Monday, May 2, 2011

That’s entertainment by By Jeff Roedel

Sherri McConnell helped the state film program overcome the scandal of her predecessor Mark Smith pleading guilty to taking bribes.

In the three years since an investigation into her predecessor’s malfeasance dragged her staff in front of a grand jury to explain the state’s tax credit program, Louisiana Entertainment Executive Director Sherri McConnell has turned the office into a dependable and well-respected generator for hundreds of millions of dollars in direct investment in the state from multiple creative industries.
McConnell is working to mature Louisiana Entertainment into a globally-respected brand like Campbell’s Soup or Coca-Cola, assembling easily recognizable products—the results of companies using Louisiana Economic Development’s progressive incentive programs to produce film, music, digital interactive and live performance projects within the state. If she has her way, soon every CD, video game box, theatre playbill and movie-credits sequence for projects made using the state’s tax credits system will bear the Louisiana Entertainment logo for all to see.
It’s an ambitious push—and one that requires significant investment from the state—but McConnell’s office is gaining cheerleaders from the private sector who continue to bring repeat business to Louisiana.
Last fall, one studio executive behind Sylvester Stallone’s new action flick The Expendables raved about the advantages of shooting here. “I think this is our thirteenth film in the state,” Diego Martinez of Nu Image/Millennium films told Variety. “The cooperation you get here is always incredible, and the Louisiana Film Office is really there for you. The incentives don’t hurt either.”

Mark Smith

A long talk and a cigar

It was June 1, 2007, when McConnell and her staff—Chris Stelly, Amber Havens and Alex Schott—sat together with former Film Commission head Mark Smith and then-LED Secretary Michael Olivier inside a waiting room of the Hale Boggs Federal Building on Poydras Street in New Orleans. Unlike Smith, McConnell wasn’t on the hook. She was there to provide answers. A federal grand jury wanted details of the inner workings of LED’s film incentives program.
At one point, Olivier looked at each one of them and uttered the words McConnell had been dreading: “We have to shut this program down.”
When she returned to Baton Rouge, McConnell learned that while they were answering questions in front of the grand jury, the FBI raided the New Orleans offices of LIFT, a powerful production company that was doing roughly 30% of the film business in Louisiana.
The incentives legislation Louisiana pioneered in 2002 was just five years old, but with the FBI cracking down on Smith’s relationship with LIFT, it would be a fight for the current staff to keep it.
Days later, McConnell invited Olivier to her Baton Rouge Garden District home. They sat on her back porch for hours. He listened and puffed a cigar as she gave him the talking points. It was there, looking out at McConnell’s quaint, beloved flower garden, that the Louisiana film industry was saved. Olivier agreed that under McConnell’s leadership, the state Entertainment Office could not only continue, but thrive.
After the FBI raids, Smith was charged with misappropriating state tax credits. In 2009, Smith would be sentenced to two years in prison and ordered to pay a $67,500 fine for accepting bribes from New Orleans attorney Malcolm Petal, the founder of LIFT, who received undue tax credits through Smith in exchange for the bribes. Petal was sentenced to five years and ordered to pay $1.35 million in restitution.
Last summer, before he was to report to prison, Smith walked into the Entertainment Office that had soldiered on through the firestorm he created. It was the first time McConnell had spoken to Smith since the investigation began. He got choked up.
“I can’t condone what he did—clearly it was a terrible thing—but I also think he feels that way too,” says McConnell, 53. “I think he’s a good guy who did a bad thing. And it made it really hard to do our job, too, for a while there. But you know, it was almost a relief in the industry when all that came down. It was like, ‘Okay this is done. The rumors can stop, and we don’t have to talk about it anymore. We can carry on.’ It was a new day.”

The red-headed stepchild

Patrick Mulhearn has overseen a business boom at Celtic Media Centre and Raleigh Studios since becoming director of operations at the expansive film facility off Airline Highway in 2009. He began his career in movie production in 2006 as the business development officer for the state film office just six months before Olivier hired McConnell. Smith had left the film office for the private sector. Without a director, the office was something of a rudderless ship.
“(We were) like the red-headed stepchild of state government,” says Mulhearn. “We were all squeezed into the music director’s office. Then we were moved to an old library storage space with all this junk furniture. It took us six weeks before we got Internet and phone service connected. Nothing was taken seriously.”
At the South by Southwest Music, Film and Interactive Conference in Austin this year, McConnell’s team hosted an industry reception, and debuted her department’s overhauled Web site.
Chris Stelly, now director of film for the state, says the office was not a top priority for LED simply because of the nature of the industry.
“We were growing fast, and a new growth industry, so I think there was a lack of understanding about what we were doing,” Stelly says. “Part of our mission is to convince people that this is really economic development, not just movie stars and photo ops.”
What’s worse, the office was being inundated with applications for tax credits from illegitimate enterprises and even real estate developers looking to use the film incentives to help fund non-film-related structures. When these applications were declined, many turned into resource-sucking lawsuits against the state. As recently as last year, McConnell expressed frustration about the amount of energy and focus her office had to spend discrediting a pile of bogus applications.
“There were so many people looking for loopholes where loopholes simply did not exist,” says Amy Ferguson, a New Orleans-based communications specialist who does public relations work for LED. “Thankfully, that’s all in the past.”

