Hawaii has invested in several Mainland big-budget films, but will it roll out the red carpet for one of its own?
When Pamela Wallace describes the upcoming movie project, titled Radio Free Hawaii, as a “music-driven teen comedy” based in the Islands, you can’t help but envision a localized version of From Justin to Kelly. Perhaps our very own American Idol, Jordan Segundo, could even play the lead in what you’ve imagined to be a cheesy, grass-skirt laden flick, filled with bad pidgin riffs.
“Oh, no, no, no … we’re thinking more School of Rock meets Ferris Bueller’s Day Off,” corrects Wallace, co-creative manager for the film’s production company, TalkStory Productions. “Although, From Justin to Kelly DID make money,” she’s quick to point out.
In actuality, Radio Free Hawaii will be nothing like the critically castigated musical, nor will it include any of the nausea-inducing, supposedly “local” dialogue that instantly causes any real locals to simultaneously roll their eyes and scorn the film.
While two thirds of TalkStory’s three-person management team is primarily based in California, the company isn’t interested in creating Mainland notions of what Hawaii should be like. They are interested in employing as many local actors and affiliated production staff as possible, to ensure Hawaiian authenticity in Radio Free Hawaii and all future TalkStory Production movies. “These aren’t going to be schmucky Brady Bunch-style movies,” says Lau. “They’re going to be very realistic portrayals of what Hawaii is really like.”
THE SCRIPT AND CREW
In early 2004, local investor Jason Lau and two Hollywood veterans, Kathie Fong Yoneda and Pamela Wallace, conducted a whirlwind of meetings with Hawaii-based investors for their new local film company, TalkStory Productions. At the time, they had already secured a soft commitment of around $2.5 million from a small group of investors on the Mainland, and were seeking an additional $1 million from local investors.
While several different Mainland-based production companies have successfully sought funding for movies filmed in the Islands, TalkStory Productions was the first local independent film company to aggressively seek funding for mainstream theatrical releases. “I don’t know of anyone else here doing it on this level. There are other independent people making films, but, in Hawaii, there seems to be a gap between that and commercial studio films,” says Lau. “There’s nothing that’s done here in between to fill that gap.” Until TalkStory Productions entered the scene, that is.
According to Wallace, the typical budget for an independent film ranges from about $1 million to $10 million. Over the next five years, TalkStory will produce a total of five pictures, all filmed in Hawaii, with an average budget of around $3.5 million (except for one film, for which the budget is estimated at $7 million). After the first five films, the company plans to begin producing two films each year. The first film, Radio Free Hawaii, is scheduled to begin production this summer.
Like Radio Free Hawaii, all of TalkStory’s films are targeted toward the teen, young-adult comedy and family-film genres, all of which are both popular and profitable. According to the Motion Picture Association of America, 59 percent of all tickets sold were purchased by 12- to 39-year-olds in 2002. Wallace, a writer and producer who won a Best Screenplay Oscar for her work as co-writer of the Harrison Ford suspense thriller Witness, says Hawaii is the ideal location for films in these genres. “Oh yeah, who wouldn’t want to see these movies? Imagine you’re a teenager in New York, and it’s zero degrees, and there’s a movie with this hot-looking guy and a pretty girl, and it’s in Hawaii, and it’s warm, with beautiful weather and great music,” she says.
Kathie Fong Yoneda, whose motion picture experience includes working in Hollywood at MGM, Disney, Universal and Paramount, emphasizes the movies’ universal themes, such as first love, growing up and coming of age, to stress that these are not local, esoteric movies. “These are not art films that we’re producing,” says Fong Yoneda. “These are very, very commercial movies designed to be shown in most theaters, and take advantage of the larger segment of the movie-going public, which is teens and family.”
UNFAVORABLE REVIEWS FOR TAX CREDITS?
