LANSING – A report surfaced Thursday that a film production facility in Pontiac may fall short of making its bond payment on which the state pension fund is the guarantor, but Senate Majority Leader Randy Richardville says if lawmakers and the governor committed $100 million or more to the film industry incentives, it could come in time to save the studio.

But Lt. Governor Brian Calley told Gongwer News Service he doesn’t think the state should be setting policy based on one company.

The Detroit News, citing unnamed sources close to Raleigh Studios, reported the state’s pension fund backed the $18 million in bonds sold to partially finance the $80 million facility back in 2009 and that if the studio defaults, the state would owe $630,000 after February.

Investors in the studio include businessmen Alfred Taubman, John Rakolta and Linden Nelson.

“A few years ago we told some Michigan investors that if they invest in an industry that we would back them. And we gave them parameters and now we’ve changed that. We sent several businesses away that would help recoup that investment,” Richardville said of the change in incentives.

Richardville said the state’s involvement with Raleigh Studios via the pension fund came up at the tail end of discussions on the film incentives last year. He said he agrees with the governor about creating an environment for job creation through tax and regulatory changes and not having government play the role of job creator.

But, “the other part of business environment that’s important is that we remember what was said. They put up the most risk, so the state’s really on the hook for it,” he said.

Last year, Richardville sponsored a measure recalibrating how the remaining $25 million annual appropriation would be allocated, more heavily weighting it on Michigan-based film activities and personnel. But he has also said he wants to see the state appropriate what the credit program was giving out, which would be $100 million to $125 million each year.

Given the report about Raleigh Studios, Richardville said if his idea is implemented in the upcoming budget it would come in time to save that studio from default, which would avoid forcing the pension system having to fix the issue. Some projects already have been approved for film incentives and more are in the pipeline.

The Detroit News report said the studio, which just wrapped up filming of Disney’s “Oz: The Great and Powerful,” is looking for its next big project.

But Calley said while the administration wants to find ways to support the film industry, the state can’t set tax policy, according to one company.

He also noted the state treasurer is in charge of the pension fund investments and that the payment that would have to be made, as well as the state backing the $18 million bond, are both smaller figures compared to the fund’s overall investment and the $100 million Richardville is proposing.

The CenterPoint PAC, which is tied to Raleigh Studios, has donated $20,000 to the caucus political action committees of House and Senate Republicans, as well as $1,000 to Richardville’s leadership committee.

For Stephanie’s film story:

Terry Stanton, spokesperson with the Department of Treasury confirmed the state retirement system would be obligated to cover the balance of the payment due, but that cost would be $420,000, which is lower than the Detroit News’ article claimed.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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