS WHO CAN’T
TELL WHEN THEY’RE GOING TO COME, HOPE THEY COME AND
HAVE THE STATE SAY, WELL, WE DECIDED THAT WE’RE NOT
GOING TO DO THE THE INCENTIVE ANY MORE.
>>STABILITY AND PREDICTABILITY ARE THE MOST
IMPORTANT THINGS WITH REGARD TO OUR INDUSTRY AND
THIS CREDIT. THERE HAVE BEEN OTHER
JURISDICTIONS THAT HAVE PULLED THE RUG OUT FROM
UNDER REDUCTIONS THAT HAVE ACTUALLY BEEN OUT ENGAGED
IN PRODUCTION. IT IS A BIG BLACK EYE THAT YOU
WILL TAKE A LONG TIME TO RECOVER FROM.
>>NOT SOMEONE GOING TO COME BACK.
>>NO.>>I WOULD STRONG WILL HE
ECHO THAT TOO. STABILITY AND PREDICTABILITY
IS REALLY IMPORTANT. ONE OF THE BEST THINGS THAT
THE LEGISLATURE DID WAS TO EXTEND THE FILM AND TV TAX
CREDIT THROUGH TO 2018.>>THAT’S IMPORTANT.
THAT ENABLES PRODUCERS TO PLAN.
THEY CAN LOOK AHEAD AND START PLANNING PRODUCTIONS
IN 2016, 2017, 2018. THAT TYPE OF LONG RANGE
PLANNING IS TYPICAL INDUSTRY. SECOND STUDIO WOULD NOT BE
STATE FUNDED.>>PROBABLY BE A PUBLIC
PRIVATE PARTNERSHIP. MAYBE THE STATE WILL BE
INVOLVED WITH PROVIDING LAND.
I’M NOT REALLY SURE WHAT THAT LOOKS LIKE AT THIS POINT.
BUT WE HAVE NEARLY $20 MILLION INVESTED AT THE
DIAMOND HEAD FACILITY AND IT IS THE ONLY STATE OWNED AND
OPERATED FACILITY OF ITS KIND IN THE COUNTRY.
WE NEED TO FOCUS ON TAKING CARE OF THAT AND HELPING TO
PAY THE WAY FOR THE PRIVATE SECTOR TO GET ANOTHER
LARGER FACILITY GOING.>>MALIA: MELI, RICHARD VIA
TWITTER SAYS, ARE WE DOING ENOUGH TO PROMOTE THE
INDUSTRIES IN HAWAI’I PUBLIC SCHOOLS WHEN YOU COMPARE
WHAT YOU’VE SEEN HERE WITH YOUR EXPERIENCE LIVING IN
CALIFORNIA, I WOULD IMAGINE WE MIGHT BE QUITE FAR BEHIND
JUST BECAUSE SILICON VALLEY AND CALIFORNIA HAS GOT SUCH
A LEG UP IN TERMS OF THAT SORT OF EDUCATION AND
WIDESPREAD KNOWLEDGE. HOW FAR BEHIND WOULD YOU
SAY WE ARE IN TERM HE IS OF THE EDUCATION WE’RE GIVING
IN THE YOUR INDUSTRY?>>YOU KNOW, I CAN’T REALLY
SPEAK TO THE EDUCATION IN THE ELEMENTARY SCHOOLS
AND HIGH SCHOOLS AS MUCH. I WILL SAY I HAVE SEEN MORE IN
THE PRIVATE SCHOOL SECTOR, IOLANI JUST BUILT THE SULLIVAN
CENTER WHICH IS AN AMAZING FACILITY WHERE BLUE START‑
UPS AND ENERGY ACCELERATORS ARE DOING OUR
DEMO DAY JUNE 13. THESE ARE THE GRADUATES OF
OUR ACCELERATOR. THEY’LL BE PITCHING TO
INVESTORS FOR FOLLOW‑ON FUNDING.
