Feedback

For economic returns and jobs, TV zooms past the Grand Prix

Comparing the region's booming TV film industry with the Grand Prix.

veep films in Charles Village

Lights, camera, action and JOBS! Crews set up in Charles Village for HBO’s political satire “Veep.”

Photo by: Mark Reutter

Now here’s a plotline:

A downtrodden city gets a reputation as a good low-budget place to film political dramas and several are set there, focusing on the cupidity, foibles and venal schemes of politicians. Soon, though, it becomes clear that the film business yields more jobs and economic benefit than an actual scheme hyped by the city’s real-life leaders.

Another Hollywood fantasy? Not if you place Baltimore in the role of “downtrodden city” and substitute Grand Prix for “scheme.”

Then you have a “ripped from the headlines” narrative.

“This is not a dream,” Mayor Stephanie Rawlings-Blake declared, when she announced the city’s agreement to host a Grand Prix race last September. “This race is a game-changer for Baltimore, and it will change the way the world sees our city.”

Perhaps not in the way she intended.

As her administration last week scrambled to find a new race promoter – in the wake of the spectacular crash and burn of Baltimore Racing Development – the announcement that a third Hollywood TV show would be filmed in Baltimore offered an ironic counterpoint to the motor race debacle.

In a release quoting no less a figure than Gov. Martin O’Malley, the Maryland Film Office estimated that Netflix’s House of Cards miniseries, to be filmed in Baltimore and starring Kevin Spacey, will generate 2,000 jobs and have a $75 million economic impact for the region.

That’s on top of the estimated $55 million in economic impact and more than 1,000 jobs that came from HBO’s political satire Veep, with Julia Louis-Dreyfus, and the made-for-tv movie Game Change, a reenactment of the 2008 presidential election starring Julianne Moore and Ed Harris. Both were filmed in and around Baltimore last year and are scheduled to premier this spring.

The economic returns are based “on the projected budgets of the films and the local spend,” according to Jack Gerbes, director of the film office, plus a 2.1 multiplier effect. The employment figures include high-paying union jobs (teamsters, film technicians, carpenters, makeup artists, gaffers) and individuals hired to supply the broad range of goods and services needed for big-ticket Hollywood productions.

Even accounting for the Hollywood “fudge factor,” these are high numbers.

Unpaid Bills and Taxes

Contrast this to the Grand Prix. Rawlings-Blake last week defended the race by telling WBAL’s 98 Rock with Mickey, Amelia and Speigel that “the city raised almost $50 million in economic activity on a weekend that is usually a pretty dry or slow weekend.”

The Grand Prix attracted big crowds for three days, but did it have much economic staying power? (adamsautoadvice.com)

The Grand Prix attracted big crowds for three days, but did it have much economic staying power? (adamsautoadvice.com)

But her figure – based on a somewhat dubious report commissioned by the city’s tourism bureau – is already out-of-date.

The $46.9 million claimed as total direct and indirect “business volume impact” from the race includes $12 million that BRD has not yet paid to vendors and city and state governments. (The city alone is owed almost $2 million in taxes and fees from the promoters.)

So, at best, the Grand Prix generated about $34.9 million in hotel rooms booked; food and drink consumed by spectators; posters and earplugs sold by vendors, etc.

And even this is too high, according to two academic researchers, because downtown Baltimore does not simply shut down during Labor Day weekends.

UMBC economist Dennis Coates and Michael T. Friedman of the University of Maryland said $10 million would have been spent anyway in hotel bookings, food, drink, etc., if the event were not held.

That would place the economic impact of the race at about $25 million.

But Where Are The Jobs?

It is in the realm of employment where Grand Prix reality has most clearly failed to match Grand Prix hype.

In response to criticism by mayoral challengers last August that her spending priorities were skewed, Rawlings-Blake told radio host Marc Steiner that the Grand Prix “is about jobs and economic development to me.”

Forward Analytics, the Pittsburgh researchers who authored the city’s report, said BRD employed 18 local persons during the race. Few of these people remain employed, and the company is currently without a CEO or chief operating officer.

