Postcard from Detroit

Peter Gallagher, the caterpillar-browed actor best known for the TV show The O.C. and films like While You Were Sleeping, is standing on a street corner, cell phone wedged against his shoulder, simultaneously trying to maintain an animated conversation and order a hotdog from a street vendor. Commuters push past him on the sidewalk, and in the background, yellow taxis fight their way through traffic.

It's a picture-perfect New York City moment, and it's only after the director yells "Cut!" that you'd notice that the façade over Gallagher's right shoulder is in fact the 100-year-old Ford Building in downtown Detroit. This scene, along with every other from the legal drama Betty Anne Waters, starring Hilary Swank, is being filmed in Michigan, the new Hollywood of the Midwest.

Other states, including New Mexico and Louisiana, have long wooed producers with tax incentives. And for a few years, it seemed as if every "New York" movie was filmed in either Vancouver or Toronto. But the Canadian exchange rate doesn't favor Hollywood anymore, and Michigan's tax rebate of up to 42% for productions that hire locally is the most generous in the country. Nearly 70 movies — including Clint Eastwood's 2008 hit Gran Torino — have been shot or been scheduled to be filmed here since the state passed its tax breaks last April. In 2007 film crews spent about $4 million in Michigan. Last year that figure was more than $100 million, and it could quadruple in 2009. (See pictures of Michigan's film industry.)

With two of the Big Three automakers on the verge of collapse and Detroit's unemployment rate a staggering 22%, the film industry is providing a rare economic boom. Community colleges now offer courses in set-building and stage-lighting for the out-of-work construction workers and electricians. Car-rental companies, caterers, hotels, carpenters, dry cleaners and other service providers are all getting a needed boost. In the suburb of Troy, 20 miles (32 km) north of Detroit, one hotel was getting ready to cut staff when Gran Torino came to town. Instead of laying people off, the hotel ended up hiring 15 additional employees. (See the 100 best movies of all time.)

The tax incentives are in part the brainchild of Jim Burnstein, a screenwriter who teaches in the University of Michigan's Film and Video Studies Program. He grew tired of watching his students decamp for New York City and Los Angeles on graduation. The Michigan Film Commission, of which Burnstein is a member, had been "looking into how to attract Hollywood," he says. "But this wasn't just about bringing money into the state. It was a matter of the taxpayers we were already losing." Tena Constas is one of those prodigal Michiganders, a location scout for Betty Anne Waters who recently moved back after five years in Chicago. One of the draws? "Everything costs less here," she says. Constas bought a three-unit house and rents out two of the flats to visiting crew members. She even made some extra money when the director of an HBO pilot set some scenes in her apartment. But she says Michigan's appeal as a location goes beyond the dollar value. "It can double for almost anything. You can make one of the lakes look like an ocean. You can do rural. You can do gritty urban." (In Betty Anne Waters, the state also stands in for Boston and part of Rhode Island.) Shooting in Michigan can mean fewer headaches as well. "To shut down major Chicago streets or take over an office building on a weekday? It's unheard of," she says. Betty Anne Waters producer Andrew Sugarman agrees. "This is as good as it gets in terms of U.S. locations," he says. "Strangers come up to us while we're shooting and say, 'Thank you for coming here.' That's never happened before."

Sugarman had only one concern about filming during a Michigan winter: snow. Even on that front, however, the state has cooperated; after three months of record-high snowfall, the eight weeks of production were precipitation-free. Still, on a frigid first day of spring, it's not hard to spot the Los Angeles — based crew members working the shoot on these Detroit streets. They're the ones huddled in their matching parkas, shivering.

See pictures of the remains of Detroit.

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