I THINK THERE ARE OTHER INITIATIVES OUT THERE LIKE
LEMONADE ALLEY WHERE A LOT OF THESE KIDS ARE GETTING
THAT EXPOSURE TO BUILDING BUSINESSES WHETHER THEY’RE
BUILDING LEMONADE STAND AND MARKETING IT.
>>MALIA: TELL ME ABOUT THAT. I DON’T KNOW ABOUT LEMONADE
ALLEY.>>LEMONADE ALLEY IS
COMPETITION WHERE THE KIDS BASICALLY CREATE A RECIPE
AROUND LEMONADE AND THEY HAVE TO MARKET IT.
THERE’S A BIG EVENT WHERE EVERYONE TRIES TO LEMONADE
AND THEY’RE MARKETING IT. THERE’S AN ACTUAL WINNER.
SO IT IS KIND OF AN EXERCISE IN ENTREPRENEURSHIP.
THESE ARE REALLY GREAT EXAMPLES OF THESE KIDS
GETTING EXPOSURE TO STARTING TO LEARN ABOUT
PROBLEM SOLVING AND MARKETING AND BUSINESS.
WHICH IS INTERESTING.>>MALIA: THIS IS IN HAWAI’I AS
WELL?>>THIS IS IN HAWAI’I.
YES.>>MALIA: OKAY.
TERRIFIC. THERE’S A QUESTION FROM
MATT ON MOLOKAI. WHY AREN’T FILM PRODUCTION
TAX CREDITS DESIGNED TO BENEFIT ENCOURAGE SMALLER
LOCAL PRODUCTIONS AND PROCUESERS? WHY DO THEY
OPEN BENEFIT OUT OF STATE LARGE SCALE PRODUCTIONS?
SMALL LOCAL PRODUCTIONS SEEM TO BE AN AREA WHERE
CAN HE CAN BEST DEVELOP OUR LOCAL INDUSTRY AND TALENT.
>>I KNOW WHERE THAT CAME FROM.
MATT YAMASHIDA FROM MOLOKAI.
WE ARE BIG SUPPORTERS OF HIS AND HE IS A TREMENDOUSLY
TALENTED. WHEN WE DESIGNED THIS
CREDIT, WE DID BRING THE SPENDING THRESHOLD DOWN
SIGNIFICANTLY. THE ORIGINAL CREDIT THAT
HAWAI’I HAD THAT WAS PASSED IN THE LATE 90’S WAS QUITE
HEFTY. YOU HAD TO SPEND ON THE
MAGNITUDE OF A MILLION I THINK TO QUALIFY FOR THE
CREDIT. WE BROUGHT IT DOWN TO
$200,000. THAT WAS IN AN EFFORT TO TRY
TO ATTRACT MORE OF THE COMMERCIAL BUSINESS.
NATIONAL COMMERCIALS AND ALSO TO TRY TO HELP OUR
LOCAL INDEPENDENT FILMMAKERS.
WITH THAT KIND OF A SPENDING THRESHOLD.
IT STILL A TAD HIGH FOR THEM. WHAT THEY REALLY NEED IS
THEY NEED FUNDING FOR THEIR PROJECTS.
WE CARE A LOT ABOUT WHAT HAPPENS TO OUR LOCAL
FILMMAKERS BECAUSE THEY’RE KIND OF OUT THERE DOING IT
FOR THE REST OF US IN TERMS OF TELLING THOSE STORIES
AND IT’S DIFFICULT TO MAKE A FILM.
>>ONE OF THE THINGS THAT ACT 221 DID SINCE IT WAS AN
INVESTMENT TAX CREDIT DID ALLOW SMALLER PRODUCTIONS
TO RAISE MONEY TO MAKE A FILM. WE HAD A SMALL FILM
THAT WAS $800,000 FILM THAT WOULD NOT HAVE BAN MADE.
THE THRESHOLD GOT LOWERED WHICH IS ON THE CURRENT
CREDIT WHICH IS GREAT, BUT STILL, IF YOU’RE ONLY GETTING
20 TO 25% OF YOUR BUDGET, AS A SMALL FILMMAKER, YOU STILL
HAVE A LONG WAY TO GO TO RAISE EQUITY.
