Home ‘Rum Diary’ a shot for PR film industry
Issued : Saturday, October 15, 2011 06:25 PM
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‘Rum Diary’ a shot for PR film industry

By CB Online Staff

The Puerto Rico Film Commission used the world premier of “The Rum Diary” in Los Angeles this week to pitch the island as a move-making hotspot.

Film Commission representatives have been on that mission in Hollywood this week, timing the trip to coincide with the launch of “The Rum Diary,” which stars Johnny Depp and is set in Puerto Rico.

Based on a rum-soaked novel by the late Hunter S. Thompson, Depp plays a New York City journalist who, in the midst of a turning point in his life, decides to accept a job as a freelance journalist in Puerto Rico in the 1950s.

This film was shot entirely in Puerto Rico for about 49 days, generating nearly $20 million in economic activity, 200 direct jobs and more than 6,000 hotel room nights.

Rums of Puerto Rico, meanwhile, is tapping the movie’s launch to highlight the island’s role as a world leader in the production of high-quality rum.

Rums of Puerto Rico and the Film Commission fall under the island government’s Economic Development & Commerce Department umbrella.

The Los Angeles premier was followed by a an after-party at the storied Chateau Marmont hotel in Los Angeles, which was attended by Depp and fellow cast members Aaron Eckhard, Amber Heard, Giovanni Ribisi, Michael Rispoli, Bill Smithrovich and Amaury Nolasco.

Depp, who brought his wife and children to Puerto Rico during filming, had high praise for the island.

“I spent very little time in San Juan prior to this film,” Depp told Entertainment Tonight. “There’s a real celebration of life there. The people are incredibly warm and very welcoming.”

The Film Commission’s trip to the heart of the moviemaking world included meetings with representatives of various projects that are considering Puerto Rico as a filming location to highlight the island’s film industry incentives law and other advantages of bringing productions here.

The mission has already paid off with a pledged by the Disney Channel to shoot a nearly $11 million production on the island. The movie, the Disney Channel’s fifth in Puerto Rico, is set to begin filming in February.

Since 1999, more than 60 productions have taken advantage of incentive programs in Puerto Rico for film and creative services, including most recently “Pirates of the Caribbean 4” (Disney), “Fast Five” (Universal Pictures), “The Losers” (Warner Brothers), “Off the Map” (ABC), “Royal Pains” (USA Networks) and “Eastbound and Down” (HBO Films).

Puerto Rico’s film industry has been drawing buzz in recent years, a trend that has only picked up since the island government’s new film incentives package was enacted this spring.

Recent features in Variety and a separate story in the Los Angeles Times both tout the new incentives.

The article in entertainment standard Variety pointed to the island’s ability to stand in for locations around the world, including Iraq, Vietnam, Spain, Brazil, Cuba and various other “far-flung places” as filmmakers increasingly look to the island for its diverse backdrops and talented local crews.

“Now Puerto Rico is hoping to further boost its location appeal with an expanded film law. The change comes at an opportune time given the cutbacks in the film incentive offers of some U.S. states,” Variety reported in its special Cannes edition in May.

The Los Angeles Times story focused on the government’s aim to capitalize on the box-office success of “Fast Five,” long stretches of which were filmed in Puerto Rico posing as Brazil.

Gov. Luis Fortuño signed the new cinema-incentives law in March aimed at taking Puerto Rico’s percolating film industry to the next level.

The new Film Industry Economic Incentives Law improves on the current available incentives to increase the number of film projects produced in Puerto Rico.

The new law expands the definition of eligible projects to include documentaries, film shorts, music videos, video games and the filming of live shows, among others. It also increases the amount of the tax credit to 25 percent from 20 percent for related infrastructure projects, such as recording or transmission studies, subject to a minimum $5 million investment. Studio operators who qualify will get a special tax rate of between 4 percent and 10 percent on earnings, complete exemption on dividends, plus exemptions against municipal and property taxes.

