Drama Plays a Leading Role in the Development of Maui’s Film Industry
WAILUKU, MAUI — Socrates Buenger may not have founded Western philosophy, but he has done something extraordinary in the film industry — outfoxed one of the most powerful men in Hollywood.
Buenger’s gone from a starstruck child running errands for crew members on movie sets in Los Angeles to become chief executive officer of the largest sound stage in Hawaii.
He quietly built Maui Film Studios, a 22,000-square-foot repurposed warehouse in Wailuku, a project that undermined billionaire Hollywood producer Ryan Kavanaugh’s plans for Maui. Kavanaugh spent three years and thousands of dollars lobbying the Legislature for tax breaks to build a facility exponentially bigger.
It’s a David and Goliath story, with plot twists supplied by the narrator and supporting players.
As Buenger tells it, the story pits Kavanaugh, a young Hollywood titan driven by making money, against a middle-aged man who saw a business opportunity and seized it.
Kavanaugh’s vision of this drama may have to wait for a sequel. He could not be reached for comment for this story, but a Relativity Media spokesman emailed a two-sentence statement in response to questions about Maui Film Studios, Kavanaugh’s future plans and the conflict with Buenger.
“Relativity is committed to working with the local community to help build the film and television industry in Maui,” the spokesperson said. “The plans supported by Mayor Alan Arakawa will benefit Maui, attract a wide-range of productions, create new jobs and boost local businesses.”
Relativity’s spokesperson did not respond to follow-up questions.
The Plot Unfolds
Workers were hanging giant soundproofing blankets inside Buenger’s studio in October when Civil Beat talked to him about his feud with Kavanaugh and his quest to bring feature films and a TV series to the Valley Isle.
“There are always challenges to starting anything new,” he said. “Ours came from the most unexpected place — within the industry.”
Buenger said politicians told him he would single-handedly wreck the future of film in Hawaii if he moved forward with his plans. They urged him to stay out of the way. In an industry built on relationships, crossing Kavanaugh is not something that is done.
Relativity Media, Kavanaugh’s TV and film production empire, reports having produced, distributed or structured financing for more than 200 motion pictures, generating $22 billion in worldwide box-office revenue. It’s also a familiar name in Hawaii where three years ago the company ran afoul of lobbying laws when it delivered DVDs to lawmakers working on legislation to benefit the film industry. More recently, state officials have complained about a reality TV show the company is financing that is centered around pig hunters on the Big Island.
Maui Mayor Alan Arakawa, who considers Kavanaugh a “good friend,” said Kavanaugh is arguably the most successful film producer in the world right now whereas Buenger is just “small potatoes” at this point.
“He’s not competitive with Ryan in any way, shape or form. Any one of Ryan’s productions is worth more than Socrates’ entire investment,” Arakawa told Civil Beat in an interview this fall at his office. “But at the same time, it’s very childish to a large degree that they’re fighting with each other when if they were working together they could enhance each other’s opportunities.”
Maui Film Studios, Wailuku, October 2013.
Buenger said after he started advertising Maui Film Studios earlier this year, Kavanaugh met with local political leaders and supposedly told them “it would be a cold day in hell” before a major Hollywood production would take advantage of the new space.
“My rallying cry is let entrepreneurs be entrepreneurs,” Buenger said. “I want to bring new money in. That’s what this county needs.”
He has seen his dreams come so close to becoming reality over the past several months, only to watch them vanish — and then return. It happened in his effort to find private investors to build the studio and again when trying to secure deals for movies to use the sound stage.
Buenger blames his nemesis for scaring away several prospects, including Hollywood actors who own homes on Maui and others with close ties to Relativity.
“Kavanaugh was flexing his muscle and he killed my investing,” Buenger said.
He eventually found a silent partner without ties to the entertainment industry and got his studio built. And while “Tarzan” decided to swing over to the United Kingdom instead of shooting on Maui, Buenger has since locked in “Ethyrea,” a five-part science fiction flick with a $160 million budget.
“We’re hanging in there, just trying to dodge bullets,” Buenger said.
He’s managed to squeeze public letters of support from politicians, including Arakawa and former Maui Film Commissioner Harry Donnenfeld, as well as arrange visits from Gov. Neil Abercrombie and state legislators to help promote the studio.
“This marvelous space is going to be an absolutely fabulous attraction for many of the people, especially in Hollywood, who have told me how much they love coming to Hawaii and particularly want to come to Maui,” Abercrombie told the crowd during his stop at the studio in August.
“I think with the tax credits going and when they see the kind of talent that’s here, I can just see all of you running three or 400 yards to escape Godzilla.”
A remake of “Godzilla” was shot partly in Waikiki last July.
Roll (Tax) Credits
Arakawa and Kavanaugh have together fought for tax incentives and other publicly funded breaks for the film industry for the past few years at the Legislature. They’ve asked lawmakers to give unprecedented credits for infrastructure, production and even employment costs.
