Deluxe Laboratories Sets Israel Production Facility

In anticipation of the Israeli government offering new tax incentives for foreign filmmakers, California-based Deluxe Laboratories is to set up a film-production facility in the Atarot district of Jerusalem.

Eyal Rosenfarb, the company's local representative, announced that he and his two partners, U.S. cinematographer Adam Greenberg and his brother Jan, are planning to invest $10 million in the facility to serve the local and regional film industries as well as foreign productions shooting in the region. The facility, the most advanced in the Middle East, will offer various postproduction facilities by 2001.

"There is no other world-class lab in the Middle East," Rosenfarb said. "We intend to establish one here with the reputation, experience and knowledge of Deluxe."

Rosenfarb pointed to two factors influencing the decision to invest after a decade that has seen very few foreign productions shoot in Israel.

"We believe the security situation is going to improve. We also think the Israeli government will change the tax rules to help American producers to shoot here. This will make Israel a more attractive place to film."

But Shlomo Sternfeld, director of the Trade and Industry Ministry's Film Center, sounded a cautionary note.

He confirmed that Minister Ran Cohen, unlike his predecessor, Natan Scharansky, a friend of the Israeli film industry, is studying both the Canadian tax-rebate system and European tax shelters. He then intends to consult film producers and finally decide which incentive system would be more advantageous to Israel. Israel currently offers no financial incentives to foreign productions to shoot here.

But Sternfeld warned that Treasury approval -- if indeed forthcoming -- for either plan is at least six months away.

Sternfeld further insisted that Deluxe Israel will not get the $2 million government assistance it is seeking as an Approved Enterprise unless Deluxe U.S. takes a minimum 25% stake in the local company.

"The Deluxe name, and training of Israelis in how to run such a lab are not enough. I want to see Deluxe as a shareholder."

Deluxe already has sister companies in Toronto, London and Rome.