The Next Chapter of Hollywood East

Earl Owensby grew up watching films like The Quiet Man and Gone With the Wind while he swept the floors of a tiny movie house in Cliffside, North Carolina. Even then, Earl was more interesting than the characters he saw on the screen.

He’d been adopted at 11 months after his mother committed suicide and his father died running moonshine, and when he was old enough to escape Cliffside’s mills, he signed up with the Marines to fight in World War II. When he returned, Earl started a tool company, made a boatload of money, and decided his true calling lay in making movies.

His first film was made in 1973 for $400,000 and starred Earl as a politician who went on a revenge blitz after his family was murdered. After it grossed $12 million in two years, he boasted, “We need to take violence off the street and put it back on the screen, where it belongs.”

As his list of films grew, Earl’s ambitions did, too. He bought a cattle farm west of Charlotte and turned it into the largest independent soundstage outside Hollywood. In the mid-’80s, Earl decided to build what he called “the world’s largest underwater filming facility.” So he bought an abandoned nuclear power plant across the border in Gaffney, South Carolina, for $3 million, and attracted the director James Cameron to film his big-budget epic, The Abyss.

Earl’s success convinced another independent filmmaker, Dino De Laurentiis, to visit. In the fall of 1983, De Laurentiis arrived in Wilmington to film the movie Firestarter. Seduced by the state’s right-to-work laws, warm weather, and scenic backdrops, he decided to stay. He built a $17 million studio in Wilmington and promptly began making films like David Lynch’s Blue Velvet, which took advantage of the waterfront noir along the city’s Front Street.

The mostly good-natured rivalry between Earl and Dino defined the industry’s early era in North Carolina. “In a few more years I’ll be bigger than Dino is or will ever be,” Earl once boasted. That never came to pass. Instead, Dino eclipsed Earl to become the better-known father of film in North Carolina.

Dino’s studio was eventually sold to Screen Gems, and on a recent afternoon, its 10 soundstages were full. One project featured a full replica of the International Space Station. Another was a Fox reboot of the BBC mockumentary This Country.

Johnny Griffin, who heads the state’s regional film office in Wilmington, estimates North Carolina is on track to pull between $150 and $200 million in film spending this year—up from a pre-pandemic average of $130 million. But Griffin knows not to get too excited.

It wasn’t that long ago he was showing up in Hollywood and executives were asking, “Why are you here?” Caught in the backlash of House Bill 2, which made transgender bathroom access a national issue, an ideological fight in the General Assembly over the use of film incentives, and facing fierce regional competition, investment in North Carolina’s film industry was anything but stable.

But the script is changing. How might Earl pitch the rapidly unfolding sequel? It’s a love story! State falls in love with film. State loses film. State gets film back.

Okay, maybe we’ve got to crunch some numbers on the back end. But we’re gonna be walking down the aisle with this one. It even has a ready-made foil across the border in Georgia, where Dan Cathy, the evangelical chairman of Chick-fil-A, has built his Trilith Studios into a Death Star. With a million square feet of soundstage space, Trilith is rolling over everything in its way.

Wait, forget the love story. We’re talking a thriller, a real potboiler. Get me a rewrite. It’ll sell itself.

I moved to Wilmington five years ago and never got to see what locals call the “Iron Man bubble.”

The Port City is home to one of North Carolina’s three regional film offices—the others are in Charlotte and the Triad—that grew out of an incentive program launched 20 years ago. One of only six such programs in the country at the time, the program helped lure two celebrated TV shows, One Tree Hill and Dawson’s Creek. In 2010, the Democratic legislature sparked a boomlet in big-budget film production by increasing its original incentive budget a hundredfold—to as much as $20 million per picture.

The Hunger Games came to Shelby and Brevard in 2011. Two years later, Marvel brought Iron Man 3 to the Screen Gems lot in Wilmington. Suddenly, everyone was talking about North Carolina as Hollywood East. A study commissioned by the industry estimated that the $60 million spent on incentives between 2007 and 2012 netted $85.4 million in increased tax revenues, or a positive “net contribution” to the state of $25.3 million. It also estimated that 4,100 new crew positions were added.

But Republicans, newly in control of both the General Assembly and the governor’s mansion, were skeptical. Challenging the industry’s study as riddled with “misunderstandings of the state’s tax law, invalid or overstated assumptions, and errors in accounting,” a report from the Legislature’s nonpartisan Fiscal Research Division estimated the state spent $84.2 million on incentives—not $60.1 million as the industry claimed—and actually lost a staggering $33.1 million on its investment.

Questions over the program’s efficacy, combined with ideological concerns about the purpose of the program itself, put the film industry center stage for a legislature focused on cutting taxes and spending.