“We need new economic development and the film industry is one of the areas we feel has a huge potential for us,” Arakawa said, adding that Buenger’s studio was a good first step.
“There are others that are interested and one of them was Ryan Kavanaugh. We got to meet him and became friends and he said, ‘Hey, if you guys want to create a movie industry, that’s what I do and I’ll help you,’” the mayor said.
“So, as a friend, he started helping us, directing us — these are the rules you’ve got to get changed, these are the tax breaks you’ve got to try to get for us. That’s what we’ve been doing at the state Legislature.”
In 2011, Kavanaugh pulled out all the stops to push his $500 million plan to build studios on Maui, Oahu, Kauai and the Big Island. His primary target though was a $193 million studio on Maui, where he lives part-time, that would include 10 adjoining 18,000-square-foot stages.
He demanded tax breaks on construction, up to $25 million per project. He pushed for a 40 percent tax credit — double the current offering — on production costs to make Hawaii more competitive with Puerto Rico, Louisiana and others states trying to attract film industry dollars. And he wanted a 50 percent wage rebate on the first 900 hours employees worked as part of a film career training program.
Inside Maui Film Studios, Wailuku, October 2013.
One of the examples Relativity underscored was the $5 million it saved by filming “A Perfect Getaway” in Puerto Rico instead of Kauai. The drama was set on the Kalalau Trail on the north shore of the Garden Isle, but the commonwealth’s tax breaks meant more dollars on the bottom line so it was almost entirely shot there.
Kavanaugh assured lawmakers in a Relativity Media presentation that the new studios and tax breaks would translate to $1.6 billion in film production spending in Hawaii’s economy by 2016 — a $1.5 billion jump from what the industry spent in 2011.
High-paying jobs would be created in the isles and Hawaii would have a new economic driver, according to Relativity reps and the lawmakers who pushed the bills.
During the five-month legislative session in 2011, Relativity spent more than $200,000 wining and dining half the Legislature and handing out boxes of DVDs, iPads and other gifts.
The company later paid an $8,500 fine for violating lobbying laws.
But that’s pocket change for Relativity. This is Kavanaugh, the same person who commuted from his Malibu home to his nearby studio by helicopter until neighbors complained about the noise and lack of permits to land on a hotel’s roof.
Former President Bill Clinton, who reportedly received millions of dollars in donations to his nonprofits from one of Kavanaugh’s business partners, was even persuaded to lend his support for the proposed tax breaks. And Kavanaugh flew in celebrities from L.A. on his private jet to rub elbows with state lawmakers over a fancy meal one night at the Mandalay in Honolulu.
He’s also given thousands of dollars to state and local politicians’ campaigns over the past few years, including $4,000 to Sen. Kalani English and $500 to Sen. Roz Baker, both of whom represent districts on Maui, and $2,000 to Arakawa.
The massive effort almost worked. The legislative package plowed through committees until the end of the 2011 session when it stalled amid concerns about the overly generous tax breaks.
“Taxpayers should be insulted that lawmakers can provide breaks for film productions but refuse to provide tax relief for residents, many of whom work two or three jobs just to keep a roof over their head and food on the table,” Lowell Kalapa, the Tax Foundation of Hawaii’s president, told lawmakers in his testimony on the bill.
But Kavanaugh, Arakawa and others charged forward again in 2012 and 2013. They didn’t get half of what they wanted, but they did convince lawmakers to bump the existing production tax credit from 15 percent to 20 percent on Oahu and from 20 to 25 percent on the neighbor islands. The legislation also upped the cap on the credit from $8 million to $15 million.
The bill’s passage came over the objection of the Hawaii Department of Business, Economic Development and Tourism, which testified that the state could not support an increase in the base credit to 20 percent. The agency estimated that, conservatively, the extra 5 percent credit would cost the state $5.25 million.
Hawaii Council on Revenues Chair Kurt Kawafuchi told lawmakers Dec. 18 that the new law is estimated to raise the annual cost of the tax credit by about $21 million over the level in fiscal year 2013, which ended June 30.
Staying Competitive
Buenger described Kavanaugh’s reach in Hawaii as “enormous,” but doesn’t want to demonize him.
“He is who he is … an aggressive Wall Street investor,” Buenger said.
“For me, the question is why is the mayor dancing with this guy? There’s no one in the state, politically wise, that has anything nice to say about Ryan. Only Maui’s mayor and Maui lawmakers.”
Arakawa considers his close ties with Kavanaugh, who was chair of the Mayor’s Kokua Ball fundraiser in March, to be a misnomer.
“If his company comes in and wants to do something, he may take advantage of (the tax credits), but it’s competitive,” the mayor said. “He’s not asking for a special break. He never has.”
Socrates Buenger, inside a trailer at Maui Film Studios, Wailuku, October 2013.
Hawaii State Film Commissioner Donne Dawson doesn’t expect to see a big push in the 2014 legislative session for more tax breaks — at least from her office. She said at best there might be some housekeeping measures with the current credit.
