STATE OF NEVADA
GOVERNOR’S OFFICE OF ECONOMIC DEVELOPMENT
& NEVADA FILM OFFICE
PUBLIC HEARING
April 14, 2014
The Governor’s Office of Economic Development & the Nevada Film Office Public
Hearing was called to order by Business Development Director Brad Mamer at 1:09 p.m. in
the Grant Sawyer Building, Governor’s Board Room, 555 E. Washington Avenue, Suite
5100, Las Vegas, Nevada, 89101 and the Nevada State Capitol Building, The Guinn Room,
101 S. Carson Street, Carson City, Nevada, 89701 via video conference.
1.
ROLL CALL/CALL TO ORDER
Mr. Brad Mamer welcomed the attendees and described the purpose of the hearing which
was to review applications for certificates of eligibility for transferable tax credits for
Kalen Productions (a CBS corporation affiliate), LPF ONE DTIG, LLC (Lola Pictures)
and Lake Mead Productions, LLC (LMP)
STAFF MEMBERS PRESENT
Mr. Brad Mamer, Business Development Director, GOED
Mr. Eric Preiss, Director, NFO
Ms. Vera Adams, Executive Assistant, GOED
Ms. Lauren Hawkins, Administrative Assistant, GOED
Ms. Shante Willis, Administrative Assistant, GOED
Ms. Danette Tull, Film Resource Coordinator, NFO
Ms. Veronica Quarles, Operations Coordinator, NFO
Mr. Chaunsey Chau-Duong, Policy Advisor, Lt. Governor’s Office
GUESTS PRESENT
Mr. Laurence Franks, Kalen Productions/CBS
Mr. Jonathan Jenkins, Kalen Productions/CBS
Mr. Jason Miller, Downtown Films
Ms. Krystle Aguilera, Downtown Films
Mr. Kevin Bowe, Downtown Films
Mr. Mark Balint, Silver State Productions
Mr. Chris Ramirez, Lola Pictures
Mr. Alex Orlovsky, Verisimilitude Productions
Mr. Joshua Cohen, Cohencidence Productions
Mr. Patrick Peach, Lake Mead Productions
Mr. Tony Grazia, Lake Mead Productions
Mr. J.R. Reid, JR Lighting
Mr. Anthony Keep, Keep Public Relations
Mr. Jeremy Settles, Got Films
Mr. Greg Frazier, Sound Technician
Ms. Amy Murphy, Production Manager
Mr. Robert Starling, Starling Productions
Assemblywoman Irene Bustamante Adams, Assembly District 42
2.
PUBLIC COMMENT
Mr. Mamer opened public comment. No public comments were made.
3.
EXECUTIVE DIRECTOR’S COMMENTS
Mr. Mamer noted that the Executive Director could not attend this hearing and thanked
everyone present for attending the hearing. Mr. Mamer commented that this was the
second hearing conducted by GOED, the first being a hearing for Sony Pictures’ Mall
Cop 2. Mr. Mamer announced that the tax credit for Mall Cop 2 has been approved and
that the film would begin production the week of April 21, 2014. Mr. Mamer
commenced the review of the three applications.
4.
KALEN PRODUCTIONS, INC., A CBS CORPORATION AFFILIATE
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PRODUCTION TYPE: TELEVISION PILOT
Mr. Eric Preiss introduced the application from Kalen Productions/CBS which was
submitted on February 26, 2014. The Nevada Film Office determined the production,
titled In the Spotlight, to be a qualified production pursuant to NRS 360.7586. This
production will be primarily filmed at the Mirage Las Vegas and has reported it will incur
$892,430 in qualified expenditures, which meets the statutory minimum spend of
$500,000. The projected rating for the production is undetermined as rated by the Motion
Picture Association of America. The designated producers for the show are Nigel Lithgoe
and Wyleen May, and the Nevada designated address for the production, pursuant to
NRS 360.7583, is the Mirage Resort, 3400 Las Vegas Boulevard South,
Las Vegas, NV 89109. Kalen Productions has designated Mr. Nigel Lithgoe as its
required full-time employee and Mr. Laurence Franks, Vice President of Finance as its
authorized representatives. Mr. Preiss introduced Mr. Laurence Franks and Mr. Jonathan
Jenkins from Kalen Productions/CBS Corporation.
Mr. Mamer described that the application process involves an applicant providing all of
the documentation necessary to meet the requirements of the program, including
completing a draft incentive calculation. Mr. Mamer continued by saying for purposes of
public disclosure, the next part of the hearing would include the applicant verifying for
the record that Kalen Productions/CBS Corporation has satisfied the application of
eligibility requirements pursuant to NRS 360.759.
Mr. Mamer reviewed the following series of questions that cover the application
eligibility requirements pursuant to NRS 360.759.