AND WHAT MOST PEOPLE DON’T REALIZE, I DIDN’T REALIZE UNTIL
I READ IT, A COUPLE YEARS AGO, WAS THAT THERE WERE OVER
4,000 INDEPENDENT FILMS MADE IN THE U.S.
AND HOW MANY OF THOSE HAVE YOU HEARD OF LET ALONE
WATCHED? THAT’S ALL MONEY THAT PEOPLE SPENT TO MAKE
MOVIES. SO THERE’S A LOT OF MONEY
THAT NEEDS TO BE RAISED TO MAKE THESE FILMS.
IT’S NOT JUST THE FILMS YOU SEE IN THE THEATRES OR ON I‑
TUNES. THERE’S A LOT OTHER STUFF.
THAT IS OUR TRAINING GROUND. WE DO NEED TO TRY AND
FIGURE OUT HOW TO EITHER COME UP WITH A DIFFERENT
INCENTIVE OR COME UP WITH A FUNDING MECHANISM TO HAVE
LOWER BUDGET PRODUCTIONS BE ABLE TO TELL THEIR STORIES
BECAUSE THAT IS WHERE WE’RE GOING TO TRAIN A LOT OF
PEOPLE.>>MALIA: I WANT TO SEE A FILM
FUND ESTABLISHED FOR OUR INDIGENOUS FILM COMMUNITY.
THAT’S WHAT I WANT TO SEE. IT IS CRITICALLY IMPORTANT
BECAUSE THE AS RICK SAYS, THE CREDIT IS NOT GOING TO BE
ENOUGH FOR THEM.>>MALIA: BECAUSE OF COURSE
THAT’S THE PULL BETWEEN SORT OF ARTISTIC AND
CULTURAL NEEDS AND ECONOMIC SENSE.
THE STATE IS TRYING TO ACCOMPLISH SOMETHING
ECONOMICALLY. IT FEELS LIKE FILM INDUSTRY IS
A ONE OFF COMPANY WHERE TECH COMPANIES CAN BE MORE
LONG TERM. SHOULD WE FOCUS ON MORE
ON TECH THAN FILM?>>I THINK JUST IN TERMS OF
WHEN YOU’RE DOING THESE TAX CREDITS, INCENTIVES,
ULTIMATELY, WHAT THEY’RE TRYING TO DO IS CONTRIBUTE
TO THE TAX BASE. SO YOU LOOK AT, I’M NOT GOING
TO SAY FILM, I’LL SAY TOURISM, TOURISM IS NOT A GROWTH
INDUSTRY. I THINK IN TERMS OF
INVESTMENT, YOU NEED TO BE INVESTING IN BUSINESSES WHO
CAN EXPORT KNOWLEDGE. THOSE ARE TECH BUSINESSES.
SO WHETHER IT’S EXPORTING APPS, SOFTWARE, ET CETERA,
WE’RE EXPORTING TO THESE MARKETS OUTSIDE OF HAWAI’I.
SO BRINGING MONEY INTO THE STATE.
THAT’S REALLY LIKE THE ONLY WAY TO CONTRIBUTE TO OUR
TAX BASE. WE CAN’T KEEP BUILDING MORE
HOTELS. I THINK WITH IT’S INTERESTING
WITH THE FILM INDUSTRY WHERE YOU’RE ABLE TO KIND OF
TOUT ALL OF THESE EXPENDITURES WHICH WE CAN’T
DO BECAUSE IT’S INVESTING IN THIS GROWTH INDUSTRY.
