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North Carolina, aka “Hollywood East,” lost its film incentive in 2014, but not its optimism. That’s according to an exclusive chat with Bill Vassar, executive vice president for EUE/Screen Gems’ Wilmington operation, who says the industry is ready to move forward.

The film industry, which resulted in $268 million in direct in-state spending in the first half of 2014 alone, has had a lucrative reason to shoot in the state. Through Wednesday, Dec. 31, production companies are eligible for a 25 percent credit if they bring their projects to North Carolina, up to $40 million on qualifying expenses.

In 2013, North Carolina gave out more than $61 million in credits under the incentives program.

On Thursday, Jan. 1, the state moves from tax credits to grants. North Carolina can offer grants totaling only $10 million — big savings to the state, but a change that some fear will have productions flocking to neighboring areas, such as Georgia, which provides a 30 percent, no-cap credit.

Vassar, who was in Raleigh frequently to appeal to legislators, says doubters don’t understand the resiliency of the film community.

After all, they’ve seen hard times before in North Carolina.

The rise of Hollywood East

Wilmington folks will tell you it really started in 1984 at Orton Plantation in Brunswick County.

Firestarter, a sci-fi thriller, needed a Southern plantation for its backdrop — the kind not typically gracing Hollywood. Frank Capra Jr. found a photo of the Orton estate in a magazine and, after conversations with then-Gov. Jim Hunt, the film, starring Drew Barrymore and Martin Sheen, was made.

The actors left. Capra left.

But a man by the name of Dino De Laurentiis, brought here by that project, decided to stay, organizing a new production company off North 23rd Street in Wilmington, to be called De Laurentiis Entertainment Group.

Other titles soon followed, movies such as Cat’s Eye and Blue Velvet.

And then, as quickly as it came, it all went away. DEG went bankrupt in 1988 and De Laurentiis left town.

In 1990, Carolco Pictures purchased the studio. But Carolco, which had produced blockbusters like Terminator 2 before flops such as Showgirls, underwent a similar bankruptcy fate.

Some thought that would be the end of North Carolina’s film industry.

But it was just the beginning.

EUE/Screen Gems

In 1996, a new player came to town: EUE/Screen Gems, which acquired the Wilmington studios, renaming it EUE/Screen Gems Studios. Over the years, Dawson’s Creek and One Tree Hill were two of the shows to find a home at Screen Gems.

According to 18-year Screen Gems veteran Vassar, the operation is thriving, adding additional stages and facilities, including on-set Wi-Fi access that Marvel called “the best Internet set up they’d ever worked with” while filming Iron Man, Vassar says.

But it’s been more than a business to Wilmington.

“It’s been an important part of the community,” he says. “It’s the heart of the film and television production industry in North Carolina.”

And, regardless of what the legislature does, Vassar says it will continue to serve as that heart.

“This is a cyclical business,” he says, recalling the early days, when his company first entered the state. “The industry was pronounced dead. Incentives had been put in place in Canada and all the provinces … Businesses were migrating to Toronto and to the northwest provinces, Vancouver. It basically put the nail in the coffin.”

Introduction of incentives

In the early 2000s, however, film execs such as Vassar started doing some migrating of their own — to Raleigh.

“We began to work with the legislature and to explain the importance of films in North Carolina,” he says.

What outsiders might not understand is that the studios themselves aren’t the draw to the state. It’s the workforce, they argued. And that workforce, over the years, had been building.

“People moved here from California to be a part of it,” he says. “People would come here to do productions and they would see what a great place it was.”

It’s kept building, even as discussions to take away the tax credits got louder in Raleigh.

Six families moved after Iron Man introduced them to the state last year, he says.

“In this day and age, the industry is so transient that people know that if they’re good they’ll end up working anywhere,” he says.

EUE/Screen Gems has been building its complex. Today, the studio has 10 stages with 150,000 square-feet of column-free shooting space.

On its website, the studio calls itself a “full-service production facility with 25 percent film incentive.”

But, over the summer, North Carolina eliminated the film incentive. Vassar wasn’t surprised. Legislators have been publicly questioning the incentives for years.

But Vassar says it won’t mean the death of film in North Carolina.

“We have to accept now that any sort of tax incentive for the industry in this state is over and we have to work with the legislature,” he says. “We’re getting encouraging signs from people in Raleigh that they want to work with the industry.”

He’s getting encouraging signs, too, from some high-profile productions. While Homeland and Banshee left Charlotte, the latter citing film incentives specifically, some television shows are staying in the state, such as Sleepy Hollow and Under the Dome, both of which have plans to shoot at Screen Gems in 2015.

“Now is that a strong slate of business? Not necessarily,” Vassar says. “But it’s enough to keep some people working. It surprises me that more people aren’t deciding to pick up stakes and move out of town. But those who are in town, who have been through these cycles before, just aren’t.”

Many are looking for out-of-state work, he says. But they’re staying in North Carolina.

“We’ve been way, way, way worse off than we are now,” he says, pointing to the past decade. “It’s been far worse than what we’re looking at in 2015. There’s enough here right now in Wilmington to keep the industry going.”

And he says conversations about tweaking the grant process will continue into 2015.

“We’re by no means out,” he says.

The industry, he repeats, is cyclic. The battle to continue the incentives is over, he predicts. So now it’s time to work with the legislature and find a way to make North Carolina worth the trek from Hollywood.

His company, however, has a backup plan. In 2010, EUE/Screen Gems signed a 50-year lease with Atlanta for its historic Lakewood Fairgrounds for a studio complex. And, right on its website, the studio advertises that 30 percent tax credit.

By Lauren K. Ohnesorge