Kalen Productions is aware that the application shows the percentage of Nevada
total expenditures exceeds 60% of the qualified expenditures.
Mr. Franks confirmed this, adding that the application shows 86%.
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Kalen Productions is aware that it must provide GOED with an audit completed
by a Nevada licensed certified public accountant approved by our agency at the
conclusion of the production.
Kalen Productions is aware that if this audit were to show the Nevada total
expenditures did not exceed 60% of the total qualified expenditures, the
production would not receive any transferable tax credits.
Kalen Productions is aware that any actual tax credits issued for the production
can only be used for taxes imposed on financial institutions as described under
NRS 363A; NRS 363B which is taxes imposed on business; NRS 363.370 which
is gaming licensing fees; and NRS 680B which is any fees and taxes imposed on
insurance; or any combination thereto.
Kalen Productions is aware that after GOED’s review of the audit, the production
will be required to make an irrevocable declaration of the amount of transferable
tax credits that will be applied to the financial institution taxes, business taxes,
gaming license fees, and insurance fees and taxes described in the statute.
Kalen Productions is aware that any transfer of issued tax credits must be
approved in advance by the Office of Economic Development.
Any issued tax credits expire 4 years after the date on issuance.
Mr. Franks confirmed all of these statements to be true.
Mr. Mamer reviewed the following series of questions that cover the qualified
expenditures and production costs pursuant to NRS 360.7591.
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Kalen Productions is aware that all qualified expenditures are subject to an
independent determination that such costs are reasonable and customary.
Kalen Productions is aware and has reviewed those types of expenditures and
costs that are not eligible to serve as qualified expenditures such as marketing,
financing, and payments of profits or those others that are covered under
NRS 360.7951(2)
Mr. Franks confirmed these statements to be true.
Mr. Mamer reviewed the following series of questions that cover the calculation of
estimated transferable tax credits pursuant to NRS 360.7592 and NRS 360.7593.
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As part of the application, Kalen Productions completed an Incentive Calculation
Worksheet.
Kalen Productions is aware that Nevada personnel expenditures are calculated at a
15% incentive, which total amounts to $21,016.
Nevada direct expenditures are calculated at a 15% incentive which total amounts
to $33,933.
Non-Nevada personnel expenditures are calculated at a 12% incentive which total
amounts to $47,964.
Kalen Productions acknowledges that if approved by GOED, this production
would receive a certificate of eligibility for a maximum transferable tax credit of
$102,913.
Mr. Franks confirmed these statements to be true.
Mr. Mamer asked how this production is in the economic interest of the State.
Mr. Franks replied that the production will be hiring 52 Nevada residents on a temporary
basis with a payroll exceeding $140,000, purchasing goods and services from local
Nevada vendors of approximately $226,220, hiring an additional 89 non-Nevada
residents with a net payroll of $399,704, all totaling $766,030 in qualified expenditures.
The television pilot will also highlight the Las Vegas Strip, the Mirage, and promote
tourism to Nevada.
Mr. Mamer asked for a further description of the Nevada workforce for the production.
Mr. Franks estimated 141 part-time jobs with total wages and fringe benefits of $539,813,
working approximately 7,229 hours which calculates to an hourly rate of $74.67. These
wage levels are consistent with the union rates of I.A.T.S.E. There are no ATL Nevada
residents. The average salary for BTL Nevada residents is $30 per hour.
Mr. Mamer asked what the term of employment will be. Mr. Franks replied that
employment began February 24, 2014 and end March 7, 2014 with principal photography
running from March 4-5, 2014, or for two days.
Mr. Mamer asked if any of these positions will be permanent. Mr. Franks stated that they
will not be permanent.
Mr. Mamer asked if the production will be filming at multiple locations in the state and if
the production will be using any Nevada production studios. Mr. Franks replied in the
negative.
Mr. Mamer asked if the production anticipated any permanent capital investments in the
state. Mr. Franks responded that they will not be making any capital investments.
Mr. Mamer asked if the production is using any Nevada set construction businesses.
Mr. Franks responded yes and that 79% of their costs are Nevada labor, materials and
vendors.
Mr. Mamer asked if the production is using any Nevada wardrobe businesses.
Mr. Franks responded no.
Mr. Mamer asked if the production is using any Nevada make-up and hairdressing
businesses. Mr. Franks confirmed that 1% of these costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada camera and video businesses.
Mr. Franks confirmed that 4% of these costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada lighting businesses. Mr. Franks
confirmed that 63% of these costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada sound businesses. Mr. Franks
confirmed that 100% of these costs are Nevada labor and materials.
Mr. Mamer asked if any portion of the post-production special visual effects will be
completed by a Nevada business. Mr. Franks responded no.