WE PUT THE MONEY IN. 8 TO 10 YEARS LATER, WE’RE
HOPING THAT WE’RE GOING TO BE BUILDING ALL OF THESE
JOBS. THAT ALL OF THIS MONEY IS
GOING TO BE POURING IN. IF WE HAD FACEBOOK AND
TWITTER HEADQUARTERS HERE IN HAWAI’I, IT WOULD BE A MUCH
DIFFERENT STORY, RIGHT? SO PART OF THIS IS ALSO LIKE
HAVING A BIG WIN. WE REALLY DO NEED A BIG WIN
THAT’S REALLY GOING TO SHOWCASE WHAT WE’RE
TALKING ABOUT HERE. WHEN WE’RE TALKING ABOUT
GROWTH INDUSTRY.>>MALIA: IS THERE ANYTHING
THAT YOU’RE EXCITED ABOUT THAT’S SOON ON THE HORIZON
ARE STILL A FEW YEARS OUTEN ON THAT?
>>THAT WOULD BE A TOUGH THING FOR ME TO ANSWER.
>>MALIA: WE’LL HOPE.>>BUT YES.
I THINK WE’RE VERY CLOSE.>>MALIA: SUMNER, YOUR
THOUGHTS ON THAT.>>THERE’S ALWAYS THIS
TENSION BETWEEN IMPROVING THE GENERAL BUSINESS
CLIMATE AND THE GENERAL BUSINESS CLIMATE GOES BACK
TO THE STATE OF HUMAN CAPITAL, PEOPLE’S EDUCATION,
EXPERIENCE, VARIOUS INDUSTRIES.
IT ALSO GOES BACK TO THINGS LIKE INFRASTRUCTURE, GOES
BACK TO OVERALL LEVEL OF TAXATION IN THE STATE.
MIGHT EVEN GO BACK TO THE COST OF HOUSING.
THAT’S BECOME A BIG DETER ENTERTO RECRUITMENT IN
HAWAI’I AND FILMINGS LOCATING HERE.
SO ALL OF THESE THINGS. IF WE REALLY MAKE THE STATE
A BETTER PLACE TO DO BUSINESS, WE’RE VERY LIKELY
TO ATTRACT A LOT MORE HIGH TECH FIRMS.
IT’S WORTH NOTING TOO THAT WE HAVE BEEN DIVERSIFYING.
IF YOU GO BACK AND YOU LOOK AT TOURISM END EXPEND YOU
AVES IN 1990, THEY HAVE BEEN WITH EXCEPTIONS OF BOOMS
AND BUSTS IN TOURISM, THEY HAVE BEEN DECLINING EVER
SINCE. IF YOU DEFLATE THE TOURISM
EXPENDITURES.>>THE STATE HAS BEEN
DIVERSIFYING. IF IT YOU LOOK AT IT, BEEN
DIVERSIFYING MORE INTO THE MILITARY.
MILITARY HAS BEEN GROWING. TOURISM HAS BEEN FALLING.
HIGH TECH FIRMS HAVE COME ABOUT ARE MILITARY SUPPORT
FIRMS. THERE TO SUPPORT VARIOUS
ACTIVITIES IN THE MILITARY. OTHERS THOUGH CLEARLY GO
BACK TO SOME OF HAWAI’I’S NATURAL ATTRIBUTES.
A LOT OF FIRMS OUT THERE SUPPORTING THE TELESCOPES
ON THE BIG ISLAND. THAT’S IS A TYPE OF CLEAN
TECH THAT’S BEEN REALLY IMPORTANT AND DOING SOME
TYPE OF INTELLIGENT DEVELOPMENT THAT PROTECTS
THE ENVIRONMENT, THAT ALSO PROTECTS THE CULTURAL
ETHOS OF NATIVE HAWAIIANS. ON THE BIG ISLAND, YET
ALLOWS SOME OF THESE COMPLEMENT AIR I FIRMS TO
GROW IS REALLY IMPORTANT. LESS PROVIDING BIG TAX
CREDITS. TIMES WHERE RELATIVELY
MODEST SMALL TAX CREDITS CAN REALLY BE USEFUL.
