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In Toronto-vs-Chicago theatre war, tax credits are the new ammo Add to ...

A new front has opened in the long-standing battle between Toronto and Chicago for the title of North America’s second theatre city: tax credits.

While the subject matter would make for a mind-numbing musical, an act passed by the Illinois Legislature quietly over the holidays has essentially launched the opening shot in a war over War Horse, the West End megahit that Toronto is about to become the third city in the world to stage. Or it might be called the first punch in the Thrilla for Priscilla: Queen of the Desert, the colourful drag-queen musical that entertained Torontonians before it became a hot, Tony-winning ticket on Broadway.

In an effort to lure prestigious, big-budget productions such as these away from cities like Toronto to Chicago – and, particularly, the employment, tourism and hundreds of millions of dollars in economic spinoffs they bring – Illinois’s new Live Theater Production Tax Credit will offer a tax rebate up to $2-million (U.S.) for commercial producers of “pre-Broadway and long-run shows” beginning in July.

The threat of losing in-demand shows to American competitors has motivated Toronto rivals Dancap and Mirvish Productions to put their differences aside and join forces with actor, stagehand and musician unions and associations to figure out how to lobby for a similar incentive either at the federal or provincial level.

Earlier this month, the two producers also met with representatives from Tourism Toronto, the city’s Entertainment District Business Improvement Area and the Hotel Association to discuss how to persuade the Ontario government to adopt a similar, or perhaps even more attractive, tax credit.

Or, in the words of producer David Mirvish, “laws that allow us to be competitive – a level-playing field.”

“I have some concern that there will be some productions that will choose Chicago over Toronto – that this will make the difference in their choice,” Mirvish says. “If you lose one large, long-playing show, you’re going to take $600- to $800-million out of the economy of Toronto.”

Provinces and states – as well as Canada’s federal government – have long offered tax deals to entice film producers to shoot (and spend) within their borders, but similar programs to attract multimillion-dollar commercial theatre productions are a relatively new phenomenon.

In 2009, in a bid to help its cultural industries recover after Hurricane Katrina, Louisiana launched a tax credit of 35 per cent on production and infrastructure expenditures on live performances that originate in the state to a maximum of $10-million a project.

Their model was a successful film tax credit that, according to the New Orleans Times-Picayune, saw movie production in the state increase from an estimated $10-million in 2002 to more than $674-million in 2010.

Arden Ryshpan, executive director at Canadian Actors’ Equity, echoes Mirvish’s concerns about losing top-tier commercial productions to Louisiana and Illinois – and other states that are now looking to follow their lead. That is why her organization, the International Alliance of Theatrical Stage Employees and the Toronto Musicians’ Association, initiated talks with Dancap and Mirvish (as well as some of the larger not-for-profits such as the Canadian Opera Company and the Stratford Shakespeare Festival) in 2009 on the idea of a competitive tax credit.

“It’s tough, with the dollar effectively at par, to bring productions north of the border, whether it’s film or television or live performance,” she says. “With all of that plus an incentive, it’s going to be harder to get these large productions to start in Toronto.”

Even though New Orleans competes for fewer productions with Toronto than Chicago, reverberations from the Louisiana bill have already been felt here.

In September, The Addams Family was the first Broadway musical to take advantage of the Louisiana incentive, choosing to launch its national tour in New Orleans instead of, among other possible cities, Toronto, home of show investor Dancap.

While local audiences weren’t short-changed by that decision – Torontonians got to see The Addams Family tour a couple months later – the economic spinoffs to the city were less pronounced, according to Peter Lamb, executive vice-president at Dancap. Originating the tour meant that cast and crew spent a month or more in New Orleans and an estimated $4 million (U.S.) building and rehearsing the show.

“The success of both Illinois and Louisiana getting their programs up and going has spurred us on,” says Lamb, who announced last week that Dancap was pulling the plug on a Toronto pre-Broadway tryout of a new musical called Prince of Broadway because of rising financial costs.

