City of Culver City, California
Agenda Item Report
Meeting Date: 02/07/11 Item Number: C-6
CITY COUNCIL AGENDA ITEM: Adoption of Resolution Suspending the Collection
of Business Taxes for Itinerant Motion Picture/Television Producers for a Period of
Five Years
Contact Person/Dept.:
Jeff S. Muir/Finance
Phone Number: 310/253-5865
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas – City Council (02/02/11), (E-Mail)
Culver City Chamber of Commerce, (E-Mail) Sony Corporation, (E-Mail) Culver Studios,
(E-Mail) GMT Studios, (E-Mail) Motion Picture Association of America (02/02/11)
Department Approval:
Jeff Muir (02/01/11)
City Attorney Approval:
Carol Schwab (by H. Baker) (02/01/11)
Chief Financial Officer Approval:
Jeff Muir (02/01/11)
City Manager Approval:
John M. Nachbar (02/02/11)
RECOMMENDATION:
Staff recommends that the City Council adopt a resolution suspending the collection
of business taxes for itinerant motion picture and television producers for a period of
five years.
BACKGROUND:
On January 24, 2011, for a second time, the City Council considered an agenda item
discussing the City’s current business tax policy as it relates to production
companies. The purpose of this item was to establish the importance of the film and
production industry in Culver City’s local economy and to provide an opportunity for
the City Council to discuss possibilities for a business tax structure that would be
more favorable to production companies and would also spur more activity at our
local studios, thereby stimulating our local economy.
DISCUSSION:
The City Council unanimously agreed to direct staff to bring back a proposed
resolution that will suspend the payment of business taxes for non-Culver City based
production companies that rent or use studio locations within the City for a period of
five years. The City Council also directed that a status report be provided each year
during the budget process to evaluate the effectiveness of the suspension. At a City of Culver City, California
Agenda Item Report
minimum, this report will contain information as to the trend in the number of non-
Culver City based production companies that have registered for a business tax
certificate, as well as the trend in business tax paid by the studios. The proposed
resolution will be effective immediately upon adoption.
FISCAL ANALYSIS:
For Fiscal Year 2009/2010, the City received approximately $9 million in business
tax. Of this amount, approximately $2.5 million was collected from companies under
the broad category of ‘entertainment’, which includes production companies, studios,
and others. It is estimated that at least 95% of the business taxes paid by
entertainment-type businesses is generated from the studios and other related
businesses located in Culver City. Thus, it is likely that current business tax
collections from production companies that only come to Culver City for filming
purposes is under $125,000 per year. Within this $125,000, it is estimated that
$75,000 is generated from short-term, non-studio filming and $50,000 is generated
from studio filming. Potential changes in policy regarding non-permanent production
companies will not have a significant effect on total business tax collection. With
increased cooperation and compliance with the studios, as well as greater studio
occupancy and a commitment for more local spending, there could be a stimulus to
our local economy.
ATTACHMENTS:
1. Proposed Resolution
MOTION:
That the City Council
adopt the proposed Resolution suspending the collection of business taxes for
itinerant motion picture and television producers for a period of five years.
MEETING DATE: 02/07/2011
AGENDA ITEM: A RESOLUTION SUSPENDING THE COLLECTION OF
BUSINESS TAXES, AS SET FORTH IN CULVER CITY
MUNICIPAL CODE SECTION 11.01.250, FOR
ITINERANT MOTION PICTURE TELEVISION
PRODUCERS.
ATTACHMENTS
1. Resolution
1-2
RESOLUTION NO. 2011-R__
NOW, THEREFORE, the City Council of the City of Culver City, DOES
HEREBY RESOLVE as follows:
producers, pursuant to Culver City Municipal Code Section 11.01.250, shall be suspended
for a period of five years (the "Tax Suspension").
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CULVER CITY, CALIFORNIA, SUSPENDING THE
COLLECTION OF BUSINESS TAXES, AS SET FORTH IN
CULVER CITY MUNICIPAL CODE SECTION 11.01.250,
FOR ITINERANT MOTION PICTUREfTELEVISION
PRODUCERS.
The collection of business taxes on itinerant motion picture/television 1.
WHEREAS, the City Council of the City of Culver City finds that the film and
production industry is of significant importance to the City's local economy; and
WHEREAS, the City Council supports the City becoming more competitive
and attractive to film production companies and creating an atmosphere that continues to
foster the film and production industry in the long-term; and
WHEREAS, in order to further this goal., the City Council has considered
options for a business tax structure that would be more favorable to production companies
and spur more activity at local studios located within Culver City, thereby stimulating the
City's local economy; and
WHEREAS, in light of the importance of the film industry in Culver City and
the positive economic impact, job retention and job creation that occurs through increased
filming at the studios located in the City, the City Council has determined that a five-year
suspension of the collection of business taxes on out-of-city production companies filming
at a Culver City studio location would, in the long-term, stimulate the City's local economy.|101010101010101010 10
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2.
The Tax Suspension shall become effective on February 8, 2011 and
2 shall automatically expire on February 8, 2016, unless earlier terminated or extended by
3 another resolution of the City Council.|1010|3.
During the five-year Tax Suspension period, the Chief Financial Officer
5 shall submit an annual report to the City Council during the City's budget process, which
6 shall include, but not be limited to, information measuring the effectiveness of the Tax
7 Suspension and identifying any noticeable economic impacts.
MARTIN R. COLE, City Clerk|1010 10
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ATTEST:
APPROVED and ADOPTED this__ day of , 2011.
CHRISTOPHER ARMENTA, MAYOR
City of Culver City, California
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