BUT EVEN MORE TO THE POINT THOUGH, IS STATE REALLY
ASKING SOME OF THESE INDUSTRIES WHAT DO YOU
NEED? IS IT ROAD SYSTEM GOOD ENOUGH? DO WE NEED
SOME SPECIAL EDUCATION PROGRAMS? WHETHER AT THE
COMMUNITY COLLEGE LEVEL, HIGH SCHOOLS OR AT LOWER
LEVELS. THE PROPOSALS IN THE STATE
TOO FOR EARLY EDUCATION ARE REALLY IMPORTANT.
IF YOU DON’T HAVE AN EDUCATED WORK FORCE, I
REALLY THINK A LOT OF THESE PROPOSALS ARE JUST GO TO BE
BRINGING OUT OF STATE WORKERS INTO HAWAI’I.
ABSOLUTELY CRITICAL TO BE TRAINING PEOPLE FOR THESE
FUTURE INDUSTRIES.>>TO THE QUESTION, ONE OF
THE PERSPECTIVES IS THE ONE OFF.
WE TEND IF YOU’RE NOT IN THE FILM INDUSTRY, TO VIEW THE
FILM INDUSTRY, THERE’S THE BIG NEW MOVIE FROM SONY,
GREEN WORKS AND COME HERE AND IT’S ONE OFF.
WHAT WE DO IN HAWAI’I, IS MANUFACTURE.
SO I DON’T THINK ANYBODY WOULD SAY, GOSH, THE
CONSTRUCTION INDUSTRY IS REALLY WEIRD.
IT’S JUST KIND OF A BUNCH OF ONE OFF.
ONE OFF BUILDINGS. THAT’S REALLY NOT AN
INDUSTRY. WE ALL SUPPORT
CONSTRUCTION INDUSTRY AND RECOGNIZE ITS NEEDS AND IT IS
AN INDUSTRY UNTO ITSELF BECAUSE IT’S BUILDING THINGS.
THAT’S WHAT THE FILM INDUSTRY IS.
IT’S A CONSTRUCTION INDUSTRY AND THEY’RE ALL TRAINED AND
UNION PROFESSIONALS HERE BUILDING THINGS THAT WE THEN
EXPORT. SO IT’S NOT A ONE OFF
INDUSTRY BECAUSE ANY MORE THAN CONSTRUCTION IS A ONE
OFF INDUSTRY.>>ALSO YOU HAVE A
COMPETITIVE ADVANTAGE. NATURAL, HAWAI’I IS HAWAI’I.
WHICH IS WHY SO MANY FILMS ARE HERE.
IT’S NOT JUST CONSTRUCTION.>>WHETHER IT’SES AFTER
WORK AND EVERYBODY USES OR MOVIE THAT WE’RE
EXPORTING AND EVERYBODY CEASE.
WE’RE BUILDING IT HERE. AND WE’RE BUILDING IT WITH
PROFESSIONALS. IT’S ALSO SUCCESSFUL
EXPERIENCE LEADS TO THE NEXT AND NEXT.
IT’S ALL ABOUT BEING ABLE TO SERVICE THIS INDUSTRY, IN A
EFFICIENT MANNER, SO THAT THE WORD WILL GET ACROSS TO
THE NEXT PRODUCER AND THE NEXT AND THE NEXT.
AND THOSE PROJECTS WILL KEEP COMING.
OUR LOCAL FILMMAKERS ARE ALL ENGAGED IN THIS INDUSTRY
AND IT IS THE PERFECT MARRIAGE BETWEEN THOSE
WHO ARE TRYING TO PUT FOOD ON THEIR TABLE AND FUND
THEIR NEXT PROJECT. WORKING FOR A BIG
PRODUCTION AND GETTING INVALUABLE EXPERIENCE DOING
SO.>>I AGREE WITH DONNE IS
SAYING ESPECIALLY IN THE FILM INDUSTRY AS WELL AS THE
TECH. YOU GET TO THIS QUALITY, THIS
LEVEL OF QUALITY AND IT JUST KEEPS BUILDING.
SO WHAT THE INCREASE IN GREAT TALENT, GREAT IDEAS,
VENTURE CAPITAL COMING IN, AND IT JUST KEEPS GROWING.