Mr. Mamer asked if any portion of the production and post-production film and
laboratory will be completed by a Nevada business. Mr. Franks stated that all film and
laboratory costs will be incurred outside of Nevada.
Mr. Mamer asked if any portion of the post-production film and tape editing will be
completed by a Nevada business. Mr. Franks stated that all post-production film and tape
editing costs will be incurred outside of Nevada.
Mr. Mamer asked if any portion of the post-production music will be completed by a
Nevada business. Mr. Franks stated that none of the post-production music costs will be
incurred in Nevada.
Mr. Mamer asked if any portion of the post-production sound will be completed by a
Nevada business. Mr. Franks responded that all post-production sound costs will be
incurred outside of Nevada.
Mr. Mamer asked if the transferable tax credit program contributed to the production
being filmed in Nevada. Mr. Franks responded that the transferable tax credit program
was an incentive. Kalen Productions evaluates all the tax credit and incentive programs
on a state by state basis and factors in the tax credit with the cost of producing a
particular program. Mr. Mamer asked if Kalen Productions considered any other states
for this program. Mr. Franks replied that they considered California.
Mr. Mamer asked if there were any suggestions on how Nevada could attract more usage
of Nevada companies overall. Mr. Franks replied that as long as the incentive programs
remains, productions will continue to shoot in the state and that infrastructure will
continue to build around the incentive program and the productions. When there is
demand, the supply will come. Every production always looks to local vendors and local
labor first when they can to reduce costs and over time, if there is longevity with the
program, then those resources and infrastructure will continue building.
Mr. Mamer asked if there were any suggestions on how Nevada could expand business
production such as post-production, music, editing, sound, film and lab work.
Mr. Franks replied that from a television perspective, post-production is generally where
the writers will be for a scripted television series, and they would look for visual effects
houses. If those businesses were in Nevada, they would use them.
Mr. Mamer asked what permanent production facilities would Kalen Production like to
see built in Nevada, if any. Mr. Franks replied that they would look for facilities with at
least four sound stages, adequate parking for crew and production vehicles. These houses
would also need production offices, a mill, storage facilities and preferably be within 30
minutes of hotels and the airport.
Mr. Mamer asked if Mr. Franks had any questions for Mr. Preiss or himself. Mr. Franks
asked about Section 1(e) of the application. What is the time limit to make the
Declaration of the amount of transferable tax credits that will be applied to each tax or to
be transferred. Mr. Preiss responded that Kalen Productions has 30 days after the
issuance of the tax credit to make the determination. That determination can be that
Kalen Productions is planning to transfer the credits. They can be transferred more than
once. Kalen Productions needs to identify what those intentions are if they are planning
to use them against one of those specific taxes or not. Mr. Franks stated that he
understood.
5.
PUBLIC COMMENTS
Mr. Mamer opened the floor to public comments on agenda item #4. No public
comments were made. Mr. Mamer and Mr. Preiss thanked Kalen Productions for its
application and for attending the hearing.
6.
LPF ONE DTIG, LLC (LOLA PICTURES)
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PRODUCTION TYPE: FEATURE FILM
Mr. Preiss introduced the application from LPF ONE DTIG, LLC (Lola Pictures) which
was submitted on February 20, 2014. The Nevada Film Office determined this feature
film to be a qualified production pursuant to NRS 360.7586. The production title is GNG
Untitled Project. It features Dakota Fanning as lead actor, and will be filmed primarily
around Las Vegas. The production will incur $1.8 million in qualified expenditures,
which meets the statutory minimum of $500,000. The projected rating is PG-13, as rated
by the Motion Picture Association of America. The designated producer for the film is
Chris Ramirez, and the Nevada designated address for the production pursuant to
NRS 360.7583 is 333 S. 6th Street, Suite 200, Las Vegas, NV 89101. LPF has
designated Chris Ramirez as its full-time employee and has noted that Alex Orlovsky,
Jason Miller, Kevin Bowe, Amy Murphy, Mark Balint and Charles Cantrell are its
authorized representatives. Mr. Ramirez, Mr. Orlovsky and Mr. Bowe are representing
for today’s hearing.
Mr. Mamer reviewed the following series of questions that cover the application
eligibility requirements pursuant to NRS 360.759. LPF will be referred to as Lola
Pictures for this hearing.
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Lola Pictures is aware that the application shows the percentage of Nevada total
expenditures exceeds 60% of the qualified expenditures.
Mr. Ramirez confirmed this, adding that the application shows 77%.
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Lola Pictures is aware that it must provide GOED with an audit completed by a
Nevada licensed certified public accountant approved by our agency at the
conclusion of the production.
Lola Pictures is aware that if this audit were to show the Nevada total
expenditures did not exceed 60% of the total qualified expenditures, the
production would not receive any transferable tax credits.