The legislation also creates the concept of “Film Development Zones,” which will provide incentives for the establishment of world-class film-production studios.

The law, which replaces one initially passed in 1999, establishes a system of tax decrees very similar to what the island government offers the industrial and manufacturing sectors.

In 2009, the film industry generated $118 million in economic activity. In 2010, 12 projects were filmed on the island, creating 17,528 jobs and 22,671 hotel nights. A dozen movies, TV series and documentaries shot in Puerto Rico last year pumped another $70 million into the island economy, Puerto Rico Film Commission Executive Director Mariella Pérez Serrano said.

The new law requires film projects to pay the government 1 percent of production costs up to $250,000 that qualify for the incentives. The money deposited in the Film Industry Economic Incentives Fund will go toward managing the law, covering Film Commission expenses and helping spur the local film industry.

Infrastructure incentives include a 25 percent tax credit on the development or expansion costs of studios, labs and facilities. Credits include 40 percent of the production costs as certified by an auditor. The incentives also include a 20 percent tax credit on the costs of hiring nonresident talent.

The tax credits are subject to a $50 million limit, which can be increased upon certain conditions, such as if the project is taking place in a film-development zone or the amount spent by a major studio in a film-development zone exceeds $200 million. For payments to Puerto Rico residents, the annual tax credit cap has been raised to $50 million from the original $15 million.

The film or infrastructure projects also will be given special tax treatment. For instance, a major-studio project, whose budget is $100 million, will pay taxes at a 4 percent rate, while the operator of a regular studio, whose budget for a project is $50 million, will be subject to taxes of 6 percent to 10 percent.

“The 20 percent tax credit for non-Puerto Rican talent [actors] is not a strain on Puerto Rico’s finances, because the talent is subject to income tax for working in Puerto Rico at a flat rate of 20 percent of such compensation, withheld at the source by the employer,” entertainment lawyer Antonio Sifre, a co-author of both old and new film laws, told Variety.

“In turn, actors may take the taxes paid in Puerto Rico as a foreign tax credit on their U.S. tax return,” he said. “Puerto Rico is a foreign tax jurisdiction with respect to the IRS.”

Big-budget Hollywood movies filmed in Puerto Rico recently include “The Rum Diary,” “Men Who Stare at Goats” and “Pirates of the Caribbean: On Stranger Tides,” with Johnny Depp and Penelope Cruz, which shot on the island for three days.

Producer Aaron Eackhart will shoot “The Geography of Hope” in Puerto Rico, with critically acclaimed actor Ed Harris in the lead role in a caper film that takes place mostly in Mexico.

“The local crew, people and incentives added up to a great experience,” Barry Waldman, executive producer of “Pirates of the Caribbean: On Stranger Tides,” told Variety.

“I hope to one day shoot an entire movie in Puerto Rico,” said Waldman, who also shot “Bad Boys II” on the island.

In 2008, “The Men Who Stare at Goats,” starring George Clooney, shot nearly all its scenes (except for those set in the desert) in Puerto Rico, said unit production manager Ellen Gordon, who has worked on the bulk of the high-profile films that have come in.

“People should look at Puerto Rico as more than just an island location,” Jim Holt, of Winchester Film Capital, told Variety.

“The locations, people and bilingual crew are terrific,” said Holt, executive producer of the Iraq-based satire “The Men Who Stare at Goats.”

“We’re still on a learning curve,” location manager Luis Estrella told Variety, noting that some government agencies are not agile enough at issuing shooting permits. Still, “despite some delays, these shows have kept on schedule.”

But Puerto Rico’s tight-knit film community feels that its home hasn’t yet reached its maximum potential as a location venue, Variety reported.

Toward that end, local industry representatives are banding together to form a Film Industry Cluster that will consolidate all the audiovisual entertainment services on the island and work in tandem with the Film Commission, a unit of the Economic Development & Commerce Department.