The researchers calculated that 255 full-time-equivalent jobs “were attributable to the annual Grand Prix.” This, however, is not a hard number, but a conjecture based on the group’s input/output economic impact modeling software.

The research firm, in fact, did not identify any actual jobs created by the three-day Grand Prix. Instead, it speculated that “impacted industries may include hospitality/service, construction, retail, transportation, etc.”

The bottom line is that unless the Grand Prix becomes part of a full-time operation (an institute of advanced auto engineering?) the race will never be more than a generator of temporary jobs – an event where spectators spend money for a few hours or even days and then go home.

Baltimore’s budding Hollywood connection, on the other hand, holds the promise of creating a full-time industry. The local crews who finished up Veep last month are transitioning into House of Cards, which has started pre-production. If Veep is a success, its producers plan to film in Baltimore and Columbia next fall.

Work for 672 Businesses

Filmmaking has some other intrinsic advantages over street racing.

It’s light on infrastructure costs – no spectator stands, heavy guard barriers, tree cutting or expensive road repairs – and it spreads work around to many different employment groups and even sections of the city. (Veep, for example, was filmed in Charles Village, Remington and Mount Vernon, to mimic Washington’s Capitol Hill and Georgetown.)

“This business is very job intensive,” said Gerbes, noting that the final season of David Simon’s The Wire created work for 672 Maryland businesses.

The state attracted the three TV series both because of the attractiveness of Baltimore as a stand-in for Washington and because of tax credits passed by the General Assembly last year. A film production company is now able to receive up to a 25% refund on the direct costs of movie-making, with a total of $7.5 million available among film companies per year.

To prepare for the Grand Prix, the city allocated $7.75 million in road funds for the racecourse, awarding the contract to politically-active paver P. Flanigan & Sons.

Another $1 million was spent by the city for policing, fire protection and other services.

Grand Prix: The Movie

If that sounds like a disaster film, perhaps it needs to be one in a literal sense. How about Hollywood films a movie about the Baltimore Grand Prix, here in Baltimore of course? Imagine the City Hall intrigue! Front office romance! Backroom deals! Car chases! UnderArmour product placement!

Think of all the expenses we could recoup from the filmmakers, all the Jersey barriers and chain link we could bill ‘em for.

Baltimore wouldn’t mind as long as their checks don’t bounce and they don’t cut down any trees.

Baltimore Brew is a moderated site that encourages the free and open exchange of ideas in a climate of mutual respect. We reserve the right - but do not assume any obligation - to delete or withhold the publication of comments that violate our standards. Comments that are obscene, libelous or defamatory, or include vicious personal attacks will not be published. Racist remarks, sexist remarks, disgusting stuff, blatant commercial self-promotion – you get the idea – if it crosses our line, we’re not going to run it.

  • http://twitter.com/DailyBreather Daily Breather

    Yea.  I want my trees back.  This was a good article.  I’d love to film crews over pit crews any day.  

  • westside resident

    This city is insane they go for the big dreamy projects while ignoring the day-to-day services and infrastructure improvements that would lead to long-term sustainable economic development and job creation. I would like to hear the mayor and her team talk more about improving the city for residents and workers rather than spend their limited time and resources touting the latest economic development snake-oil.

  • Jryeyesko

    I think the real take away message is that it is impossible to determine “hard” figures–especially when spinning job creation in an election year. SRB, you need to demand that the City get paid up before trying to sell us on the Grand Prix for 2012, even with new management.

    • http://buzoncrime.com/ Buz

      The old management doesn’t have enough money to pay its bills, apparently–in addition to the fact it’s being sued by several investors and other firms, including a past attorney.  Bankruptcy, perhaps, there.

      Of course, the new management can disclaim any responsibility for the bills owed the city and others, and aver that they are completely different company.

  • Edfitz

    Another great job Mark !  There’s a lot of hard working people in the Maryland Film office who want to make a difference in this State and deserve the attention. 