When Hawaii Business caught up with TalkStory Productions in mid-January, the company was just coming out of the gates. Between pitching to potential investors, meeting with local film industry heads and seeking local members for the company’s advisory board, the team hit the ground running. By press time in late February, the company had made significant strides. Although he can’t disclose any investor names, Lau says he’s been firming up deals with local investors and is confident the company will reach its goal of $1 million in local funding by March 15. Further-more, TalkStory has assembled a strong team of local investors and legal counsel to join their advisory board: Rob Robinson, founder of the angel-investing group UH Angels, Bennett Wo, vice president of C.S. Wo and Sons and an active angel investor, and Russell Kaupu, an attorney with Goodsill Anderson Quinn & Stifel, have all signed on as local advisors.
“Rob and Ben are advisors and will not be involved in the day-to-day operations,” says Lau. “Their strength is assisting on the business side of the production company, which includes fund-raising, budgeting and business contacts.”
Not that Lau needs much help tracking down the money. With more than 20 years in the financial industry under his belt, his own investment partnership (Lau Enterprises), and a board seat in both the Hawaii Venture Capital Association and the UH Angels, not too many local investors have passed on the opportunity to at least hear his presentation.
Although it’s not the focal part of Lau’s pitch, TalkStory Productions is a Qualified High Technology Business (QHTB), which means any local investment into the company qualifies for Act 221 technology tax credits. For all of the act’s good intentions (it was designed to spur local investments by providing a 100 percent tax credit over five years for investments into QHTBs), it has, at times, mired fund-raising efforts for the company.
Ever since Act 221 was first introduced, practically anyone involved with the tax incentive program, including investors and the QHTBs themselves, has garnered unwanted criticism. Hollywood film studios, in particular, have been scrutinized for their use of the tax incentive program to finance one-shot movie deals, and local investors are taking heat for writing off millions of dollars on film projects whose economic contributions to the state were uncertain at best. Lau hopes the negative stigma doesn’t attract the wrong kind of investors, or scare off potential legitimate investors.
“We have one line in [our business plan] that says you can get QHTB credits under 221, that’s it. But 221 is just the icing on the cake,” says Lau. “We pitch this deal basically as if you didn’t get any credits at all. The whole thing is that we’re a local company producing good stories.
“Besides, only local companies can get the tax credits, and, if it benefits them, it benefits their employees and trickles downstream from there,” he says. “Isn’t that what this bill is supposed to do?”
TALKING STORY WITH LOCAL INVESTORS
Almost as much as he’s had to pitch local investors on TalkStory, Lau has found himself having to educate them as well. “Hawaii investors have come a long way from being just real estate savvy financiers … and film has started to make headway as a strategy to further diversify an investment portfolio,” he says. “[However], investors just don’t get a chance to see a lot of [film] deals, and need to understand how an idea turns into a script, a budget, a cast and crew, music, editing and distribution. The process is not complicated, it’s just new to most local investors.”
For those investors willing to take the risk, TalkStory is targeting an average investment return of around 300 percent per film. Furthermore, unlike some Mainland production companies, TalkStory is sticking around for the long haul – or at least the next five years. That means job creation for locals, and a long-term investment into one of Hawaii’s budding diversified industries.
“Any company that is going to have an extended presence like that in Hawaii, and have a slate of projects like that over the long term, is going to be tremendously beneficial to building our industry here, and, more importantly, creating sustainability for our industry and keeping our people employed year round,” says state Film Commissioner Donne Dawson. Under QHTB guidelines, TalkStory is required to spend a minimum of 75 percent of its budget locally, which will result in a largely local pool of both actors and behind-the-scenes workers. The requirement is hardly a burden for TalkStory.
“With this project, there are two things that are real important to me. One, everything’s gotta be authentic – they’ve got to realistically portray Hawaii – and two, we have to use as many local people as possible,” says Lau.
Lau’s California cohorts, Wallace and Fong Yoneda, are equally passionate about paving the way for a prosperous local film industry. As the creative eyes and ears of the operation, they are feeling the heat in Hollywood. “We know that a lot of people in the Mainland are looking at us to see how we’re going to do,” says Fong Yoneda. “I wouldn’t be surprised if there are people afterwards, that, if we’re successful, will come beating on Hawaii’s door.”