I TOTALLY AGREE WITH YOU.>>I WAS IN NEW YORK JUST A
FEW WEEKS AGO, AND MASSIVE BILLBOARD FOR GODZILLA.
HUGE. AND THAT JUST OPENED A FEW
DAYS AGO. AND IT IS REALLY GREAT FILM.
AND HAWAI’I HAS A HUGE ROLE IN THAT FILM.
AND WHAT THAT IS, THAT THEN BECOMES OUR CALLING CARD.
JUST AS LOST BECAME OUR CALLING CARD AND HAWAII 5‑O
AND IT TELLS THE WORLD AND IT TELLS THE REST OF THE
INDUSTRY THAT WE ARE CAPABLE OF.
AND THAT BEE GETS THE NEXT PRODUCTION.
>>EVERYBODY WHO WORKS HERE IN HAWAI’I I TELL THE JOKE
THAT WHEN WE HAVE CREW PEOPLE, PRODUCERS FROM THE
MAINLAND, YOU CAN ALWAYS TELL WHO THEY ARE BECAUSE
AS SOON AS WE’RE READY TO WRAP PRODUCTION, YOU SEE
THEM COMING ACROSS THE SET AND THEY COME UP AND THEY
HAVE THIS LOOK ON THEIR FACE AND NOW I CAN RECOGNIZE IT
AND THEY’RE LIKE, DO YOU HAVE ANOTHER PROJECT BECAUSE I
REALLY WANT TO STAY HERE AND WORK.
I’M SUPPOSED TO GO TO YOU KNOW, MICHIGAN OR EASTERN
EUROPE OR CANADA IN THE WINTER.
WHATEVER. AND THEY’RE, YOU KNOW, THEY
REALLY WANT TO STAY HERE. BECAUSE IT IS SUCH A GREAT
PLACE.>>WE’RE COMING TO OUR FINAL
MINUTE. SO I DO WANT TO GET TO AS
MANY AS THESE QUESTIONS AS I CAN.
FROM KC IN KAAAWA. SHOULD HOLLYWOOD FILMS BE
REQUIRED TO DONATE TO OUR PUBLIC SCHOOLS? REGULARLY
IN KAHUKU COUNTRY, BUT THEY STRUGGLE WITH LIMITED
DIGITAL MEDIA EQUIPMENT AND DEDICATED VOLUNTEER AND
PART‑TIME FILM TEACHERS. JURASSIC, PARK, CHINA MAN’S
HAT, ALL BIG PARTS OF THAT.>>TAX CREDIT REQUIREMENT
TO CONTRIBUTE TO EDUCATIONAL PROGRAMS IN
THE FILM AND VIDEO REALM APPLY TO PUBLIC AND CHARTER
SCHOOLS. AND IT IS EXTREMELY
IMPORTANT. SO SCHOOLS LIKE KAHUKU ARE
BENEFITING FROM THE CREDIT. IT IS OUR WAY OF SHOWING
THAT THESE PRODUCTIONS WANT TO GIVE BACK TO THE
COMMUNITY AND THINK WANT TO HELP BUILD THIS WORK
FORCE. SO WE ARE SEEING REALLY
REMARKABLE ADVANCEMENT IN OUR HIGH SCHOOLS ALONE IN
WHAT THEY’VE BEEN ABLE TO DO WITH FILM AND VIDEO.
I CONSIDER US TO BE PARTNERS WITH THE HIGH TECH INDUSTRY
BECAUSE THAT’S REALLY WHERE THIS IS ALL GOING.
AND WE JUST TOOK A VISIT OUT TO WAIANAE HIGH SCHOOL, ONE
OF THE MOST ECONOMICALLY STRESSED COMMUNITIES AND
TO SEE WHAT SEARIDER PRODUCTIONS IS DOING AT
WAIANAE HIGH SCHOOL IS NOTHING SHORT OF
PHENOMENAL. SO YEAH.