Rick Henderson, then editor of the conservative Carolina Journal, remembers heated discussions about how “Hollywood stars were going to bank all this money that normal working-class people had to pay for.” Americans for Prosperity, the conservative advocacy group, began running ads labeling film incentives “Hollywood handouts.”

When the General Assembly adjourned in August of 2013 without extending the film program, the blowback from Hollywood was intense. The Motion Picture Association of America sent a letter to legislative leaders, warning that North Carolina would “no longer be considered for major future feature films.”

But John Hood, chairman of the conservative John Locke Foundation, said most legislators shrugged off the threat. “I think the lawmakers who took this issue on did it because they thought it was the right policy move,” Hood told me. “Personally, I think these subsidies are hucksterism. But if you’re going to be in the subsidy business—and this is an important thing—you can still have better or worse ways to do it.”

In 2014, the General Assembly reconstituted the program. Gone were the unlimited rebates that were given when a film company spent a minimum amount in the state. Instead, North Carolina would start paying grants with higher scrutiny, outside auditors, and stricter caps.

In 2014, the total annual budget for the state’s grant program fell to $10 million—less than half of what could have gone to just a single project a few years prior. Soon thereafter, House Bill 2 erupted as a national issue—spurring boycotts and jabs by late-night comics. By 2016, North Carolina’s movie industry was on life support.

“Film was an industry that was gifted to us by Dino De Laurentiis,” said Harper Peterson, the former Democratic mayor of Wilmington who served in the state Senate from 2019-2020. “And suddenly we didn’t want it anymore.”

Nick Basta, a successful Harvard-trained character actor, had recently bought a new home in Wilmington when the bottom fell out. Basta remembers arriving from New York in 2004 and finding work everywhere. “Besides TV and film, you had six or seven theaters,” he says. “There were 200 actors living in town, and we were all staying busy.” The Nicholas Sparks’ movie Safe Haven, which filmed in Southport in 2013, earned him $10,000 in long-term residuals for a single day of shooting.

Proponents of the film industry acknowledge that the work is generally short-term or seasonal. But they argue that the jobs also come with higher wages and benefits, attracting a creative community that has its own multiplier effect. But after the General Assembly diminished the incentive program in 2014, Basta says, “I couldn’t find work in North Carolina for five years.” He made his way teaching in the theater department at UNC Wilmington and doing occasional turns in feature films, as with the Academy Award-nominated Harriet. Today, he counts fewer than 40 actors like him left in town.

Many of the tradespeople—grips, boom operators, set designers—have completely disappeared. “The generation that started in the ’80s is dying out,” says 68-year-old Tom Jones, Jr., who started building film sets for De Laurentiis when he was 32.

Like Basta, Jones looks around and sees a town shorn of talent, with many of his colleagues having relocated to Georgia years ago. Thanks to the four semi trucks sitting outside his house, he can load up in a few days to drive anywhere there’s work. But now that COVID-19 restrictions are loosening, and a pent-up demand for new content is surging, he’s struggling to find enough help.

“We missed out on training a new generation of young people because there wasn’t enough work,” he says. “We have been decimated across the board.”

At UNC Wilmington, which recently added a master of fine arts program in film, it’s both an educational and economic issue. Mark Lanier, an assistant to the chancellor in charge of government affairs and economic development, says he understands the big picture argument that lawmakers ”don’t want to pick economic winners.”

But he also notes recent incentive packages aimed at big tech and financial service companies, and argues that North Carolina can’t apply a different standard to film. ”Are we going to invest in Apple and Fidelity,” he asks, “but not take advantage of another opportunity that exists in the film industry?”

Lanier rejects the narrow statistical measures used by opponents of the subsidies. In his view, new residents coming to North Carolina because of the film industry carry their own business-building energy. ”We may not be getting more corporate tax revenues,” he says. “But we’re getting more economic benefit.”

That business-building energy doesn’t turn on a dime. Tom Jones, the set-builder, figures it will take at least two years to lure and train a new crop of artisans, which is why he’s putting off his retirement. “Right now we’re on a youth movement,” he says with more than a little urgency. “But it really depends on how busy we stay.”

All of this stands in stark contrast to Georgia, which can’t spend money on movies fast enough.

The Georgia Department of Economic Development insists it doesn’t spend hard dollars on film; instead, it forgoes a portion of the taxes it is eligible to collect. But that’s a distinction without much of a difference. Studios receive a 20% tax credit on projects with a minimum of $500,000 in-state spending and a 10% “uplift”—a bonus credit—by simply putting the Georgia peach seal at the end of the movie credits. Georgia’s program is uncapped, and tax credits that are unused can be “transferred.” That means if a powerhouse like Marvel spends $100 million in Georgia, it could receive as much as $30 million from the state. A spokesperson for the office said the total “direct spend” generated in fiscal year 2019 was $2.9 billion.