Lola Pictures is aware that any actual tax credits issued for the production can
only be used for taxes imposed on financial institutions as described under
NRS 363A; NRS 363B which is taxes imposed on business; NRS 363.370 which
is gaming licensing fees; and NRS 680B which is any fees and taxes imposed on
insurance; or any combination thereto.
Lola Pictures is aware that after GOED’s review of the audit, the production will
be required to make an irrevocable declaration of the amount of transferable tax
credits that will be applied to the financial institution taxes, business taxes,
gaming license fees, and insurance fees and taxes described in the statute.
Lola Pictures is aware that any transfer of issued tax credits must be approved in
advance by the Office of Economic Development.
Any issued tax credits expire 4 years after the date on issuance.
Mr. Ramirez confirmed all of these statements to be true.
Mr. Mamer reviewed the following series of questions that cover the qualified
expenditures and production costs pursuant to NRS 360.7591.
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Lola Pictures is aware that all qualified expenditures are subject to an independent
determination that such costs are reasonable and customary.
Lola Pictures is aware and has reviewed those types of expenditures and costs that
are not eligible to serve as qualified expenditures such as marketing, financing,
and payments of profits or those others that are covered under NRS 360.7951(2).
Mr. Ramirez confirmed these statements to be true.
Mr. Mamer reviewed the following series of questions that cover the calculation of
estimated transferable tax credits pursuant to NRS 360.7592 and NRS 360.7593.
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As part of the application, Lola Pictures completed an Incentive Calculation
Worksheet.
Lola Pictures is aware that Nevada personal expenditures are calculated at a 15%
incentive, which total amounts to $87,199.
Nevada direct expenditures are calculated at a 15% incentive which total amounts
to $115,803.
Non-Nevada personnel expenditures are calculated at a 12% incentive which total
amounts to $57,330.
Mr. Mamer noted that Lola Pictures calculated that it qualified for an additional
2% incentive for below the line personnel who are Nevada residents being greater
than 50% of the total qualified below the line personnel. Mr. Mamer asked how
Lola Pictures determined that it qualified for this additional incentive.
Mr. Ramirez responded that their below the line personnel equals 97% of total
crew, local and non-local.
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Lola Pictures acknowledges that if approved by GOED, this production would
receive a certificate of eligibility for a maximum transferable tax credit of
$296,954.
Mr. Ramirez confirmed these statements to be true.
Mr. Mamer asked how this production is in the economic interest of the State.
Mr. Ramirez replied that the production will be hiring 235 Nevada residents on a
temporary basis with a payroll exceeding $580,000, purchasing goods and services from
local Nevada vendors of approximately $772,000, hiring an additional 19 non-Nevada
residents with a net payroll of $477,450, all totaling $1.8 million in qualified
expenditures. The feature film will also highlight the city of Las Vegas in general, the
Las Vegas Strip, Downtown Las Vegas and surrounding areas such as Mt. Charleston,
Red Rock Canyon, and Valley of Fire State Park. Highlighting these areas will promote
tourism to Nevada. Mr. Ramirez also noted that this feature film is locally financed, so
profits and back-end will flow back into Nevada as well.
Mr. Mamer asked for a further description of the Nevada workforce for the production.
Mr. Ramirez estimated 235 part-time jobs with total wages and fringe benefits of
$581,327, working approximately 24,923 hours which calculates to an average hourly
rate of $23.32. These wage levels are consistent with the union rates of SAG/AFTRA
low-budget rates, and non-union employees are paid at minimum wage and above. There
are 17 ATL Nevada residents with an average wage of $63.86 per hour. Mr, Ramirez
noted that a few of those ATLs are first-time ATLs. Lola Pictures was able to promote
from within. There are 218 BTL Nevada residents with an average salary of $19.48 per
hour. Mr. Mamer noted that the BTL wage is just below the State’s average minimum
wage and close to the County’s wage, which is a great achievement for Lola Pictures.
Mr. Mamer asked what the term of employment will be. Mr. Ramirez replied that
employment began in early February 2014 and end May 2, 2014 with principal
photography running from March 31, 2014 through May 2, 2014, or for 25 days.
Mr. Mamer asked if any of these positions will be permanent. Mr. Ramirez stated that
they will not be permanent.
Mr. Mamer asked if the production will be filming at multiple locations in the state and if
the production will be using any Nevada production studios. Mr. Ramirez reiterated the
film will feature Downtown Las Vegas, the Strip, Red Rock Canyon, Valley of Fire and
Floyd Lamb State Park.
Mr. Mamer asked if Lola Pictures is using any Nevada production studios. Mr. Ramirez
replied no.
