Kevin Houser and other saints look to recoup investments

I was right.

from the TP

BATON ROUGE -- Kevin Houser, a veteran Saints football player who was just released from the squad is trying to get back money that he and other team members invested in an Elmwood motion picture studio, representatives for the player and the film company said Tuesday.

Houser, who for nine seasons was the longsnapper for punts and field goals, was released Monday and replaced with former Carolina Panthers player Jason Kyle in a move that puzzled fans and observers.

Houser put a "very significant" amount of money into Louisiana Film Studios, and others with the team followed that lead hoping to reap a financial benefit that has not materialized, his attorney Rob Couhig said.

Studio Chief Executive Wayne Read said the project has had trouble qualifying for state tax credits to boost its finances but that in any event, the investors will be repaid. He said Houser was involved in helping to raise investment dollars for the project.

"Everyone's going to be made whole, " Read said.

Also, a construction company owned partly by Houser's wife, Kristen Houser, did contracting work for the studio and has not been paid in full, her attorney Jimmy Castex Jr. said. The company and its subcontractors began work in January and are owed about $681,000 by the studio and Read, Castex said.

Saints officials would not talk about the impact that the investment controversy has had on the team, player relations or Houser's position.

"We are not privy to any of our player's individual investments, and as a policy we do not comment on such matters, " Saints spokesman Greg Bensel said.

Elmwood complex

Houser's expectation was that the project would be awarded state tax credits for development of the studio and that those credits would be transferred to the investors by the end of March, Couhig said. There were no "ifs, ands or buts about it, " Couhig said.

Louisiana Film Studios has applied for state tax credits but has not submitted the audited accounts of expenditures required to receive them, according to state records. The studio also has missed a critical deadline to qualify for the credits, records show.

Louisiana Film Studios is set in a large complex in Elmwood that formerly served as a warehouse for Winn-Dixie grocery stores. The studio has been upgrading the facility and has provided space for shooting the adventure film "Dead of Night" and the Sylvester Stallone action movie "The Expendables, " which is wrapping up production at the site this week.

The property is owned by developer George Ackel and a trust for the children of John Georges, head of a major retail supply business and a former candidate for governor, Ackel said. The owners are collecting rent from the tenant and have an agreement with the studio firm to sell the property, but the transaction has not taken place, Ackel said. The property owners are not involved in the operation or financing of the studio project or the tax credits, Ackel said.

Read said an important financial step for the studio would be to acquire the property and that he is trying to work toward that goal.

Attractive to athletes

Investments in movie studios and other filmmaking infrastructure in Louisiana have been eligible for state tax credits valued at 40 percent of qualified expenditures. The program is being phased out. A similar program, which is being made permanent, offers tax credits for the cost of producing films and videos. That program has been credited with placing Louisiana as one of the top film-making destinations in the nation.

At a cash discount, the credits can be traded to individuals or companies wanting to offset tax liabilities. The credits often have proved to be a good investment, and many professional athletes in New Orleans have used income tax credits as a way to offset taxes on their salaries.

Had Houser acquired the tax credits after they were approved by the state, his investment would have been secure. Once tax credits are fully authorized by the state and transferred to purchasers, they cannot be taken back.

But following a practice that frequently has helped provide up-front financing for various movie projects in Louisiana, Houser and others advanced money for the studio development even though tax credits had not been approved and much of the spending to qualify for those credits had not happened.

Tax credits are not permitted to be "pre-sold" before authorization, but that does not necessarily prevent deals in which investors put money at risk to back a movie project based on the expectation that tax credits can be acquired at some point in the future.

Missed deadline

According to the state film office, Louisiana Film Studios, which was once known as Mardi Gras Studios, started as a $62 million proposed project and in November reduced the scope to $45 million. That included $15 million for the acquisition of the property and $28 million in renovations.

Had the studio spent that money and received authorization, it would have been eligible for $18 million in tax credits. The studio would have had to show audited statements to demonstrate it had made the expenditures. Those documents have not been submitted to the state film office.

The studio also was supposed to have spent at least half of the $45 million by the end of 2008 to qualify for any credits. The studio did not meet that goal, but it might be possible to work out another arrangement with the state or to find some relief in legislation on tax credits just passed in the state Legislature, Read said.

Read said studio officials are examining the new laws to see whether the project has more time to comply.

Couhig said Read has been saying that the players would get their investment back. But the studio has not delivered on those promises and is losing credibility, Couhig said.