Lamb looks back to the days of Garth Drabinsky’s Livent, when a production like The Phantom of the Opera ran for 10 years at the Pantages (now the Ed Mirvish) theatre, as a time when Toronto was a major international commercial theatre centre. He says Dancap’s goal has been to return the city to those days in a more financially sustainable way, but he now believes it will take some government encouragement to get there. “Canada can certainly be a major player in live theatre – grow to be what it was before and greater, but it will takes something like this to help it.”

Lamb can’t say for sure whether a live-performance tax credit would have kept Prince of Broadway in front of Toronto audiences. “If we had promised some tax relief going in the way that films are, it would certainly have had an effect,” he says. “You’d be foolish not to go – it’s like an investment in your show.”

As with originating a tour, pre-Broadway runs have a larger economic impact than a mere tour stop. The producers of Prince of Broadway, for example, were in negotiations to rent theatre space at the St. Lawrence Centre for the Arts for five weeks of technical rehearsals this summer. “It’s a financial hit to our bottom line that we’re not very happy with,” general manager Jim Roe says of the potential $125,000 in revenue the city-owned centre has now lost.

In Illinois, it has also been argued that the state’s new tax credit will also allow long-running shows such as Jersey Boys and Mamma Mia! – which ran for two and five years in Toronto, respectively – to stay up on the boards for even longer.

“David Stone, the producer for Wicked, has taken the position that had this legislation been in place during the time that Wicked was in Chicago, the show would’ve played an additional year,” Lou Raisin, president of commercial producer Broadway in Chicago, told Time Out Chicago last month. “That would’ve been worth between $600- to $800-million in economic output to the city and state and an estimated 2,000 jobs.”

At the moment, the only political support on the horizon for a live-performance tax credit comes provincially from New Democrat MPP Peter Tabuns. In 2009, Tabuns, then his party’s culture critic, proposed a credit modelled after the Louisiana one in a private member’s bill, but it died on the order paper.

Tabuns, now energy and environment critic, plans to reintroduce his proposal when the Ontario Legislature returns in February and hopes it will find interest across the political spectrum.

In theory, tax credits will lure productions to Toronto that would not otherwise visit – and therefore result in higher revenue for the government, rather than less. (When Mary Poppins pulled in $12.6-million on a recent nine-week stop in Toronto, 13 per cent of the box office went to Queen's Park and Ottawa via the HST.)

“If you’re solely a business-oriented person, you can see the value,” Tabuns says. “If you’re solely an arts-oriented person, you can see the value.”

Mirvish hopes that the political will exists for such a measure to counter competition from south of the border – even at a time when cuts are the order of the day. “I’m doing a really good job if I’ve got the attention of the Illinois Legislature,” he says. “And I don’t believe my government’s going to allow them to beat me up.”

TORONTO-BOUND?

Toronto’s commercial producers regularly compete for pre-Broadway tryouts with producers in U.S. cities such as Chicago, Los Angeles and Boston. Here are a few shows aiming for the Great White Way in the 2012-13 season that might considering playing in Canada’s biggest city first.

Honeymoon in Vegas Based on the 1992 movie starring Nicolas Cage, this new musical has a score by Jason Robert Brown ( The Last Five Years, Parade). In November, a reading was held by Chicago-based director Gary Griffin with T.R. Knight in the lead role and Tony Danza in the supporting cast.

Toronto connection: Griffin regularly directs musicals at the Stratford Shakespeare Festival – and the rumour is he’s likely to start this show in nearby Toronto.

Matilda: The Musical This adaptation of Roald Dahl’s beloved children’s book about a telekinetic girl is the biggest British musical since Billy Elliot. If the Royal Shakespeare Company decides to test it out in a North American city before Broadway, none would be better suited than Toronto, which a number of West End hits, including Mamma Mia! and Priscilla, Queen of the Desert, have visited before New York.

Toronto connection: Director Matthew Warchus previously worked in town on the ill-fated Lord of the Rings.

Flashdance Toronto’s Sergio Trujillo is directing and choreographing an overhauled version of this musical adaptation of the 1983 film about a welder turned dancer. Former Toronto Life editor Tom Hedley co-wrote the script, based on his screenplay. The songs for Flashdance – save the pre-existing hit Flashdance ... What a Feeling! – are composed by Torontonian Robbie Roth.

Toronto connection: Do you need any more? David Mirvish was an investor in a previous London production.

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