>>WE’RE IN OUR FINAL MINUTES. I’M GOING TO GIVE YOU TWO
TECH QUESTIONS AT ONCE. ANYONE JUMP IN WHO WANTS
TO. WHAT ARE SOME OF THE
UNIQUE TECH COMPANIES THAT HAVE COME OUT OF HAWAI’I
FROM DAN IN HONOLULU. CAN HAWAI’I TECH COMPANIES
MATCH THE SALASLYS OF THEIR COUNTERPARTS ON THE
MAINLAND. FROM MIKE IN KAIMUKI.
ANY THOUGHTS?>>IN TERMS OF ANY UNIQUE
TECHNOLOGIES COMING OUT, I’LL JUST KIND OF GO TO SOME
OF OUR BLUE START‑UP COMPANIES.
FIRST COHORT, WE HAD A COMPANY CALLED VOLTA WHICH
ELECTRONIC VEHICLE CHARGING STATIONS.
IF YOU’RE EVER THE WHOLE FOODS, FIRST SPOTS THERE,
IT’S AN ADVERTISING BASE MODEL SO ESSENTIALLY U. YOU
GET A FREE TOP‑OFF ON YOUR ELECTRONIC VEHICLE AND IT’S
ADVERTISING THAT THEY’RE ABLE TO PAY FOR THAT.
THEY’RE DOING REALLY WELL. ACTUALLY IN SAN FRANCISCO
NOW. THEY HAVE AN OFFICE STILL
HERE IN HAWAI’I. BUT ALSO IN SAN FRANCISCO.
HAVE RAISED I THINK OVER $2 MILLION IN FOLLOW‑ON
FUNDING. SO THAT’S KIND OF ONE OF THE
THINGS THAT WE LOOK AT SUCCESS HERE WITH THE
ACCELERATORS IS ABILITY TO RAISE FOLLOW‑ON FUNDING.
ANOTHER INTERESTING COMPANY WAS FLOW WATER.
WHICH IS KIND OF LIKE COMMERCIALIZED BRITA
STATIONS. IF YOU THINK OF IT, WE LEAVE
THE HOUSE NOW, LOOK AT TAKING OUR CANVAS BAG TO GO
TO THE GROCERY STORE. PEOPLE CAN NOW TAKE THEIR
BOTTLE.>>MALIA: THERE WILL BE REFILL
STATIONINGS.>>REFILL STATIONS.
>>MALIA: I LOVE THAT.>>AS FAR AS MATCHING
SALARIES, IF WE DON’T MATCH SALARY IT’S, WE LOSE GOOD
PEOPLE. BUT THAT SAID, THERE IS
ALWAYS SOME TYPE OF DISCOUNT FOR LIVING IN A
GOOD PLACE. EITHER YOU PAY HIGHER
HOUSING PRICES OR YOU HAVE SLIGHTLY LOWER SALARIES.
AND IN HAWAII, WE END UP WITH BOTH.
BUT THAT’S TO BE EXPECTED. IF WE ACTUALLY HAD
COMPETITIVE HOUSING PRICES AND WE HAD THE SAME
SALARIES AS THE MAINLAND, WE WOULD HAVE 8 MILLION PEOPLE
WANTING TO LIVE HERE. THERE’S ALWAYS GOING TO BE
SOME TYPE OF SALARY DISCOUNT TO LIVE IN HAWAI’I.
>>MALIA: SUMNER YOU STARTED BYCY SAYING 221 WAS A BIT OF
A DISASTER. BACK TO THE ORIGINAL
QUESTION. ARE THESE TAX CREDITS GOOD
FOR HAWAI’I AND ECONOMY. DO YOU FEEL THAT’S CURRENT
PROGRAMS THAT WE SPENT THIS HOUR DISCUSSING ARE
GOOD FOR HAWAI’I? DO YOU FEEL LIKE WE FOUND A GOOD
SPOT IN THESE INDUSTRIES IN THE TAX CREDITS THAT THE
STATE PROVIDES?>>I THINK THAT AS LONG AS THE
TAX CREDITS ARE MODEST, THEY’RE DONE PREDICTABLY,
WE DON’T TINKER WITH THEM ALL THE TIME AND WE’RE
CONSTANTLY ASKING OURSELVES WHAT IS THE
EFFECTIVE THESE TAX CREDITS. ARE THEY REALLY BENEFITING
THE COMMUNITY. WE SHOULD ALWAYS BE
LOOKING AT THEM AS AN EXPERIMENT WHICH WE TRY TO
EVALUATE THEM OVER TIME. THAT DOESN’T MEAN THAT’S
EVALUATION COMES EVERY YEAR.
