Netflix announced that its drama series Bloodline will be renewed for a third season, and will continue to film in the Florida Keys, despite the loss of the state’s film tax credit incentive program. The history of the program through the past few years is an excellent illustration of the competing forces in the debate over taxpayer incentives for films and other creative projects.

According to the Tampa Bay Times, Florida’s film incentive program was originally funded with $296 million in 2010. The intention was for the funds to last through this year, but every dollar was spent by 2012. After a contentious debate during the most recent legislative session, the program was not renewed and expired on July 1 pursuant to a statutory sunset provision.

Supporters and opponents of the incentive program not only didn’t agree on the necessity of the program; they didn’t even agree on the numbers. As the Times reported:

Those working in the industry point to a Florida Office of Film and Entertainment report that states the $296 million added $4.1 billion to Florida’s gross state product — a 15 to 1 return — and created more than 170,000 jobs that paid over $900 million in wages.

 

But opponents of using public funds as incentives for the industry quote a study conducted by the Florida Legislature’s Office of Economic and Demographic Research showing the state receives just 43 cents back per dollar it awards in tax incentives to productions.

 

That amounts to a loss of almost $170 million on the $296 million in incentives.

 

That study is accurate but misunderstood, say proponents of the film industry, as it only reflects how much money in tax receipts the government gets back rather than the full economic impact.

Beyond the debate about which study is more accurate, a program that gives several hundred million dollars to the film industry was a tough sell for a Legislature under a constitutional requirement to balance the budget, and efforts to renew the incentive program failed.

Still, it can be frustrating for proud Floridians to see movie and television scenes that are supposed to be set in the Sunshine State being filmed in other states.

Back in March, the Sarasota Herald-Tribune described the increasing frequency of these “Faux Florida” scenes, such as when another Netflix program, House of Cards, showed character Remy Danton visiting his parents in Florida. However, the production crew never left Maryland: palm trees were part of the set design for Danton’s parents home, and Florida license plates were put on a car in the driveway.

Neighboring Georgia has especially benefited from Florida’s frugality when it comes to film incentives. The Georgia Entertainment Industry Investment Act provides qualifying projects that film in Georgia up to a 30 percent base transferable tax credit, broad definitions for what kind of spending qualifies, no limits or caps, and no sunset clause, among other incentives.

According to The Hollywood Reporter Georgia’s film incentives made it cheaper for Live by Night, an upcoming Ben Affleck movie set in Ybor City, to build an Ybor City replica in Georgia than to actually film in the historic Tampa neighborhood.

Before Florida’s film incentive program expired, Bloodline and HBO’s Ballers, a football comedy set in Miami starring Dwayne “The Rock” Johnson, had snapped up the last remaining dollars, but that was only enough to film the first two seasons of both shows.

Netflix and HBO both lobbied the Florida Legislature hard for the film incentive program, arguing that the continued existence of their programs were at risk. Bloodline script supervisor Kathryn Waters posted an open letter on Facebook, claiming that without the incentives, “it is doubtful that Bloodline will have a Season 3,” and inviting residents and businesses in the Keys who had benefited from the program filming there to email in their stories.

When the Legislature declined to renew the incentives, HBO released a statement saying that they were “obviously disappointed” and would be “assessing its impact on any future productions like Ballers, who have established Florida as their home.”

In the end, however, HBO decided to renew Ballers for a third season, making the announcement just a few days ago. Their official statement notably did not promise they would continue to film in Florida. But as Deadline noted, the show has been a huge success for HBO, drawing monster ratings that have been sustained so far (the second season just began airing last month):

The Season 2 premiere episode has amassed 5.7 million viewers to date, with only preliminary data available. Fueled by Johnson’s star power and social media reach, the Season 1 debut drew eye-popping snared 8.9 million viewers across HBO’s platforms, making it the premium pay cabler’s most-watched first episode of a half-hour series since 2009. That prompted another early renewal a couple of weeks into the show’s freshman run. Ballers’ first season went on to average 9.1 million viewers in gross audience – HBO’s biggest half-hour in six years.

That’s the kind of success that creates its own incentives for HBO to not mess with the program, under the well-known “if it ain’t broke, don’t fix it” theory. Ballers frequently has scenes on the beach or along streets that are very obviously South Florida, so moving production would require a lot of adjustments.

Bloodline is arguably even more tied to its Florida location than Ballers. From the beachside inn owned by the Rayburn family who are the heart of the show’s drama, to the thunderstorms rolling in over the water, to the Monroe County Sheriff steering his boat through the mangroves, to the scattered driftwood along the beach in a critical Season 1 scene between two of the Rayburn brothers, it is all-but-impossible to picture the show being filmed anywhere but the Keys.

Todd Kessler, one of Bloodline‘s three creators, clearly agrees with this assessment. In an interview with HitFix.com right before the show launched, Kessler described how the Keys have a “kind of an iconic sensibility” that’s well known even among Americans who have never been there, “like New Orleans or Las Vegas or Los Angeles,”

In that same interview, Kessler mentioned that they had considered filming in Georgia, due to the incentives and infrastructure available, but in the end decided that the Keys were irreplaceable as a location:

But we looked at several places and realized there is no place quite like the Keys and the color of the water and being outside and it really feeling like paradise and then having this kind of underbelly of what’s going on underneath it. So we even, at some point, looked to do some exterior shots in the Keys but mostly shoot it in Georgia. But the water looks completely different. So it felt like, “Well we can’t double it and make our lives easier so let’s just take off a big bite of ambition and set it down there.”

After two seasons filming in the Keys, Netflix had to agree. Content chief Ted Sarandos echoed Kessler’s description of the Keys as an “iconic location” that was an essential character along with the human actors, comparing it to another Netflix show, Daredevil, that’s set in Hell’s Kitchen.

“We can’t fake it in Canada,” said Sarandos. “So tax credits are a nice offset but if it doesn’t fit the creative, we’re not going to chase it.”

Netflix’s announcement was cheered by taxpayer watchdog groups. Americans for Prosperity-Florida’s state director, Chris Hudson, said in a statement provided to The Capitolist:

States across the country should look to the leadership of the Florida legislature on how to declare that taxpayer dollars do not need to be sacrificed to satisfy the threats of film industry special interests. This legislature stood strong and did not allow taxpayers’ hard-earned dollars to be wasted by not picking one industry as a winner over all others. Bloodline should continue to take advantage of the beautiful scenery, talented workforce, and top tier tax climate our state has to offer.

Bloodline‘s renewal will be good news for many Keys residents and businesses as well. As The Hollywood Reporter noted back in May, Bloodline brought its own tourism boom to the area, as fans taken with the natural beauty they’ve seen on the show trekked south to see for themselves. Local residents have become amateur tour guides to help tourists find filming locations and pub crawls have been structured around the dive bars featured on the show. One store owner said that his sales had increased 52 percent in 2015, and real estate sales have seen a significant bump as well.

The impact from the show has been so remarkable, the Monroe County Tourist Development Council commissioned a study after the conclusion of Season 1 to quantify the benefits from Bloodline filming in the Keys.

The results were staggering: $91.2 million in output and more than 1,000 jobs in the Keys, and $158.7 million and 1,700 jobs statewide. Survey respondents also said watching the show made them more interested in visiting the Keys, leading the Monroe TDC to invest in targeted, pre-roll ads for the show’s second season, which aired earlier this year.

Follow Sarah Rumpf on Twitter: @rumpfshaker.

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