    Now that the facts are on the table after covering them up for months, just admit your mistakes and move on Madam Mayor.  The next election is 4 years away and you’ll be a better person for doing so.

  • Curtis

    Will the Brew ever take a break from Grand Prix bashing?  Seriously.  This isn’t “film making vs. the Grand Prix.”  They are completely separate from one.  The Grand Prix doesn’t take away from film making, or vice versa.  Why the pissing contest? 

    The Baltimore Orioles and Harborplace also bring in more money than the Grand Prix — big whoop.  The opportunities for comparisson articels are endless. 

    • Baltimoreplaces

      Let the bashing continue.  This was a foreseeable boondoggle.  The point is many investments are better than the Grand Prix, with proven economic returns. I am partial to parks which have shown a top economic return on investment and everybody gets to use them all year long.  Hopefully with this type of coverage city officials will be more thoughtful when considering the new arena.  (my 2 cents)

      • Curtis

        Baltimoreplaces, let me first say that a) I love parks much more than cars b) I love nice street scape and promoting street vibrancy and life.  I think we all agree on that.

        My issue with the criticism of the Grand Prix is that many people are sooooo fare weather on it and have zero patience on this or anything else.  It’s the American way.  The day after the event people were declaring it a failure.  Is every major annual spectacle event hosted by a city a failure?  Of course not!   Like a new restaurant or a new business, almost all start off in the red.

        I don’t know if it will be a success, but neither does anyone on this message board.  To look at it from a long-term investment perspective (dollar out vs. dollar into the City coffer) and NOT from a social security pensioneer perspective, then you realize you that it’s too early to call.  Sure, say you’d rather spend it some way else, but people shouldn’t say or imply that it was a failure, because that shows an ignorance of investment principles.   
           

  • Gerald Neily

    There is a strong contrast with another TV show set in Baltimore that will be airing this Sunday – the NFL playoffs – which will be airing on the world’s leading TV network CBS  instead of the podunk VERSUS cable channel. And it will be loaded with Ravens starpower, attracting A-listers from all over the country.

    Contrast that with the Indycar Grand Prix, which has now lost the only participant above the D-list, Danica Patrick, known mostly for her tacky GoDaddy commercials which will continue to pay the hefty NFL TV freight.

    And speaking of starpower, one week later Baltimore and CBS will host Tim Tebow, football’s most charismatic star since Ray Lewis (hopefully!!!!).

    • GMan

      UMBC economist Dennis Coates was adamantly against the Ravens Stadium when it was proposed, and has a history of anti-sports. Economically probably makes sense in a hard numbers way, but there’s a social impact that’s comes into to play with sports. 

      The major difference between the two, of course, is understanding your economic partners. The NFL was gunning with momentum when the Ravens moved here, found a fanbase starving for football, and in-turn has created over a decades’ worth of positive local and regional investment, as well as moving the Ravens to the top third in value among franchises. Score one for football. 

      The one thing about The Indy Race in never understood was this: Anyone doing any research on IndyCar events understood the weak stakes at play, and the list of failures throughout the country. That the event went off as well as it did for three days, and turned up a net plus, be it weaker then the always overestimated predictions, in taxes, etc. is a minor miracle after looking at the private firm partners. Doubt we’ll see it again this year but enjoyed it while we did. 

      And while I’m glad HBO/Neflix are bringing funds to the state, banking on the movie industry as a steady economic presence leads to a downward spiral in tax credits that, in other economic venues, the Brew tends to disapprove. Failure to apply tax credits, plus the real political beating O’Malley took via his Carcetti character on the Wire, led to the industry shutting down here for an extended time, with studios turning to other states and Canada for tax credit reimbursement. Luckily, economically made political movies are the rage right now. 

