Looking to make Virginia a bigger star, a colossal company known for its streaming content wants in on the state’s growing film industry.
Netflix, one of the largest television content creators in the world, is targeting the commonwealth for a potential expansion of its production operations, according to a letter the company sent to state officials in recent months.
Written April 16 and addressed to Gov. Ralph Northam, the letter is signed by Ty Warren, Netflix’s vice president of physical production, and Ted Sarandos, chief content officer.
“We make a large portion of our content in Los Angeles and New York,” the letter states. “However when we do look outside of our core production hubs, Virginia has the potential to be an attractive location with great creative and technical talent.”
Andy Edmunds, director of the Virginia Film Office, said his division is familiar with Netflix’s letter to the governor’s office. He would not comment about any specific dealings involving Netflix but said he recently visited the company’s California headquarters.
“(Netflix) currently has 700 productions underway in 100 countries,” Edmunds said. ‘We want this work in Virginia.”
Several calls and emails to the governor’s office for comment were not returned.
Michael Ivey, spokesman with the Greater Richmond Partnership, which serves as the region’s lead economic development division, would neither confirm nor deny any dealings with Netflix.
Neither Warren nor Sarandos could be reached for comment.
While the letter did not go into specific detail about a timeline for expansion or specific areas of the state the company is eyeing, sources familiar with the early discussions say it is interested in several locations spread between Northern Virginia, Richmond and Hampton Roads, mostly along Interstates 95 and 64.
The Richmond region’s natural scenery and stock of historic buildings has made it attractive for filmmakers and producers through the years.
Aside from onsite filming in parts of the city of Richmond, the region touts two notable production locations for filming: a backlot outdoor studio near the James River off U.S. 521 in Powhatan County and a 220,000-square-foot warehouse off Carolina Avenue near the Richmond Raceway in Henrico County that’s on the market for lease.
Both locations have been used to film several TV shows, including most recently Showtime’s “Homeland” and AMC’s “Turn: Washington’s Spies.”
Netflix also may be considering Fort Monroe in Hampton, and several locations around Fairfax County and Alexandria in Northern Virginia.
Singer, songwriter and actor Pharrell Williams, a Virginia Beach native, is working with Virginia Beach-based Venture Realty Group to establish a film and sound stage production facility that likely will be located in that area, according to a recent Virginian-Pilot article.
Film incentive boost?
Netflix’s Virginia overture comes with a caveat.
Its letter angles for changes to the state’s film tax incentive program, which reimburses eligible productions with a minimum budget of $250,000 for up to 15 percent of all qualifying expenses, including wages. If the production is shot in an economically distressed area of the state, the base amount increases to 20 percent.
The commonwealth’s annual film incentive pool is capped at $6.5 million, Edmunds said.
Netflix argues those numbers need to change.
“The state’s current production tax incentive legislation and lack of infrastructure prevent it from being a viable option,” the company states. “Strong government support for a competitive state production incentive program could entice Netflix to consider shifting production activity to the state on a long-term basis.”
Edmunds said while the current incentive structure is a good template, more must be done to entice, maintain and grow film production in the state.
“A competitive film incentive program is essential to bring the work,” Edmunds said. “In our program, for every dollar we have paid out in incentives, it has returned $11 to Virginia’s economy.”
Warren and Sarandos in their letter used Georgia as a possible guide to overhaul Virginia’s film incentive program.
“As a long-term leaseholder of over 10 sound stages in Atlanta, with four of our large original television series based permanently in the state, Netflix has a robust presence in Georgia because of that incentive and infrastructure,” the company states in its letter.
Georgia, which has emerged as “Hollywood South,” has no limit on film incentives. It shelled out $600 million last year alone for nearly $2 billion in private investment, according to the Georgia Department of Economic Development.
Kentucky also does not cap the annual amount of film incentives it doles out for productions.
North Carolina, another major filming destination, caps its annual film incentives at $30 million a year. Ohio and Pennsylvania yearly pay up to $45 million and $65 million, respectively, in film production incentives.
Any changes to the state’s film incentive program would have to be approved by the General Assembly and signed by the governor.
Terry Stroud, chairman of legislative initiatives for the Virginia Production Alliance, argues a change to the program could be worthwhile for the state economy.
“The state wants to know what their return on investment will be prior to approving these types of incentives, which is important,” Stroud said. “Could we use more money? Yes.”
The Richmond area has had success in attracting large-scale productions under the current incentive system. Those include the HBO series “John Adams,” which also was shot in Colonial Williamsburg about 10 years ago, and “Lincoln,” a Stephen Spielberg movie that was filmed in the city in 2012.
Parts of the city and Central Virginia also will serve as the backdrop for “Harriet,” a Focus Features production chronicling the life of abolitionist Harriet Tubman that’s set to employ hundreds of film technicians and local extras. “Harriet” is set to begin filming in the Richmond area next week.
Edmunds argues a change to the incentive system could bring more.
“The worldwide demand for content is growing exponentially,” he said. “The creation of this content employs skilled technicians and craftsmen and women in high-wage positions. The industry touches all parts of an economy, from buying paper clips to renting helicopters.”
Edmunds said that to secure film productions from firms such as Netflix, the state must make content manufacturing an economic development and tourism priority.
“We already have superior natural assets,” Edmunds said. “We just need a more competitive incentive program.”