Mr. Mamer asked if the production anticipated any permanent capital investments in the
state. Mr. Ramirez responded that they will not be making any capital investments.
Mr. Mamer asked if the production is using any Nevada set construction businesses.
Mr. Ramirez responded yes and that 100% of their costs are Nevada labor, materials and
vendors.
Mr. Mamer asked if the production is using any Nevada wardrobe businesses.
Mr. Ramirez responded yes and that 50% of their costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada make-up and hairdressing
businesses. Mr. Ramirez confirmed that 52% of these costs are Nevada labor and
materials.
Mr. Mamer asked if the production is using any Nevada camera and video businesses.
Mr. Ramirez confirmed that 100% of these costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada lighting businesses.
Mr. Ramirez confirmed that 100% of these costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada sound businesses. Mr. Ramirez
confirmed that 100% of these costs are Nevada labor and materials.
Mr. Mamer asked if any portion of the post-production special visual effects will be
completed by a Nevada business. Mr. Ramirez responded yes and that 2.5% of these
costs are Nevada labor and materials.
Mr. Mamer asked if any portion of the production and post-production film and
laboratory will be completed by a Nevada business. Mr. Ramirez stated that a small part
of film and laboratory costs will be incurred in Nevada. They are still determining the
amount.
Mr. Mamer asked if any portion of the post-production film and tape editing will be
completed by a Nevada business. Mr. Ramirez stated that a small portion of postproduction film and tape editing costs will be incurred in Nevada and that they are still
determining the amount.
Mr. Mamer asked if any portion of the post-production music will be completed by a
Nevada business. Mr. Ramirez stated that none of the post-production music costs will
be incurred in Nevada.
Mr. Mamer asked if any portion of the post-production sound will be completed by a
Nevada business. Mr. Ramirez responded that all post-production sound costs will be
incurred outside of Nevada.
Mr. Mamer asked if the transferable tax credit program contributed to the production
being filmed in Nevada. Mr. Ramirez responded that the transferable tax credit program
was an incentive and that they utilized the program as part of their financing plan to
attract their investors. Mr. Mamer asked if Lola Pictures considered any other states for
this program. Mr. Alex Orlovsky, Co-Producer on this project replied that they
considered New Mexico, Texas and Louisiana because of the combination of crew base
and tax credit, but Nevada offered a variety of geographical locations, such as mountains
and deserts all within close proximity of the city.
Mr. Mamer asked if there were any suggestions on how Nevada could attract more usage
of Nevada companies overall. Mr. Ramirez replied that increased work will bring a
steadier work force, and as the incentive program progresses, we will be able to keep
more jobs here instead of the jobs migrating to California. Mr. Ramirez also stated that
training programs are necessary for local crew. Mr. Orlovsky interjected that Lola,
Downtown Films and Silver State Films are doing an excellent job of building
infrastructure here in Nevada. They are doing an exceptional job of training people and
having an eye toward creating sustainable business in Nevada which contributes to the
success of tax incentive programs. Mr. Mamer commended Lola Pictures by stating that
this production has had the highest percentage of Nevada expenses by category and that
GOED and the State appreciate that.
Mr. Mamer asked if there were any suggestions on how Nevada could expand business
production such as post-production, music, editing, sound, film and lab work.
Mr. Ramirez replied that it would be building the local facilities out. Presently, local
facilities are not equipped to handle features such as this and other future projects on
schedule for Lola Pictures.
Mr. Mamer asked what permanent production facilities Lola Pictures would like to see
built in Nevada, if any. Mr. Ramirez replied that they would love to see a sizeable studio
someday, but to pay for that studio, to keep it operational and busy, the State incentive
needs to be increased to be more competitive with states like New Mexico and Louisiana.
Mr. Mamer asked for Mr. Ramirez’s thoughts on what size studio would be needed here.
Mr. Jason Miller of Downtown Films replied that the state would need a studio of at least
150,000 square feet. Mr. Orlovsky added that post-production facilities would be
valuable and stated that as a producer, if we had a real DI facility here, he would be able
to look at camera tests and would be able to look at dailies on a big screen. He stated that
ADR and Foley sound facilities would be helpful because that is work that can be done
during productions. Many times when actors are shooting here, another studio may
require them to do a few lines of ADR. That kind of work could be done at those
facilities, as they are not as expensive as it would be to have that work done at a sound
stage.
Mr. Mamer asked if Mr. Ramirez had any questions for himself or Mr. Preiss.
Mr. Ramirez replied no and thanked his staff and the local film industry attendees for
their support and also thanked Mr. Preiss for all of his help in guiding Lola Pictures
through the process. Mr. Mamer and Mr. Preiss thanked Lola Pictures on behalf of
GOED for the application and their attendance at the hearing.
7.
