Oscar-nominated ‘Three Billboards’ was filmed in NC, thanks to incentives. Should there be more?

Frances McDormand has won several awards for her role in “Three Billboards Outside Ebbing, Missouri” and is nominated for the Best Actress Oscar. The movie was filmed in Sylva, N.C., a town partially picked because of North Carolina’s film incentives program.
Frances McDormand has won several awards for her role in “Three Billboards Outside Ebbing, Missouri” and is nominated for the Best Actress Oscar. The movie was filmed in Sylva, N.C., a town partially picked because of North Carolina’s film incentives program. AP

As director of the tourism department in Jackson County, Nick Breedlove sends out a lot of visitor guides. And when he asks why people are interested in visiting the county in Western North Carolina, one particular answer has come up a lot these past few months.

“Our website asks how people learned about Jackson County or Sylva, and there’s an ‘Other’ field,” Breedlove said. “A lot of people have been typing ‘Ebbing’ or ‘Three Billboards.’”

That’s “Three Billboards Outside Ebbing, Missouri” - an independent movie filmed in 2016 in and around Sylva, a town west of Asheville with a population around 2,500. Lured in part by a $3.1 million grant from the state’s film-incentives program, the $15 million film has been a big hit, grossing more than $121 million worldwide and winning major acclaim during awards season.

More awards – and visitors – are likely to come. “Three Billboards” is up for seven Academy Awards Sunday night, including Best Picture.

The spotlight on “Three Billboards” has brought renewed attention to North Carolina’s film incentives program, which has decreased dramatically from its peak just a few years ago. In 2012, productions directly spent a record $377 million in North Carolina making films including “Iron Man 3” – a Marvel Studios blockbuster made in the Wilmington area, which grossed more than $1 billion worldwide.

Last year, productions spent a fraction of that: $50 million, a figure that looks to be even lower in 2018. At this time, no major films or TV projects are scheduled to begin shooting in North Carolina this year, according to the North Carolina Film Office.

The producers of “Three Billboards” considered 20 locations for the fictional town of Ebbing, said Breedlove, choosing Sylva for its “historic small-town feel.” But Sylva probably would not have even been under consideration without financial incentives. That $3.1 million grant from the state represented more than 20 percent of the film’s budget.

Guy Gaster, director of the North Carolina Film Office, said incentives are an essential tool to keep films from going elsewhere, like Georgia, South Carolina, Louisiana or Canada. Proponents of the incentives say the projects produce jobs for residents, economic benefits for local businesses and vendors and a future tourism boost from pop culture fans looking for filming sites.

But you have to pay to play.

“The incentives offered by the state played a major role in recruiting ‘Three Billboards’ to North Carolina,” Gaster said. “The town setting and the fact that we had a crew base helped seal the deal. But to get us into the game for consideration, the incentives were a major draw.”

Oscar-nominated “Three Billboards Outside Ebbing, Missouri” was filmed in Sylva, N.C. and other parts of Western North Carolina to fill in for the fictional Ebbing. North Carolina tourism officials have promoted the town as a place to visit filming sites. AP

‘Hollywood East’

Two decades ago, when enough movies were being made around Wilmington (where EUE/Screen Gems Studios is located) for the town to become known as “Wilmywood,” North Carolina was considered Hollywood East. “Forrest Gump,” “The Crow,” “Blue Velvet,” “The Last of the Mohicans” and even “Teenage Mutant Nina Turtles” were among the movies made in North Carolina. So were TV series like “One Tree Hill” and “Dawson’s Creek.”

It was a glamorous, lucrative business, and other states wanted in. So they began offering financial incentives to lure productions away from North Carolina. With movie budgets rocketing upward, other countries also emerged as cheaper alternatives.

Dawson's Creek Raleigh
Filming of the WB television series “Dawson’s Creek” takes place July 25, 2001, in downtown Raleigh, N.C. “Dawson’s Creek” producers filmed the show in Wilmington, N.C., for several seasons but filmed some scenes in the Triangle. Michelle Williams and Kerr Smith, two of the show’s stars, sit at a table in the lower left. KAREN TAM AP

That’s what happened with “Cold Mountain,” Oscar-winning director Anthony Minghella’s 2003 adaptation of Charles Frazier’s Civil War epic. Although “Cold Mountain” was set in North Carolina, Minghella concluded it was going to cost too much to make it here.

“(When) the budget came in, we were faced with a dilemma,” the late director told The News & Observer in 2003. “Do we not make it at all, or find another way?”

Ultimately, Minghella took “Cold Mountain” to Romania, where costs were lower. It still cost around $80 million, but that was millions of dollars less than the budget would have been in North Carolina.

With North Carolina’s film business feeling the pinch, the legislature created a tax-credit incentive in 2006 of 15 percent on qualifying expenses. That started luring business back.

Things really picked up in 2011 after the state increased the film-incentive tax credit to 25 percent, which helped attract “Iron Man 3.” According to figures from the Motion Picture Association of America, “Iron Man 3” brought an estimated $179.8 million in spending and more than 2,000 full-time equivalent jobs to the state.