Although Tyler Perry Studios and Screen Gems have significant footprints in Georgia, the biggest winner has been Trilith, the upstart launched in 2014 by Chick-fil-A’s billionaire chief executive, Dan Cathy.

If Cathy had a reputation in Hollywood before, it was for his religious convictions (Chick-fil-A is famously closed on Sundays) and his public opposition to same-sex marriage. But his entry into film started out as a real estate venture: He had surplus warehouse space and sought out local production companies to fill it. When the U.K. giant Pinewood Studios (James Bond, Star Wars) came looking for an American outpost, it approached Cathy to form the joint venture that would become Pinewood Atlanta.

The executive he tapped to run it, Frank Patterson, was an eccentric choice. A former dean of film at Florida State University, Patterson moved to Las Vegas to bring Michael Jackson back to life as a “hologram”—he calls the technology “hyper-realistic digital humans”—before parachuting into Pinewood.

In a recent podcast appearance, Patterson recalled being impressed by Cathy’s vision when they first met, thinking, “How can he be [so] right about the future of this industry when he’s in the chicken business?”

Together, the duo has overseen an astonishing expansion, buying out Pinewood, forming Trilith, and building a million square feet across 18 soundstages—including a working city street that can be transformed into any location in the world. To ensure that filmmakers are incentivized to stay, they’re also building a city on 235 adjacent acres that Patterson says is designed to attract “creatives in every phase of their lives and careers.” Think StudioCity meets Disney’s Celebration for wannabe Spielbergs.

Paired with this private investment is enormous public investment. Georgia’s film-rebate program is uncapped. And it’s seemingly unopposed. No Hollywood-bashing press conferences or snarky quotes about liberal elites. Americans for Prosperity, especially, has given the state a pass.

“How they pulled it off is a mystery to me,” says Rodney Ho, the entertainment reporter for the Atlanta Journal-Constitution.

One explanation is that Georgia’s GOP controls all three branches of government, so there’s not as much need to use Hollywood as a wedge issue. Another is that the program is wrapped in the kind of confidentiality that keeps it out of the headlines. When I asked how much in state taxes have been forgiven, a spokesperson for the Georgia Department of Economic Development, Marie Hodge Gordon, said the number was “protected information.”

With six Marvel television series and three movies in production, Trilith has basically become too big to fail. It put Marvel and its parent company, Disney, in an awkward position as corporate giants like Coca-Cola and Delta lined up to oppose Georgia’s restrictive new voting law.

In April, Will Smith became the first major star to yank a movie out of Georgia. “We cannot in good conscience provide economic support to a government that enacts regressive voting laws,” he said. Others, however, have been less adamant.

Ryan Coogler, the director of the forthcoming Black Panther: Wakanda Forever, wrote in the trade publication Deadline that he’d “spoken with voting rights activists in the state [and] come to understand that many of the people employed by my film, including all the local vendors and businesses we engage, are the very same people who will bear the brunt of SB202. For those reasons, I will not be engaging in a boycott of Georgia.”

Disney isn’t afraid of playing politics. In 2019, its chief executive, Bob Iger, said that it would be “very difficult” to do business in Georgia after a law went into effect banning abortion if a doctor detects a fetal heartbeat. But Iger is on his way out, the governor who signed the voting-access bill, Brian Kemp, is still in office, and Marvel has added a half-dozen movies to its Georgia portfolio since then.

A few years ago, a conspiracy theory made the rounds of social media that Cathy was somehow behind the issue advertising that caused North Carolina’s legislature to whittle away its incentives, thereby opening the door to Georgia.

It’s always hard to tell who’s behind the dark money in politics. Anna Massoglia, a researcher with OpenSecrets, told me that while Americans for Prosperity is best known for its affiliation with Koch Industries, “it has had a range of other donors—many whose identities have not been disclosed.”

But plenty of smart people dispute the zero-sum premise that Georgia’s gain has to be North Carolina’s loss. Dan Brawley, who runs Wilmington’s Cucalorus Film Festival, points to an incubator he runs, which gives independent filmmakers housing and stipends to develop their ideas. In his view, Trilith is less a Death Star than a sun radiating across a regional landscape.

“There’s nothing like a big-budget project to fuel small creative projects,” says Brawley, whose title at the festival is chief instigating officer. “What happens when you have 200 people in the gig economy mixing it up when they’re not working on a big project? You have an explosion of creativity.”

A few miles away, the Screen Gems lot is bursting at the seams. There are more streaming services than ever, and the studios that fed them content largely shut down during the pandemic. Now that the industry has come roaring back, there’s so much pent-up demand that a global shortage in soundstage space exists, causing months-long waits. Wilmington is a hot property again.