EVERY FIVE YEARS IT MIGHT BE FINE TO LOOK AT THE OTHER
CREDIT. GREAT CREDITS R AND D,
MODEST FILM CREDIT I’M IN FAVOR OF BECAUSE OF ITS
EFFECTS ON TOURISM AND EFFECTS ON WORK FORCE
DEVELOPMENT. I THINK IT’S HARD TO SAY ONLY
BECAUSE WE HAVEN’T REALLY STUDY THE CAREFULLY.
I WOULD REALLY COMPLIMENT THE HAWAI’I STATE LEGISLATE
FOR DECIDING TO ALLOW MORE INFORMATION TO BE AVAILABLE
TO RESEARCHERS. THAT WAS ONE OF THE BIG
PROBLEMS WITH ACT 211 WAS THE BERLIN WALL OF
INFORMATION. BASICALLY, FIRMS REPORTED
TO THE STATE AND NOBODY ELSE KNEW ANYTHING ABOUT
THE PROGRAM. IT WAS ONLY LATE IN THE
PROGRAM THAT THE NAMES OF THE FIRMS RECEIVING THE
CREDITS WERE ACTUALLY RELEASED.
ALL THAT WE HAD WERE AGGREGATE TOTALS.
VIRTUALLY IMPOSSIBLE TO STUDY.
PEOPLE OUT THERE RECEIVING THE CREDITS SAID TAKE US ON
OUR WORD THIS PROGRAM IS WORKING.
THAT’S A RIDICULOUS WAY FOR STATE PROGRAMS TO OPERATE.
>>VERY TRANSPARENT CREDIT. AND IT IS, I WOULD SAY THIS IS A
VERY MODEST CREDIT. IT IS FISCALLY RESPONSIBLE.
I AM OBVIOUSLY GOING TO BE A BIG ADVOCATE.
>>IT’S ONE THAT YOU NEED TO BASICALLY DEFEND ALMOST
YEARLY BASIS WITH THE LEGISLATURE.
YES. THAT WINDOW CONTINUES.
YES. AGAIN WE NEED TO TRY TO
PROTECT IT AT ALL COSTS. BECAUSE OF THE
PREDICTABILITY STABILITY FACTOR.
WORD TRAVELS QUICKLY AND WE CAN’T HAVE THAT
INSTABILITY.>>MALIA: THANK YOU ALL.
I LEARNED SO MUCH THIS HOUR. THANK YOU VERY MUCH.
NEXT TIME ON INSIGHTS, WOMEN HAVE BROKEN MANY BARRIERS
IN HAWAI’I’S WORKPLACE. THEY’RE CEO’S SENATORS AS
WELL AS POLICE OFFICERS AND FIREFIGHTERS.
DESPITE DEMONSTRATING THEIR ABILITY TO FUNCTION AS
WELL AS MEN IN MANY FIELDINGS, MEN OFTEN GET
PAID MORE FOR THE SAME WORK.
AND OUTDATED STEREOTYPES ABOUT WOMEN SOMETIMES
LEAVE THEM RELEGATED TO LESSER SKILLED JOBS.
ON THE NEXT INSIGHTS ON PBS HAWAI’I, WHAT STRUGGLES
STILL REMAIN FOR WOMEN IN THE WORKPLACE? THAT’S NEXT
TIME ON INSIGHTS ON PBS HAWAI’I.
I’M MALIA MATTOCH. A HUI HO.

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