The initial tax credit, which started in 2006, has helped bring in “Tropic Thunder,” “Indiana Jones,” “Pirates of the Caribbean,” “Battleship” and “The Descendants” along with other major films and TV series.
The new law is retroactive, so even though it was signed in June it became effective Jan. 1. That means it can benefit films like Cameron Crowe’s still-untitled Hawaii project and Tim Burton’s “Big Eyes,” which were shot this year, not to mention the Relativity-backed reality TV show “American Jungle.”
Reporter Ian Lind wrote in his Dec. 4 piece for Civil Beat that state investigators are probing whether “American Jungle” violated state rules and regulations while filming. The episodes broadcast so far have included scenes of night hunting, which is prohibited by state law, and hunting down a cow with spears and dogs.
In November, the Hawaii Department of Land and Natural Resources called the show “inaccurate, offensive and potentially illegal.”
Rather than fight for more tax breaks, Dawson said she plans to ask the Legislature for $250,000 in marketing and operational funds to help her office manage an increasing volume of work.
“The compelling argument is that we only have $50,000 to market the industry now yet our industry pumps more than $200 million annually into the state’s economy,” she said.
“It is a highly competitive industry worldwide,” she added. “Hawaii needs to maintain its competitive edge if we are going to grow this industry and if it is going to continue to have a meaningful impact on our economy.”
Dawson also wants to establish a special fund that would allow the film office to capture the rent money generated from the state film studio at Diamond Head, which is in dire need of repair and maintenance. “Hawaii Five-O” started shooting this year on its 16,000-square-foot sound stage, taking over the space ABC occupied while filming “Lost,” “The River” and “Last Resort.” On Monday, Gov. Neil Abercrombie announced he was releasing $3.46 million in capital improvement funds to pay for new construction at the Diamond Head studio, including a new production and multipurpose building.
The new Maui film commissioner, Tracy Bennett, said there’s a reason people are leaving L.A. in search of work — no tax incentive. He spent 17 years in the industry as a photographer, leaving Tinseltown to join a union in Louisiana before landing in Hawaii.
He was picked in November to be the new commissioner after Donnenfeld abruptly quit. The mayor won’t say why he left, calling it a personnel matter. The selection committee, which included Buenger, was headed by Arakawa’s communications director, Rod Antone.
The selection of Bennett, who brings years of strong connections to key players in the industry, has been heralded by political leaders, Buenger and the state film commissioner.
Bennett wants to help Buenger’s studio expand with a second phase and look for additional studio space through other potential investors — namely, billionaire Oracle CEO Larry Ellison.
Ellison, who owns virtually all of Lanai, has shown interest in building sound stages on the island, according to Arakawa. Bennett also wants to reach out to Ellison’s kids, who are making their mark in Hollywood with films like “Zero Dark Thirty.”
Film industry officials like Dawson and Bennett have had to deal with the conflict between Kavanaugh and Buenger — real or not.
Bennett said he has made a point to stay out of it. He wants to direct his energy to his new position and give back to the community.
Dawson hasn’t been able to avoid the purported feud very easily. Speaking publicly in October before the Native Hawaiian Chamber of Commerce, she said she was asked whose side she was on. She replied that she wasn’t on anyone’s side but the state’s and was trying to grow the industry here.
Seeing the Boogeyman
Arakawa said there are many different efforts being made to create a new economic engine for Maui that are slowly coming together. He thinks Buenger’s conflict with Kavanaugh may have no basis in reality.
“Socrates seems to think that Ryan is trying to submarine his operation because Ryan wants to build a film studio, and it’s been his mantra and goal to try to stop Ryan from hurting him in his endeavor,” Arakawa said.
The mayor said Kavanaugh no longer wants to build a film studio.
“He makes movies, he doesn’t run film studios,” Arakawa said of Kavanaugh.
The mayor said he understands Buenger’s protective nature though because he’s relatively new to the industry and wants to be the only game in town.
Inside Maui Film Studios, Wailuku, October 2013.
“When you’re taking the biggest risk in you’re life, there’s a tendency to be jittery and you see boogeymen in every place. That’s where he’s at right now,” Arakawa said.
The mayor has known Buenger for years, personally and professionally. He’s played poker at the mayor’s house and from August 2006 to January 2007 he served as his executive assistant.
Ellison is probably going to do something on Lanai, Arakawa said, and other companies will likely want to come in and do film production on Maui too.
“Whoever wants to come in, we’re going to welcome them,” he said.
When Buenger gets his first couple big film productions signed in, the mayor said, Buenger will feel more comfortable and the feud with Kavanaugh will disappear.
“Even though it’s imaginary, as far as I’m concerned, I’m still trying to make him feel comfortable,” Arakawa said, referring in part to his decision to appoint Buenger to the film commission selection committee earlier this year.
“Sooner or later, he’s going to realize if Ryan wanted to take him out, Ryan could’ve taken him out very, very easily, but he’s not,” Arakawa said. “Five years from now, we’ll probably sit back and laugh at it.”