One young-adult project for Amazon, The Summer I Turned Pretty, initially chose Nova Scotia to shoot because the incentives were better. But COVID-19 protocols forced quarantine times that made it hard to ferry actors in and out during a frigid winter. The project shut down, and its producers moved to the Screen Gems lot. Another new series about a Black vacation community, based on the bestselling book Our Kind of People, is the second show that Fox has set in Wilmington in recent months.

Looking around the busy lot, Griffin, head of the regional film commission, sees a threshold moment for new investment: “I’m waiting for an investor to say, ‘We need more space, so let’s build something.’ That’s exactly what they did in Georgia.”

I met Mike Lee over a coffee in Wilmington. A rising star in the GOP, Lee won election to the state Senate in 2014, then lost to Peterson by fewer than 250 votes in 2018 before reclaiming his seat in 2020. In that time, the film-incentive program went from its low of $10 million up to $25 million, and then to $31 million in 2016. In 2017, Lee successfully pushed to make the program a recurring part of the budget; opponents must now actively vote to eliminate the funding, rather than simply letting the annual appropriation expire, as they did in the year before Lee came to office.

I tell him that I’ve been struck by how many people are eager to complain about the needless politicization of film—and how few are willing to go on the record saying it. It’s as if they’re afraid the slightest public mention will cause the culture wars to come back.

Lee, a real estate attorney with four kids and a legislative specialty in education, nods. “When I started, the perception was not ideal,” he allows. “And the reason was because we weren’t really talking about film in the context of workforce.”

“We weren’t talking about the small-business owner that has business moving equipment around town,” he continued. “We weren’t talking about carpenters and set builders, and we weren’t talking about hairdressers, like the guy who’s cut my hair for 15 years. We spent too much time talking about film. But we’re not really talking about film. We’re talking about a diverse workforce.”

Skeptics, however, remain. Not long after the incentives were made a recurring part of the North Carolina budget, Americans for Prosperity held a “grassroots leadership academy” to train activists in why “Hollywood welfare has been an economic loser.” In 2019, a Kennesaw State University economist named J.C. Bradbury concluded the grants had failed to “deliver the promised economic boost.” His conclusion echoed other deep dives—including a 2020 report from Georgia’s Department of Audits, which called the estimates from its own economic development arm “overstated,” and an earlier report from the University of Southern California, which found states such as New Mexico saw returns of less than 15 cents on the dollar and attracted no long-term employment opportunities.

Lee, however, says there’s no contradiction between his conservative beliefs and a desire to compete for new jobs—even as he is careful to keep his distance from Hollywood. “My focus has really not been on building an industry,” he says. “It’s been on how I can help the workforce that’s already in the industry survive and thrive.”

His new bill, co-sponsored by a mix of Republicans and Democrats and expected to be brought to a floor vote later this summer, would add $68 million to the incentive program over the next two years—essentially doubling the annual pot. But it would be nonrecurring money. In 2023, legislators would have to vote against the extra funding, this time in what would be the early days of a gubernatorial campaign, when film could become a political football all over again.

Henderson, the longtime political editor, doubts we’ll see a redux of the anti-tax wave that caught Hollywood in a buzz saw.

“There are so many culture-war battles that are easier for the voter to understand now,” he says. “You’ve got all the stuff about critical race theory. You’ve got transgendered athletes. You’ve got woke capitalism. They’re all so much easier to boil down into sound bites than film subsidies.”

But you never know. And after all this back and forth, I wanted to hear from the one person I was sure could tell me whether the film industry has made North Carolina a beacon of innovation or a patsy for well-off movie producers.

It was mid-afternoon on a weekday when I reached Earl Owensby at his home in Shelby. The television was on in the background, turned up loud, and Earl seemed unhappy to be disturbed. I explained that I was working on a piece about how things had evolved since his days, but Earl wasn’t in the mood to be nostalgic.

He said he had deposits from two filmmakers in California to use the lot he still runs, but “we’ve kind of been put on the back burner by the pandemic. I haven’t got the rest of the money.” His studio, he said, “needs some repair on it,” and he’s waiting to see how things turn out before “we expend that kind of money.” He was almost apologetic when he said, “If you’re calling for me to make you a movie, we don’t have that kind of cash flow.”

With the television still blaring, and Earl’s patience waning, I asked if he believed the state should be investing more money in the industry he pioneered. “You’re asking the wrong person,” he replied. “Nobody ever gave me any [money] to make one with.”

Before he hung up, Earl pointed me to his website, which sells his DVDs. “I just made movies, they sold, and that’s it,” he said, summing up his philosophy.

One of the movies he has for sale is Rottweiler. I ordered it, figuring who knows better than Earl about a dog-eat-dog world.