PUBLIC COMMENTS
Mr. Mamer opened the floor to public comments on agenda item #6. Mr. Kevin Bowe
stated that is important that Nevada has this incentive and that we see this community
grow. He stated that about 33% of Nevada’s revenue comes from the gaming industry
and having more production here will increase tourism in Nevada. He has personally
seen how an increase in tourism can turn things around for a city such as in New Orleans.
After Hurricane Katrina, their incentive helped rebuild the city, and they now have sound
stages and sometimes have more production than they can sometimes handle. He has
also seen that in Philadelphia. When this state has the local crew built in from within, we
will be able to handle the amount of production when it comes in, and that is a big part of
the incentive working and the State working with production companies when they come
to Nevada. Mr. Mamer and Mr. Preiss thanked Mr. Bowe for his comments.
J.R. Reid from JR Lighting commented that when the bill was first crafted, that this was
exactly the kind of production that was targeted. The purpose of the program was to keep
local production in state using state resources and that he supports both Lola Pictures and
Lake Mead Productions one hundred percent. Mr. Mamer and Mr. Preiss thanked
Mr. Reid for his comments.
8.
LAKE MEAD PRODUCTIONS
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PRODUCTION TYPE: FEATURE FILM
Mr. Eric Preiss introduced the application from Lake Mead Productions, LLC (LMP),
which was submitted on March 27, 2014. The Nevada Film Office determined the
production titled “Drowned” to be a qualified production pursuant to NRS 360.7586.
The film features Fallon Goodson as the lead actor and this production will be primarily
filmed at Lake Mead and around Las Vegas. The production has reported it will incur
$1.6 million in qualified expenditures, which meets the statutory minimum spend of
$500,000. The projected rating for the production is R, as rated by the Motion Picture
Association of America. The designated producer for the film is Colleen Camp, and the
Nevada designated address for the production, pursuant to NRS 360.7583, is 1489 West
Warm Springs Road, Suite 1100, Henderson, Nevada 89014. LMP has designated
Colleen Camp as its required full-time employee and Mr. Joshua A. Cohen,
Mr. Patrick Peach and Mr. Tony Grazia as its authorized representatives. Mr. Preiss
introduced Mr. Cohen, Mr. Grazia and Mr. Peach representing for the hearing.
Mr. Mamer described that the application process involves an applicant providing all of
the documentation necessary to meet the requirements of the program, including
completing a draft incentive calculation. Mr. Mamer continued by saying for purposes of
public disclosure, the next part of the hearing would include the applicant verifying for
the record that LMP has satisfied the application of eligibility requirements pursuant to
NRS 360.759.
Mr. Mamer reviewed the following series of questions that cover the application
eligibility requirements pursuant to NRS 360.759.

LMP is aware that the application shows the percentage of Nevada total
expenditures exceeds 60% of the qualified expenditures.
Mr. Cohen confirmed this, adding that the application shows 90%.
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LMP is aware that it must provide GOED with an audit completed by a Nevada
licensed certified public accountant approved by our agency at the conclusion of
the production.
LMP is aware that if this audit were to show the Nevada total expenditures did not
exceed 60% of the total qualified expenditures the production would not receive
any transferable tax credits.
LMP is aware that any actual tax credits issued for the production can only be
used for taxes imposed on financial institutions as described under NRS 363A;
NRS 363B which is taxes imposed on business; NRS 363.370 which is gaming
licensing fees; and NRS 680B which is any fees and taxes imposed on insurance;
or any combination thereto.
LMP is aware that after GOED’s review of the audit, the production will be
required to make an irrevocable declaration of the amount of transferable tax
credits that will be applied to the financial institution taxes, business taxes,
gaming license fees, and insurance fees and taxes described in the statute.
LMP is aware that any transfer of issued tax credits must be approved in advance
by the Office of Economic Development.
Any issued tax credits expire 4 years after the date on issuance.
Mr. Cohen confirmed all of these statements to be true.
Mr. Mamer reviewed the following series of questions that cover the qualified
expenditures and production costs pursuant to NRS 360.7591.


LMP is aware that all qualified expenditures are subject to an independent
determination that such costs are reasonable and customary.
LMP is aware and has reviewed those types of expenditures and costs that are not
eligible to serve as qualified expenditures such as marketing, financing, and
payments of profits or those others that are covered under NRS 360.7951(2).
Mr. Cohen confirmed these statements to be true.
Mr. Mamer reviewed the following series of questions that cover the calculation of
estimated transferable tax credits pursuant to NRS 260.7592 and NRS 360.7593.
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As part of the application, LMP completed an Incentive Calculation Worksheet.
LMP is aware that Nevada personal expenditures are calculated at a 15%
incentive, which total amounts to $88,622.
