Incentives to attract Sundance Film Festival win bipartisan legislative applause

An audience applauds during the Sundance Film Festival.

Colorado’s film-incentive program has generated division among legislators since its inception. The state’s effort to attract the Sundance Film Festival to Boulder, however, is getting near-unanimous support.

The House Business Affairs and Labor Committee on Wednesday approved the creation of a new incentive tax credit to draw what is arguably America’s most prestigious film festival away from its long-time home in Park City, Utah. Having outgrown the 8,400-person town, the 11-day festival that attracts some 70,000 annual attendees has narrowed its search for a new home to three locations: Salt Lake City (in conjunction with Park City), Cincinnati and Boulder.

Under House Bill 1005, sponsored by House Majority Leader Monica Duran of Wheat Ridge and fellow Democratic Rep. Brianna Titone of Arvada, Colorado would offer an aggregate total of $34 million in new refundable tax credits over a 10-year period. Those credits, which can only be claimed by a global film-festival entity that sells at least 100,000 in-person tickets annually, would be paid retrospectively after the festival generates its sales each year, supporters emphasized.

While part of the argument for attracting the festival focuses on the aid it could give in growing Colorado’s film-production industry, most of the pitch made to legislators involves the economic benefits it could produce for Boulder County and the state as a whole. According to the Sundance Institute’s economic report, the 2024 festival generated $132 million in gross domestic product, created 1,730 jobs paying $69.7 million in wages and attracted 24,000 out-of-state visitors who spent an average of $735 a day, Titone noted.

“That means millions of dollars in spending on hotels, restaurants, retail stores and all other manners of things that tourists do when they visit from out of state,” said John Tayer, president/CEO of the Boulder Chamber. “The competition to host the Sundance Film Festival is fierce because it will be a game-changer.”

A new kind of film incentive

A crowd gathers outside of a theater in Park City, Utah, during the Sundance Film Festival.

Gov. Jared Polis, a Boulder County resident, is pushing for creation of the new tax credits — HB 1005 also contains $500,000 to help local festivals grow — despite facing a $670 million budget shortfall next year because he sees the long-term potential of Sundance. Also, because the tax credit couldn’t be claimed until 2027, when the festival is expected to settle for its first year in its new home, it offers the benefit of not impacting the budget for several years.

Legislators in 2012 created a program to refund as much as 20% of spending for qualified and approved film, television and video-game productions, and they evolved the program into a tax credit two years ago. But while program leaders have boasted of its 16-to-1 economic return on that spending, critics have assailed the program both for giving public money to film studios and for not being substantial enough to draw major productions.

On Wednesday, however, both Republicans and Democrats rallied around the potential attraction of the 46-year-old festival because of its likely boost in revenues for businesses during a time of year that is slow for all parts of Colorado not adjacent to ski resorts. Democratic Rep. William Lindstedt of Broomfield said it could spur more filmmakers to know the state and shoot projects here, while GOP Rep. Max Brooks of Castle Rock said it could help restaurants and hotels recover from lingering effects of pandemic shutdowns.

“This bill is a win-win,” said Rep. Steven Woodrow, D-Denver. “We get to invest in Colorado while celebrating a festival that champions the creativity and innovation that is Colorado.”

Just a boon to Boulder?

Tayer and Jeff Kraft, deputy director of the Colorado Office of Economic Development and International Trade, added that while Boulder will feel the biggest economic impact, areas within 50 miles of the city will benefit as well. Out-of-town visitors are likely to extend their trips to ski or partake in other activities, Estes Park is likely to host some parts of the event, and hotels and transportation services will get boosts well beyond the county’s borders.

None of that, however, moved the bill’s lone critic, Democratic Rep. Bob Marshall of Highlands Ranch, who questioned why Boulder would need to “bribe a for-profit company to come here” rather than stand on its own merits. Marshall also said that it should be locals putting up the incentives rather than the state if they will get the most benefits.

Colorado state Rep. Bob Marshall speaks to a gathering at the Colorado Chamber of Commerce in 2024.

“The best way to have a good business environment is to have a good business environment and not give out subsidies in general,” Marshall said. “If this has such an extraordinary impact — and I don’t doubt that it does — Boulder should be thrilled to put up the money to get that impact rather than asking the rest of the state to subsidize it.”

Decision likely in next two months

Even with paying $34 million to try to attract the festival, Colorado is still expected to generate a net gain of $16 million in tax income over the 10-year period if out-of-state visitor numbers remain steady, Kraft said.

With the 2025 Sundance Film Festival running through Sunday, event organizers aren’t expected to decide on its long-term future until March. But Boulder and Colorado leaders want to get the bill signed before then to ensure the festival’s board members that the state will ante up to try to attract Sundance, even as local leaders acknowledge these incentives will be smaller than those offered by the other two finalists.

Colorado is trying to make up what it may lack in hard cash with promises of affordability. A growing number of area lodging and commercial spaces have signed a document pledging not to raise prices to more than 150% of annual averages during the festival — a significantly lower hike than the ten-fold boost in pricing that Park City hotels now charge, said Jonathan Singer, Boulder Chamber senior director of policy programs.

HB 1005 moves next to the House Finance Committee, where it must receive approval before going to debate in the full House.