CNBC Metro 20

Move over, Hollywood. Atlanta is becoming a major film mecca

Dressed in heavy winter clothes, Jennifer Aniston, Jason Bateman, Kate McKinnon and Oliva Munn are sitting inside a family van on a snowy city street at night. They're filming a scene for "Office Christmas Party," due out in early December. The film, which is about an epic holiday bash after the CEO (Aniston) tries to close the branch, is set in Chicago in December, but the production is a world away, both from a geographical and calendrical sense. Filming is actually taking place in the heart of Atlanta in the middle of summer.

"We chose Atlanta because they have a terrific crew base and multiple sound stage options to accommodate the size of our office set," said producer Scott Stuber. "Overall, it's a great place to work."

Jennifer Aniston, Jason Bateman, Olivia Munn and T. J. Miller in "Office Christmas Party," a film made in Atlanta that debuts in December.
Source: Paramount Pictures
Jennifer Aniston, Jason Bateman, Olivia Munn and T. J. Miller in "Office Christmas Party," a film made in Atlanta that debuts in December.

"Office Christmas Party" was just one of 245 films and TV shows shot this past fiscal year (July 1, 2015–June 30, 2016) in Georgia, which includes hit series like "The Walking Dead" on AMC, "The Vampire Diaries" on The CW, and Netflix's "Stranger Things." Blockbuster movies shot in the state include three of the four "Hunger Games," "The Blind Side," "Ant Man" and "Captain America: Civil War."

"Georgia has the backdrop to play a lot of places, and that's one of its draws," said Lee Thomas, deputy director of the Georgia Film Commission, which was started in 1973 by then-Gov. Jimmy Carter because of the economic impact of "Deliverance" on the poor, northeast part of the state. "We have diverse locations, a good tax incentive, temperate climate so people can shoot all year, the world's busiest airport and just lots of sound stages and crew. It's gone crazy over the last few years."

According to the Motion Picture Association of America, the Georgia film industry currently ranks third in the nation behind California and New York, with nearly 3,000 motion-picture and television industry businesses, including 1,957 production-related companies. With a direct spend of $2.02 billion, the economic impact was more than $7 billion in FY16 — up from $244 million just nine years ago.

"Where it really helps is jobs," added Thomas, a native Atlantan. "There are about 25,000 Georgians who are in the film and television production business and another 30,000 who are indirectly related."

Some of the workers are moving here from slower markets, while the Georgia Film Academy, which just opened a 15,860-sq.-ft. sound stage at Pinewood Atlanta Studios for hands-on experience, and the university and community college systems, as well as SCAD (Savannah College of Art & Design), will help fill the 3,000–5,000 film industry jobs forecast to open in the state by 2021.

Multihyphenate Tyler Perry, the most successful African-American filmmaker in history, is responsible for about 400 of those jobs at his Atlanta-based production company, but he's hoping to create employment 10 times that in the coming years. "Filming is booming here," he said. "It is amazing the amount of movies that are being shot here, and I'm just super-excited about it on so many levels."

New sound stages are popping up faster than craft-beer bars. Currently, there are 45 sound stages offering more than 2 million square feet of space and growing (although some are just converted warehouses and don't have the best sound quality). Last year Perry, purchased the former Fort McPherson army base, which he's converting into one of the largest studios in the country. When completed next year, the 330 bucolic acres will house a couple of different backlots and 14 state-of-the-art sound stages, the largest being 60,000 sq. ft. and containing a huge water tank.

Tyler Perry directing Kathy Bates at his Atlanta-based film studio
Courtesy of TPS
Tyler Perry directing Kathy Bates at his Atlanta-based film studio

"The state is so easy for people to get to with the airport that we have here," said Perry, whose newest film, "Tyler Perry's Boo! A Madea Halloween," opened on Oct. 21. "But for me, I love being in a place where there are more trees than people. I love having space and I love that you can come to Georgia and you can live so well here for what it would cost you so much more in a lot of other states, like California."

Perry was one of the first to take advantage of the state's generous tax incentive, which began in 2005. According to figures obtained from the Georgia Department of Revenue, the total average cost of the program between 2012–2014 was about $258 million per year, with a major increase last year. Preliminary numbers for 2015 show that producers earned at least $438 million in tax credits.

Film Production Capital ranks Georgia as one of only two "five-star states" in the nation (the other being Kentucky) to offer such a substantial inducement where production companies received a 30 percent tax credit on qualified money spent (anything directly related to the production, even stars' salaries), which they then sell for about 90 cents on the dollar to businesses in the state with a tax liability. In other words, for every million dollars spent, film companies get back about $270,000, or the full $300,000 if they're based in Georgia, like Perry.

"What makes Georgia and Kentucky unique is that there is no cap [on the money spent or the rebate], and more expenditures qualify," said John Bails, the executive vice president of Film Production Capital, which brokers film-industry tax credits. "New York, for instance, doesn't reimburse for any 'above the line' costs, like star salaries. The incentive also has good political momentum in Georgia. All the corporations based there love it because they're getting a 10 percent discount on their taxes because of the film industry, so it's very popular."

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That's good news for filmmakers who like to be able to count on the rebate when planning productions a year or two out. While Bails thinks the incentive is 100 percent responsible for the growth of filmmaking in Georgia, Thomas of the Film Commission thinks it's the whole package.

"Sure, we have a competitive incentive," she said, "but it's also the ease of access with Hartsfield-Jackson, the variety of looks from cities to the coastline to the mountains — we can accommodate a lot of scripts — all the crew and infrastructure. We can house these big shows. And people enjoy being here. It's a good quality of life."

With the forecast for continued growth ahead, The Peach State is becoming the pick of Hollywood more and more.

— By Tom Cunneff, special to CNBC.com