Nevada direct expenditures are calculated at a 15% incentive which total amounts
to $73,679.
Non-Nevada personal expenditures are calculated at a 12% incentive which total
amounts to $62,873.
Mr. Mamer noted that LMP calculated that it qualified for an additional 2%
incentive for below the line personnel who are Nevada residents being greater
than 50% of the total qualified below the line personnel.
Mr. Cohen confirmed these statements to be true.
Mr. Mamer asked how LMP determined it qualified for this additional 2% incentive for
below the line personnel. Mr. Cohen responded that the application shows that Nevada
below the line personnel equaled 95.9 % of total personnel, and the Nevada below the
line personnel expenditures, local and non-local equaled 52.6%, which LMP believes
meets the statutory and regulatory requirements for this additional credit pursuant to
NRS 360.7592(2)(a).
LMP acknowledges that if approved by GOED, this production would receive a
certificate of eligibility for a maximum transferable tax credit of $257,291.
Mr. Cohen confirmed these statements to be true.
Mr. Mamer asked how this production is in the economic interest of the State.
Mr. Cohen replied that the production will be hiring 204 Nevada residents on a temporary
basis with a payroll exceeding $680,948, purchasing goods and services from local
Nevada vendors of approximately $491,190, hiring an additional 15 non-Nevada
residents with a net payroll of $523,938, all totaling $1.6 million in qualified
expenditures. The film will also highlight the Lake Mead Recreational area, as well as
off-Strip and rural Nevada locations which will promote tourism to Nevada.
Mr. Mamer asked for a further description of the Nevada workforce for the production.
Mr. Cohen estimated 204 part-time jobs with total wages and fringe benefits of $680,948,
working approximately 21,668 hours which calculates to an hourly rate of $31. These
wage levels are consistent with the union rate of SAG/AFTRA and non-union employees
will be paid above minimum wage. There is one ATL Nevada resident. Her name is
Jessica Chandler. She is the writer/director of the film. Ms. Chandler insisted the
production be filmed in Nevada. There are 164 below the line Nevada personnel. The
average salary for BTL Nevada residents is $28 per hour. Mr. Mamer noted for the
record that this figure is above the State hourly rate average of $20.50, which is a goal of
any incentive program and GOED appreciates that.
Mr. Mamer asked what the term of employment will be. Mr. Cohen replied that the film
is already in pre-production with principal photography running from May 25-28, 2014,
or for 18-19 days in total. Mr. Cohen stated that post production may occur in Nevada,
which will extend production dates into August 2014.
Mr. Mamer asked if any of these positions will be permanent. Mr. Cohen stated that they
will not be permanent.
Mr. Mamer asked if the production will be filming at multiple locations in the state and if
the production will be using any Nevada production studios. Mr. Cohen replied that they
will film primarily at Lake Mead National Recreational area, Henderson, Boulder City,
Nelson and other places around Las Vegas.
Mr. Mamer asked if LMP is using any Nevada production studios.
Mr. Cohen responded no.
Mr. Mamer asked if the production anticipated any permanent capital investments in the
state. Mr. Cohen responded that they will not be making any capital investments.
Mr. Mamer asked if the production is using any Nevada set construction businesses.
Mr. Cohen responded yes and that 98% of their costs are Nevada labor, materials and
vendors.
Mr. Mamer asked if the production is using any Nevada wardrobe businesses.
Mr. Cohen responded yes and that 67% of their costs are Nevada labor, materials and
vendors.
Mr. Mamer asked if the production is using any Nevada make-up and hairdressing
businesses. Mr. Cohen confirmed that 100% of these costs are Nevada labor and
materials.
Mr. Mamer asked if the production is using any Nevada camera and video businesses.
Mr. Cohen confirmed that 75% of these costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada lighting businesses. Mr. Cohen
confirmed that 100% of these costs are Nevada labor and materials.
Mr. Mamer asked if the production is using any Nevada sound businesses. Mr. Cohen
confirmed that 100% of these costs are Nevada labor and materials.
Mr. Mamer asked if any portion of the post-production special visual effects will be
completed by a Nevada business. Mr. Cohen responded that issue is to be determined.
Mr. Mamer asked if any portion of the production and post-production film and
laboratory will be completed by a Nevada business. Mr. Cohen stated that issue is to be
determined.
Mr. Mamer asked if any portion of the post-production film and tape editing will be
completed by a Nevada business. Mr. Cohen stated that issue is to be determined.
Mr. Mamer asked if any portion of the post-production music will be completed by a
Nevada business. Mr. Cohen stated that 100% of these costs are Nevada labor and
materials.
Mr. Mamer asked if any portion of the post-production sound will be completed by a
Nevada business. Mr. Cohen stated that issue is to be determined. Mr. Mamer stated that
currently 3% of the costs are Nevada labor and materials. Mr. Cohen stated that
percentage will increase.