Iron Man 3
Marvel Studios’ “Iron Man 3,” starring Robert Downey Jr., was filmed in North Carolina in 2012 and received $20 million in film incentives. The film generated almost $180 million in spending at the time, according to the Motion Picture Association of America, Inc. Zade Rosenthal Marvel via Associated Press

A budgetary target

But after the state’s payouts totaled $61.2 million in 2013 and $80.7 million in 2014, the film incentive became a budgetary target. The conservative group Americans For Prosperity decried it as “Hollywood Handouts,” and the Republican-controlled General Assembly was listening. The state let the tax-credit program expire in 2014, replacing it with a smaller grant program of $10 million with more stringent requirements.

The impact was felt almost immediately. Production spending dropped from $316 million in 2014 to $127 million in 2015. That figure was down to $50 million in 2017 and will probably be even lower this year. Meanwhile, Georgia has become the top state in America for film production with incentives in line with what North Carolina used to offer.

In recent years, the budget for North Carolina’s grant program has increased somewhat and is $31 million for the fiscal year 2018-19. In 2016, grants went to “Three Billboards” as well as a now-canceled FOX TV series called “Shots Fired” and a TV remake of the movie “Dirty Dancing.”

Sen. Jim Davis, a Republican from Franklin whose district includes “Three Billboards” film sites, looks at film grants as “just another economic-development tool.”

“I am in favor of them so long as they’re not a net negative,” said Davis. “If it’s a net positive, income to outgo, it’s an easier sell for me.”

On the other side is the John Locke Foundation, a conservative group that generally opposes all incentives and calls film incentives “Good Old-Fashioned Corporate Welfare.”

“The argument was that this was a burgeoning industry and incentives were supposed to help it grow,” said Locke senior political analyst Mitch Kokai. “But as soon as that spigot turned off, production moved away. It’s not a sustainable industry that lasts once the incentives go away. The only way to keep them coming back is to keep the incentives flowing.”

One Tree Hill Pilot
The TV series “One Tree Hill,” starring Chad Michael Murray and James Lafferty, was filmed in Wilmington for nine seasons, making it the longest-running TV series filmed in the state. The TV show generated millions of dollars for the region and continues to do so with fan conventions. Fred Norris The WB

Ongoing obstacles

While no big film projects in North Carolina are confirmed, Gaster of the North Carolina Film Office said negotiations are in progress and they’re “quite close” on a few films. But he also cautioned that the state’s current grant program has built-in limitations.

“I hope people will understand we won’t catch back up with the cap we have now,” said Gaster. “At $31 million a year, we might get (production spending) back to $150 million – that would be a really good year. We won’t get back to the $300s with the program we currently have.”

UNC-Chapel Hill alumnus Peyton Reed, director of the big-budget Marvel film “Ant-Man,” had wanted to make his latest movies in his native state, including this summer’s “Ant-Man and the Wasp” sequel. Instead, he wound up in Georgia, where Atlanta has become the new Wilmington.

“It’s a bummer,” Reed told The News & Observer in 2015 when his first “Ant-Man” movie was released. “There’s this notion that movies are only temporary and make no permanent contribution to the state infrastructure, but the benefits are there. I’ve had a long-held desire to make a movie in North Carolina, and that’s tougher now. It’s millions of dollars, and that matters.”

Production crews and movie stars aren’t the only ones who come to North Carolina because of movies. In Western North Carolina, various guides direct visitors to “Three Billboards” filming locations, and there’s a “Three Billboards” tour around Sylva.

Then there’s “The Fugitive,” which was made in Jackson County in 1993. Tourists still show up because of it.

“At least a couple times a month,” said Breedlove, “I still hear from people wanting to know if the wrecked train cars are still there. People still visit Dillsboro to see that.”

Even though Wilmington’s film industry has declined dramatically, the city still has the “Hollywood Location Walk.” People take it wanting to see locations for Wilmington-made shows and movies like “One Tree Hill,” “The Crow,” “The Legend of Sleepy Hollow” – even “Matlock,” a show that hasn’t been in production since 1995.

“Who ever thought we’d still be making money from ‘Matlock’ after all these years?” said John Hirchak, who runs Wilmington’s Hollywood tour. “It’s a concrete return, a residual that lasts a long, long time. But every year it slips a little because there’s not much film industry left in North Carolina. It’s insulting and insane that we’ve lost all this business to Georgia.”

Hollywood Location Walk
Mike Hartle, who calls himself Spiel Stevenberg. gestures to the Cape Fear River while on the steps of the Alton Lennon Federal Building in Wilmington, N.C. July 26, 2016. He was leading a group of film buffs on the Hollywood Location Walk, pointing out various areas where movies and television shows have been filmed in the riverside town. Chuck Liddy cliddy@newsobserver.com

David Menconi: 919-829-4759, @NCDavidMenconi

Film and television spending in North Carolina

The North Carolina Film Office reports film and TV projects have spent the following:

2012: $377 million

2013: $254 million

2014: $316 million

2015: $127 million

2016: $140 million

2017: $50 million

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