Is the Hope Valley Movie Studio Dead? Let’s Hope So…

It looks like the movie studio may indeed be dead, or at least in the middle of it’s death throws.  The Rhode Island legislature has proposed capping the maximum allowable credit for movie productions in the state to $15 million.  For most productions, this is probably acceptable.  The movie studio is a substantially larger operation however, and is very upset by this fact.  They want a 20% tax credit.  Ok, lets do the math: 20% of $75 million (the projected cost of the studio) is what? $15 million! So why are they so upset?  Your guess is as good as mine but I have a feeling that something fishy is going on here and the legislature just called their bluff. Why does it matter if they get a flat $15 million or 20% of $75 million.  Isn’t that 6 of one, half dozen of the other?  I guess not…

Do you know what a tax credit is?  It amounts to a legal way of bribing someone to come to your state.  But it’s much worse than a tax break.  I can understand giving out a tax break here and there.  But a tax credit is resold by the company to make more money.  It’s not a “credit”, it’s more like actual cash.   It will actually increase the state budget by whatever amount is given.  It is not lost revenue for Little Rhody, it is more DEBT!

Some other unresolved issues surrounding the move studio:

1.     Originally they claimed it would employ 550 people.  Then the number jumped to 2,200.  Now Kennedy is saying “over 1000″?

2.     Originally they claimed they had gotten the rights to buy all the property surrounding the facility.  This turned out to be patently untrue, it looks  like only a handful of homeowners have agreed to sell, if necessary.  This all came out at a public meeting the company had with the local community.  It was rather embarrassing to watch them wiggle and fidget around the issue.

3.     The guy running this operation, Hal Katersky, has had considerable legal troubles in the past on similar operations, amounting to alleged  fraud.  See the following link: 

www.nlpc.org/view.asp?action=viewArticle&aid=2035  and this one: www.thecitizen.info/2007/04/abq_studios_own.html

4.     Oh wait, he tried the same thing in Philadelphia last year.  When he fails here, he’ll probably be moving on to Portland or Nashua.  See these links: 

www.bizjournals.com/philadelphia/stories/2007/08/06/daily16.html www.bizjournals.com/philadelphia/stories/2007/08/20/story2.html

5.     And it appears that Katersky engaged in alleged fraud in the state of Oklahoma, to such a degree that his partner is serving jail time and he has been forbidden from ever selling unregistered securities in the state of Oklahoma.  

See this link:  www.thecitizen.info/2007/04/albuquerque_stu.html

6.     Let no one miss the fact that the same site indicates he was named in over 30 lawsuits since the 1980’s in Los Angeles alone.  Oh, and he filed for bankruptcy in 1997.  Have you ever filed for bankruptcy?  I hear it’s not the best way to build a reputation for success…

Now, I can understand that being sued and losing money is sometimes the cost of buisness.  But Hal Katersky’s record should give us all pause.  Doesn’t this seem a bit fishy?  Doesn’t the Town Council find this a bit bizarre?  Why have Kennedy and Cordone publicly supported a man who appears to have had far more failures and legal troubles than successes? 

Neighbors, this is bad.  This will not turn out well for us and likely not for Hal Katersky, given his previously well documented track record.  Now Kennedy is all upset about the fact that,

“there’s not another project out there that would bring forth over 1,000 new jobs to the state of Rhode Island.” (Westerly Sun)

But wait, wasn’t that 2,200 jobs?

And here is some more food for thought, from local Westerly citizen George Markham.  He states in a Sun Letter to the Editor:  

“I find curious the proposed plan for a 200-room hotel. Film crews and actors are frequently paid a per diem stipend for room and board when filming on location. Could these hotel rooms be used for out-of-state union employees? The Rhode Island Film and Television Office is the agency that assists film production companies with coordinating activities when shooting in Rhode Island. Their Web site has a link to the film and television unions who are qualified to provide labor to production com panies filming in the Ocean State. Out of nine unions listed, none list a 401 area code; they are all out-of state.”

Yes, Mr. Markham, curious indeed.

So, does anyone else find this whole thing a little fishy?  Or is it just me?  I think we are being sold a bill of goods that isn’t worth the paper it’s printed on.  Perhaps our elected officials should pay more attention to the facts and less attention to whether or not Jennifer Anniston or Brad Pitt will be stopping in for a visit.  

If you want to see how this story turns out, rent a copy of Robert Preston in “The Music Man” or go buy a copy of the Simpson’s Season 4, you are looking for the episode entitled, “Marge vs. The Monorail”.  In either case, things won’t end as well for us as they did for Springfield or River City (and not even a giant donut will save us).

-Your Neighbor, Ishmael