Mr. Mamer asked if the transferable tax credit program contributed to the production
being filmed in Nevada. Mr. Cohen responded that the transferable tax credit program
was an incentive. Mr. Cohen stated that the film experienced delays due to bringing
budget, schedule and location together. The introduction of Nevada’s incentive program
enabled the production to move forward and shoot in-state. Mr. Mamer asked if LMP
considered any other states for this program. LMP replied that neighboring states such
Washington, Oregon and California, as well as Louisiana, New Mexico, North Carolina,
and Georgia were considered. The proximity to Los Angeles and the fact that the script
was written by a Nevada resident with Nevada locations in mind along with the tax
incentive program was the deciding factor in shooting here. They would not consider any
state that did not have a tax incentive.
Mr. Mamer asked if there were any suggestions on how Nevada could attract more usage
of Nevada companies overall. Mr. Cohen replied by saying that Mr. Preiss is doing a
fantastic job at administering this program to make it workable for this market and the
Hollywood industry. He stated the way to make this program more film friendly is to
increase the credit level and the program cap and remove the limit on the program length.
If Nevada had a 25% credit with a $50 million annual cap and no sunset, we could attract
more production. The sunset is the four-year pilot program. Shows like CBS’s In the
Spotlight look at long-term locations. As in the case of shows like American Idol that
has had multiple seasons, they don’t want to select a location where the tax credit
program is going to expire in four years. They want to know that there is a future in their
chosen location. Mr. Cohen stated that post production facilities and production facilities
such as stages will come as a result of more production, and higher demand will come
from more competitive incentive program elements.
Mr. Mamer asked Mr. Grazio or Mr. Peach if they had any thoughts on the subject.
Mr. Peach replied that infrastructure development is necessary. If there is a great or
developing infrastructure in place, a producer can go into that state and use everything
local that is available. Active infrastructure development is the secret to bringing more
work to a state. You must have a tax incentive that is valid that has enough money to be
competitive. He stated that 25% would be fantastic if the state had a valid infrastructure
to back it up. That would mean that a producer could come from elsewhere without
having to bring crew from another location, use everything here and maximize the tax
incentive. That is part of every entertainment project’s business plan. You need a
competitive vendor base and active training program to go along with that infrastructure.
Mr. Grazio commented that Nevada has a huge advantage over other states by being in
close proximity to California. The weather in Nevada is also a great advantage.
Mr. Mamer asked LMP for any thoughts on permanent production facilities that would be
built in the state. Mr. Cohen replied that if Nevada is looking for long-term production, a
large sound stage with multiple stages is absolutely crucial for attracting long-term
employment. To answer GOED’s current application question of whether a production is
going to lead to long-term employment, the answer will almost always be no until we
have facilities that can be used every single week of the year. If Nevada had sound stage,
along with supporting businesses nearby, producers could have everything here that they
could get in Hollywood, but slightly cheaper here. Mr. Mamer asked Mr. Peach if he had
any thoughts on the subject. Mr. Peach replied that post production is a viable part of the
business that can easily be done in Nevada. Producers would be able to do everything in
Nevada except for the final mix. On the completion side of visual effects, more
sophisticated facilities could be used here a lot. Mr. Mamer asked Mr. Grazio if he
would like to make a statement. Mr. Grazio stated if Nevada had a studio, the state
would get television shows basing in Nevada.
Mr. Mamer asked if LMP had any questions for himself or Mr. Preiss. LMP replied no.
Mr. Mamer and Mr. Preiss thanked LMP for their application and attendance at the
hearing.
9.
PUBLIC COMMENTS
Mr. Mamer opened the floor to public comments on agenda item #8. J.R. Reid reiterated
that this is the type of production the local industry had hoped to target and offered his
support of LMP. Mr. Mamer and Mr. Preiss thanked Mr. Reid for his comments.
Mr. Greg Frazier, a local boom operator, stated that he agreed with Mr. Peach about
having a good infrastructure and training in Nevada. He also stated that Nevada must
have a sound stage. A sound stage will attract long-term projects. Mr. Mamer and
Mr. Preiss thanked Mr. Frazier for his comments.
Mr. Anthony Keep, Keep Public Relations agreed with Mr. Cohen’s comments about
production support from the State in regards to increasing the credit and removing the
sunset clause. He hopes for bi-partisan support of the tax incentive now and in the future.
Mr. Mamer and Mr. Preiss thanked Mr. Keep for his comments.
10.
ADJOURNMENT
A MOTION WAS MADE BY MR. MAMER TO ADJOURN THE HEARING.
THE HEARING WAS ADJOURNED AT 2:17 P.M.
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