Puerto Rico basking in Hollywood spotlight

The tropical U.S. territory of Puerto Rico is increasingly a backdrop in American and European cinema, standing in for Baghdad war zones, Brazilian slums, or cookie-cutter American suburbs.

Rarely does the island play itself on the silver screen. But in recent years, the territory has provided dramatic land- and seascapes for productions starring some of Hollywood's biggest names, including George Clooney and Johnny Depp.

Television productions are also finding a temporary home here. HBO's dark comedy series "Eastbound & Down" and the Italian miniseries "Angels and Diamonds" recently filmed in Puerto Rico. HBO's crime drama "The Wire" shot a memorable sequence in the scenic seaside slum of La Perla.

"It's just got a great flavor," said Luis Guzman, a New York-born actor of Puerto Rican heritage known for his work in "Boogie Nights" and "Traffic." ''People who shoot for the first time on the island are pretty blown away by all the beauty."

Sure, the Caribbean island has an array of beaches, rainforest, desert-like ranges, colonial streetscapes, flashy resorts and gritty ghettoes. But Hollywood has been attracted, first and foremost, by tax incentives that are among the most generous offered by any U.S. jurisdiction.

Star-struck politicians in the U.S. territory have been eager to dangle big tax breaks and other incentives in a feverish bid to lure a film industry that is being similarly courted all over the world and has grown accustomed to shopping around for the best deal.

"Tax-credit programs have become the determining factor in deciding where to shoot, and ours is very aggressive," said Mariella Perez Serrano, the island's film commissioner. "The more they spend in Puerto Rico, the more they get back."

Even though tax credits have been offered to moviemakers since 1999, Puerto Rico has just started fully capitalizing on its proximity to the film industries in the U.S. mainland and Europe by aggressively marketing the credits.

Film commission employees are increasingly heading to industry trade shows, where they make their pitch to studio executives, producers, directors, cinematographers and location scouts. They advertise the tropical locale as a top moneysaving film destination in trade publications such as Variety and The Hollywood Reporter.

It's paying off. In 2000, just one movie was shot in Puerto Rico, generating less than $1 million. In 2009, nine movies generated $57 million. So far this year, seven films have been shot and there are more in the pipeline, but confidentiality agreements with the studios prevent local officials from identifying them.

Puerto Rico refunds up to 40 percent of a film studio's expenditures during a shoot, transforming moviemaking into one of the few bright spots in an otherwise tough local economy. To tap into the island's program, the government requires that at least 50 percent of principal photography be shot on location or $1 million has to be spent hiring local crew and contractors. Shooting on government properties is free of charge.

Politicians may even sweeten the incentives package with new tax breaks for nonresident actors and makers of commercials in a bill awaiting a Senate review during next year's legislative session.

Elizabeth Redleaf, producer of Todd Solondz's 2009 movie "Life During Wartime," which had Puerto Rico doubling for South Florida, said the generous tax breaks motivated them to shoot on the island and work with local vendors.

"That's the point of the tax credits — they act as a local economic stimulus. And with a 40 percent tax credit, we were happy to stimulate whenever we could," Redleaf said from her office in Minneapolis, Minnesota.

In return, Hollywood studios and independent producers spend money on sets, props, caterers, and salaries for actors, extras and crew members. Movie crews visit local restaurants and spend at local businesses while shooting in town.

Moviemaking can be a flavor-of-the-moment business, so when Puerto Rico Gov. Luis Fortuno signed a law last year extending the 40 percent tax credit for film productions until 2019 he stressed his government was "committed to turn the island into one of the most important film industry destinations."

The stakes are high for the struggling U.S. territory, which is grappling with a 16 percent unemployment rate, higher than any U.S. state. Officials hope that the film industry will boost the economy with more infusions of cash and jobs.

Producers praise Puerto Rico's crews and the film commission's cooperation, even if shooting in the territory comes with its own brand of logistical headaches for big studio movies and TV series. The absence of a soundstage is the biggest problem.

In a tropical island long on scenic vistas but short on moviemaking amenities, a vacant warehouse in the San Juan suburb of Guaynabo was the closest the producers of the Warner Bros. action flick "The Losers" could come to a soundstage.

Stephanie Laing, producer for the HBO series "Eastbound & Down," which had Puerto Rico doubling for Mexico, said they were "limited with what we could build due to the lack of proper film stages with support systems."

"The biggest problems we faced had to do with the fact that Puerto Rico is still a relatively young film industry and as with all new industries there are bound to be growing pains," Laing said.

Now with Puerto Rico experiencing a mini-boom in filmmaking — courtesy of its tax credits — the push is on to build a full-scale soundstage.

Anibal Melendez, the mayor of the northeast coastal city of Fajardo, said husband-and-wife pop stars Jennifer Lopez and Marc Anthony hope to turn a sliver of his municipality into a moviemaking hotspot. Whether a soundstage will be built in Fajardo is far from certain, however, and publicists for the couple — who teamed up for a movie on Puerto Rican salsa legend Hector Lavoe in 2006 — declined comment.

Economists in Puerto Rico say luring the movie industry to Puerto Rico is helping ease the U.S. island's grinding four-year recession, but they also warn that permanent tax breaks can end up being more of a crutch than an incentive.

"It is a good idea to attract stateside moviemakers to the island, but our end goal should be to develop good local productions that can play around the world and make money for local talent," said Juan Lara, a leading economist on the island.