Sherri Mac

“That was some brave woman—just going for it,” McConnell says, recalling a photo taken of her mother in the middle of the Saudi desert in 1955. McConnell’s father was an engineer for a multinational firm, so she spent her youth living wherever he was building a factory or plant: Lebanon, Egypt, Pakistan, Canada. At 15, McConnell attended boarding school at Herringswell Manor in Bury St. Edmunds, Suffolk, England. At 16, she transferred to Western High School in Las Vegas. “Yes, that was a culture shock,” she says. “Going from owning my business to working in government was another.”
In 2002, while running a successful government relations firm in Baton Rouge, McConnell took interest in Louisiana’s first film incentives bill. She followed it through the legislative session that year, until it became law. In 2005, when the Legislature passed a similar program for sound recording, McConnell began doing pro bono work for the state’s entertainment industry. “My guts told me this was an industry that could grow,” she says.
After she met Mark Smith and offered to pitch in, he invited her to a locations trade show in Los Angeles. “The Louisiana booth was not impressive, to say the least, but everybody at that show was headed towards it,” McConnell says. “All the questions there were about our program. We were the rage.”

McConnell meeting with her film and television director, Chris Stelly.

Back in Baton Rouge, McConnell assisted music producer Johnny Palazzotto’s launch of the Baton Rouge Blues Foundation and worked as a consultant for Celtic Media Centre, representing its interests to the state while the group’s soundstages and offices were in early planning and construction phases. Unlike some lobbyists, she managed to make few enemies. Everyone seemed to like “Sherri Mac.” Through Celtic, McConnell met LED Secretary Michael Olivier. During lunch at the Little Village in fall 2006, Olivier asked McConnell to lead his Entertainment Office.
“We needed credibility and common sense,” says Olivier, who now works as CEO of the Committee of 100 Louisiana. “From the business side to the legislators, Sherri knew all the players and knew who was legitimate and who wasn’t. She understood not only the elements, but most importantly the intent of the incentives program.”
McConnell arrived for duty in February 2007. There she found details on certain projects were scant. Other files were nonexistent. Though no one had explicitly stated it, she had been branded a fixer. “We were immediately taken more seriously,” Mulhearn says. “Sherri saw problems and knew how to work the higher-ups.”
Two months later, the legislature passed 25% incentives packages for the live performance and digital interactive sectors.
McConnell’s greatest victory came in 2009 when budget crises and recession fears abounded, yet the state legislature granted her motion picture incentives program permanent status and upped the tax credit from 25% to 30% on in-state expenditures with a 35% payroll credit available for all Louisiana hires—a powerful nudge for Hollywood to use local crews.
“It’s amazing we increased the incentives when we did, and Sherri deserves a lot of the credit for that,” Mulhearn says. “Had she not been there, the whole thing might have blown over.”
Michael Arata, a film producer and attorney who serves as chairman of the entertainment arm of the Louisiana State Bar Association, says it was a hard-fought victory for the Entertainment Office, one that could not have been possible without McConnell’s legislative acumen.
“She knows the legislative process, and the state’s legislators trust her,” Arata says.
Building trust in other ways, McConnell brought clarity and transparency to the office through tighter rules for each sector’s incentives program. She then convinced Olivier to grant her directors’ positions unclassified status, giving her the budgetary elbow-room to make the key hires she needed to effectively grow her staff. In 2009 she hired Elliott Adams away from Portland-based CD Baby and Philip Mann—a veteran stage producer with years of Broadway’s business side to his credit—to run the digital interactive and live performance programs, respectively.
With McConnell taking the lead, the entertainment office staff began working as a single unit for the first time. “It became anesprit de corps where everyone gave input—a real team effort,” Stelly says. “Sherri brought her experience from the private sector and reinvigorated the office.”
“If we can only get industry people down here, they’ll come back,” McConnell says.