  • Anonymous

    One of the Grand Prix auto racers has a fiery accident and after they pull him out of the wreckage, an autopsy shows a single bullet hole in his head, indicating that the accident was no accident but it was a homicide–that may make a Hollywood movie but not a mere documentary on the Grand Prix.  The Grand Prix was an exciting novelty for Baltimore but cities should not lend their roads and execute their trees for a day’s worth of racing madness.  The idea was not a sound money making scheme.  It disrupted the peace of Baltimore communities, it expended more money than it took in and it left the city with payments due from the Grand Prix organizers.  Make a coffin for the Grand Prix and inter it with a prayer it won’t be resurrected in the near future.    

    • kj

      Baltimore isn’t the only city to fall for the “street race festival” scam that the IRL Indycar series has become infamous for.  Hopefully, it will die before they get another opportunity to screw us over.

  • Michael

    Mark continues the shrewd and insightful reporting that he has demonstrated for four decades, but I think he ignores that the Grand Prix brought something more intangible than money to the city — it was a wonderful event that brought tens of thousands of people together to have a great time in the center of Baltimore. You don’t see things like the New Year’s fireworks have to justify themselves economically — but the Grand Prix did also generate considerable income. That it did not live up to the pre-race hype is hardly a surprise. If we went by those standards, we would have not professional sports teams or convention center or all sorts of other projects that use these dubious forecasts.
    There is no doubt that the Grand Prix organizers were in way over their heads. They needed some deep pockets to take care of losses that could be easily anticipated in the first year of such an ambitious event. But, given their problems, they did put on a very successful event. And that fact should bring more support in the form of sponsorship dollars next year. The Indycar people know how much they need this event (many of their races draw pitiful crowds) and will undoubtedly help to secure that sponsorship. Plus there will be much more knowledge about everything from crowd control to ticketing levels that should help make things much more efficient next time around.
    The fact is that auto racing does not have the kind of cultural cache with certain parts of society of, say, the Preakness or baseball or the symphony or other entertainments that we cheerfully subsidize. But as the first Grand Prix shows, it has a lot of fans who are eager to celebrate this city. Don’t send them away. Give them more than a movie to go to.

  • GlenW

    Gran Prix racing couldn’t make it work in car-carzy Houston. Why on earth anyone believed it would work in Baltimore is beyond me.

  • Dsthomas4007

    So, I suppose there is no longer a pretense of unbiased reporting from the Brew based on the constant barrage of negative articles concerning the grand prix. Granted it did not go as planned but that is no reason the completely dismiss this as a failed enterprise. A significant investment has been made in this and if financially solvent backers can be found we should give another shot. Much of what did not go as planned can be addressed the second time around.

    Love the Brew but on this you guys have a stick up your butt. Imagine if the Preakness and similar events never happened. How boring life would be.

  • Theparkadvocate@gmail.com

    It would be interesting if the city were more deliberate in innovating enterprises like this.  Sometimes it seems as though ideas and promotions are brought to the city; they are generated and tried elsewhere, then retrofitted for the city.  The Grand Prix makes the point…..

    Maybe a better way to go about “creating jobs and helping the economy” would be to set some outcomes for an enterprise—economic markers or objectives—and then tailor the city’s investment to best meet the general economic and social goals of the project. 

    Let’s imagine that we want to recognize the diversity of our culture and demographic in the city.  And do it in a way that helps us with one of the city’s biggest problems: abandoned and grossly underutilized housing stock. 

    So, we proceed in a fearless way, pusing aside all of the naysayers and do the following:

    1. we set markers for investment, dollars and asset appreciation (real estate); sustainability of those assets; full time and part time jobs, etc…..

    2.  we get some really nationally known city planners—people who have been up and down the “housing” issue on its every side and part, and we use their experience and begin to imagine our way to creating a, shall we call it, Baltimore’s Latin Quarter community. 

    Hold on now—don’t start thinking negatively.  

    3.  we get all the stakeholders to  together with these smart planners and in one long Saturday afternoon, we find an area in Baltimore than can be intentionally transitioned into our Latin Quarter. That’s all, just imagine.  (This dreaming is, by the way, no more or less, than what “developers” do when they come to town and set up shot—only they make their own markers and dream their own dreams, and ask us to make them ours.

