Sweeter film subsidy lured $88 million Disney movie to New Zealand, makers say

The makers of "Pete's Dragon" say the 5 per cent production grant available on top of an existing 20 per cent incentive in New Zealand drove their decision to base the $88 million Disney feature film here.

Pete's Dragon is a remake of a 1977 Disney movie about an orphaned boy, Pete, whose best friend is a dragon, and is a mix of live action and CGI. Filming in New Zealand started last January and the movie's New Zealand premiere is this afternoon in Wellington.

The project qualified for a 20 per cent rebate under the New Zealand Screen Production Grant, which the government lifted from 15 per cent in April 2014 as part of a move to put the local industry on a stronger footing and insulate it from lulls between blockbusters.

The Disney film is also the first to attract an additional 5 per cent uplift, introduced at the same time for movies that can show significant economic benefits for New Zealand.

Disney's vice president for film and television production planning MaryAnn Hughes told BusinessDesk the extra 5 per cent tipped the scales in favour of the production being filmed in New Zealand. She's in Wellington ahead of the film's local premiere and screenings in filming locations across the country.

Hughes said New Zealand's 20 per cent rebate was "in the middle" globally, and other filming locations have greater incentives such as Georgia in the US at 30 per cent and the UK at 25 per cent.

"The 20 per cent is very standard in what we see around the world but New Zealand is at the forefront with the 5 per cent," Hughes said. "I refer to it as a negotiated business agreement with the New Zealand government. We needed the 5 percent to be able to take Pete's Dragon to outlying locations like Tapanui," a town in Otago with a population of 770 people where four-and-a-half weeks of filming was done.

The agreement for uplift had production spending, employment, and marketing requirements, and Hughes says the project has exceeded many of those terms already.

All the filming was done in New Zealand, with the agreement stipulating at least 90 per cent of shooting to be done here; all of the special effects budget was spent in New Zealand at Weta Digital, compared to the requirement of 75 per cent; and more than 80 per cent of the 1040-strong production crew were New Zealanders, more than the minimum 75 per cent.

I refer to it as a negotiated business agreement with the New Zealand government. We needed the 5 percent to be able to take Pete's Dragon to outlying locations like Tapanui.

Tapanui was the biggest beneficiary of the deal with Disney directly hiring 21 per cent of the population - 163 people - and renting 55 houses in the town for cast members and crew.

The 1977 movie was set in a logging town somewhere in Oregon named Millhaven, which Tapanui was transformed into. The town, which had its main street closed for a week for filming, will have two screenings of the movie after tickets for the initial planned screening were snapped up, Catherine Bates, the New Zealand Film Commission's head of incentives, said.

Another four-and-a-half weeks of filming took place in Rotorua and Tokoroa and four weeks in Wellington both in Stone Street Studios in Miramar and in locations such as Hutt Hospital and Battle Hill Farm Forest Park in Porirua.

The marketing partnership includes a deal with Tourism New Zealand and the Film Commission allowing it to use footage of the South Island taken by famous aerial filming helicopter pilot Alfie Speight.

Many of the benefits of that aspect of the deal are yet to be seen ahead of the movie's general release and post-launch aspects such as behind-the-scenes features on the DVD and BluRay, Bates said, while Disney's Hughes said she had received "a number of calls from other studios" who were curious about the 5 per cent extra rebate.

The size of that rebate is not yet known as Disney will apply for it after the film has been launched, and Bates said the Film Commission expects that application in the new year.