Under my umbrella

The synergy created by collecting the state’s incentive programs for film, music, interactive and live under the banner of Louisiana Entertainment had lasting effects both internally and externally for McConnell’s office. Until then, each sector had been kept, in McConnell’s words, to its own “silo.”
“No one else had her kind of vision,” Olivier says.
Now, thanks to new infrastructure projects attracted by sound recording incentives, movie studios can more easily use Louisiana’s music incentives program, administered by longtime music director Lynwood Ourso, to record soundtracks for films at another 25% discount. Convergence like this is the industry buzzword, McConnell says. One video game company is looking to produce a Wii game in Louisiana based on Broadway dance numbers in Louisiana. Another wants to score live music for its game titles.
With states like Georgia and Michigan starting to chase Louisiana’s heels for movie productions, in 2008 Louisiana still received more applications than anyone but California and Texas. So McConnell began using the fees her office collects from those applications to pay for promotion and marketing efforts so she could continue outpacing the competition.
That fund has contributed to the office’s two critically acclaimed pre-Grammy Awards events in Los Angeles in 2009 and 2010. Both were equal parts raucous concert and Mardi Gras party, where all of Louisiana’s food, culture, celebrities and entertainment opportunities were on glorious display. Last March, Louisiana Entertainment sponsored receptions and exhibits at South By Southwest Music, Film and Interactive Conference in Austin.
There, McConnell and her team debuted an overhauled website, new logos and a series of temporary tattoos with clever slogans like “Shoot Dat!” and “Sheauxtime!”—all part of an energetic rebranding effort McConnell conceived and outsourced to TILT, a cutting-edge Baton Rouge design firm.“Our challenge was to show the world that Louisiana supports the entertainment community—not only with tax credits and incentives but through our wealth of homegrown talent,” says Scott Hodgin, co-owner of TILT. “The look took on a feeling of handmade and authentic. Whether we spray-painted the logo on a beaten-up wooden background on the website, or developed custom, hand-drawn temporary tattoos for their debut at South By Southwest, we wanted everything to have an authentic feel.”
Louisiana Entertainment’s new branding effort includes attention-grabbing ideas like these temporary tattoos custom-made by Baton Rouge design firm TILT.

It is working.

Through June, Louisiana Entertainment had received more than 80 applications for film projects.
While rebranding helps lure outside producers, projects like HBO’s immediate-hit Treme and blockbuster-sized films like Battle: Los Angeles and Green Lantern, both McConnell and Stelly understand the importance of fostering the state’s indigenous film industry. “Otherwise, what’s left if the tax incentives are ever taken away?” McConnell asks.
More local film companies with projects ranging from $300,000 to a few million are benefiting from the incentives and finding a niche.
“The state film office turns things around fast, always gets back to you, and they answer questions,” says Daniel Lewis, a Baton Rouge native and COO of Active Entertainment in Lafayette. “They spend time nurturing smaller companies like ours, and that says a lot about Sherri and Chris’ leadership. They bring the same level of excitement and work ethic to the small-budget productions as they do to the big-budget movies.”

Billion dollar baby

In June the Entertainment Office released a new strategic plan. In the fourth paragraph of the 29-page document, McConnell clearly states her goal: “Bring in $1 billion of direct economic impact to a state whose homegrown professionals, artists and musicians can remain and build creative careers that flourish.” Having hauled in $1.9 billion in investment based on the state’s $700 million dollars in tax credits since 2002, $1 billion annually is a big number but not an inconceivable mark, says McConnell. With state budget cuts common and the looming economic impact of the BP oil leak unknown, however, the Entertainment Office may have to try to get there without significant increases in funding or staffing.
A year after Louisiana passed its landmark film incentives program, Bill Richardson, the newly elected governor of New Mexico, launched his own efforts to draw productions away from nearby California. New Mexico’s state film office now maintains a dozen full-time employees—more than twice that of Louisiana—yet still falls behind our state in total annual productions. “Sherri’s office is clearly running circles around New Mexico,” Lewis says. “It’s amazing the amount of work that gets done in that office with such a small staff.”
McConnell recognizes Louisiana cannot compete with powerhouses California and New York for crew base or infrastructure, but says that need not stop the state from chipping away at their lead.
“It’s just about recognizing the need to do it,” McConnell says. “If we can only get industry people down here, they’ll come back. The creativity and culture in our state sells itself.” Anyone who followed the Saints charge to Super Bowl victory or has taken notice of Make It Right’s progress in the Ninth Ward knows Brad Pitt and Angelina Jolie have made New Orleans their adoptive home long after The Curious Case of Benjamin Button wrapped in 2007. Earlier this year, Scarlett Johansson and husband Ryan Reynolds purchased a home near Lafayette and Dockside Studios, where Johansson recorded her debut album Anywhere I Lay My Head.
With Hollywood superstars not only shooting movies and riding in parades here, but buying homes, too, and Louisiana Entertainment closing in on a half-billion dollars of investment annually—a figure Pixel Magic in Lafayette and Blade Studios in Shreveport should boost in 2011—McConnell’s job has become less about putting out fires and more about staking a claim of permanence for entertainment as an industry. That claim seemed so perilously unlikely three years ago as her staff waited to appear before a grand jury. “We came this close,” McConnell says, her thumb and index finger only centimeters apart.
McConnell’s battle is no longer one for respect but for patience—patience among LED officials and private investors to stay engaged in her growing industries before her office makes a statement no one will be able to ignore: $1 billion every single year.
“I’m probably the most impatient of the bunch, so (patience) is an internal struggle for me,” McConnell says. “We’ve come a long way in three years, but I’m not satisfied.”
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