    4.  After all this dreaming, we begin to examine how to do this. Or, alternatively, should we or can do we do it—is it feasible at many levels. And over what period of time. 

    5.  Let’s further suppose that this undertaking could be viewed as a great Civic Enterprise, not only a solution to the abandoned housing problem; let’s suppose our leadership goes to New Orleans, and learn how they handled their massive disaster–
    how they put it all together. Surely there are many lessons to be learned.  We might even expect that New Orleans had to figure out how to restock its housing and repopulate its city. That’s what we have to do…right?

    6.  Anyway, after dreaming and investigating and learning, we begin to model an undertaking that will allow us to repopulate our city with 500 families, who can afford to live in a targeted area, called, the Latin Quarter.  We bring in the feds; we get the state involved; we make our delegation get special legislation passed—yes, we even create special tax incentives (breaks) for equity investors in the project, and on and on: we build a community in our city, a place that is distinguished by its Latin population, culture, food, music, events, but most of all sense of place.   

    My point in running through all of this is that our city seems unable to innovate for itself, responding to its situations and markers-of-our-collective choice.  Why shouldn’t we take the “housing, taxes, re-population issue” and put it front and center in our minds and use THOSE PROBLEMS as the basis for our turn-around projects—enduring projects, projects that add value, and can be sustained by and made a part of the city’s inherent economy. Not an exception to it. 

    Hey U never know…did you ever go see the Running of the Bulls in Baltimore.  Well, that might be a very great reach.  But you get the point. 

  • Tarita Coles

    Economic development is NOT a zero sum game where investment in one
    area means no investment in another area. The more diverse the sources
    of economic development, the better. The film industry is just as
    mercurial as any industry, moreso even. There is no infrastructure
    that the industry would be reluctant to leave behind; if they don’t
    want to come here, they won’t. If Hollywood tires of movies or shows
    about East Coast cities, we’re screwed.

    If the Grand Prix only brought in $25 million, that’s $25 million we
    didn’t have before. I only heard positive feedback from my family and
    friends outside of Baltimore who marveled at how great the city looked
    and who would never have thought that such an event could take place
    in little ol’ crime-ridden, drugged-up, depressed Baltimore. In terms
    of creating a positive image for the city, the Grand Prix did
    infinitely better than The Wire.

  • Kate

    Baltimore isn’t the only city to fall for the “street race festival” scam that the IRL Indycar series has become infamous for.  Hopefully, it will die before they get another opportunity to screw us over again

  • May 22, 2013

    • As city firefighters face the possibility of 24-hour-long shifts to save money, Fire Chief James Clack today announced the filling of two newly-created administrative positions, each carrying annual salaries of about $100,000. In addition, Clack named Ian T. Brennan, Mayor Stephanie Rawlings-Blake’s assistant press secretary, as the department’s public information officer, replacing the retiring Kevin [...]

  • May 21, 2013

    • The Board of Estimates will be asked tomorrow to make Associated Catholic Charities the new operator of the city’s homeless shelter, replacing longtime provider JHR (Jobs, Housing and Recovery), Inc. The Mayor’s Office of Human Services is asking the board to approve a one-year $2.7 million contract for ACC to run the 250-plus-bed shelter, beginning [...]

  • May 17, 2013

    • UPDATED – At his stop at a South Baltimore factory this afternoon, President Obama announced a plan to boost the economy by reducing the red tape required on large federal projects. “Sometimes it takes too long to get projects off the ground,” Obama said at Ellicott Dredges, citing permits and planning delays related to infrastructure [...]

  • May 16, 2013

More of the Daily Drip »

Below the Fold

  • December 10, 2012

    • We Brew-ers have been gradually getting our act together to finally give our Kickstarter contributors their Thank You mugs, bumper stickers and other rewards. On Saturday we knocked out one more of those formal thank yous in a borrowed conference room downtown. It was a “Baltimore Brew Staff Meeting.” We mostly have lower-case “staff meetings,” [...]

Twitter

Facebook