COURTESY R.I. EDC
SHINING EXAMPLE: After decrying large corporate incentives,, Gov. Lincoln D. Chafee, left, came on board for a $1 million grant to Toray Plastics to build a solar power array backed by EDC Executive Director Keith W. Stokes, right. With the two at the unveiling of the array are Toray president and CEO, Richard Schlosser, second from left, R.I. Senate President M. Teressa Paiva Weed and URI President David M. Dooley.
When Keith W. Stokes left the Newport Chamber of Commerce in early 2010 to take a temporary appointment as head of the R.I. Economic Development Corporation, he had a knotty tangle on his hands. The agency was leaderless – having just been rejected by an out-of-state candidate who had been offered the job to run it – disarrayed, demoralized. And the fall 2010 elections soon would throw a new untested governor into the mix.
By the end of 2011 and almost a year into Gov. Lincoln D. Chafee’s term, many small course corrections, and acts of accommodation and persuasion by Stokes and others have combed out much of the tangle and put the EDC on a clearer trajectory.
The new governor took up the gavel as chairman of the EDC board in January 2011 intent – based on his stated beliefs – on changing its course. Chafee’s priorities: fewer economic-development incentives, especially for untested startups; more emphasis on helping smaller urban core businesses. This contrasted with a Stokes-led board under previous Gov. Donald L. Carcieri that had garnered headlines for its $75 million loan guarantee to 38 Studios LLC, a Massachusetts video gaming enterprise that had yet to sell a single product, a deal that Chafee had criticized during the gubernatorial campaign.
As the new EDC board chairman, Chafee kept Stokes on (even as four board members were shown the door). But as 2011 evolved, the EDC took on a more collaborative ethos.
Stephen Lane, co-founder and CEO of medical device maker Ximedica and member of the EDC board, said Stokes is not afraid to put diverse people around the table and then step out of the way and trust that good ideas will rise. Lane, says Stokes, knows how to lubricate the gears as ideas grind together, and is good at finding moments of balance.
Stokes accommodated himself to Chafee’s priorities, quickly outlining plans to provide services to smaller urban businesses, less a change of direction he said than an acceleration of existing plans. “He understands what the governor is looking for and how the governor operates,” Lane said.
As 2011 ticked on, Stokes said the relationship between Chafee and the board was evolving, with all parties offering some give and take. “What I saw the governor do … is he’s listening to his board,” Stokes said in August.
But Stokes’ belief in the efficacy of incentives like grant and loan guarantees – what Chafee characterized as “deals”– remained very much in play. For instance:
n In August, the EDC granted Toray Plastics (America) Inc. $1 million to build a solar power array at its North Kingstown facility, part of an effort to induce the company to expand operations in Rhode Island.
n Also that month, the EDC approved a $1.5 million loan guarantee for NuLabel Technologies, a local startup, from the same Job Creation Guaranty Program that had given the controversial nod to 38 Studios. Two months later, the board approved a $4 million loan guarantee for The Corporate Marketplace Inc., an information technology company that runs incentive programs.
n Also in October, Stokes announced a $13.1 million award from the federal State Small Business Credit Initiative, with $9 million going to the Slater Technology Fund for seed-stage investments, $2 million to startup incubator Betaspring for new small business formation, and the remaining $2.1 million to the EDC’s Small Business Loan Fund.
Lane, the board member, noted, “I have seen the governor move toward supporting tools – like general economic-development incentives — that are pretty standard now in any place you go.” It’s a path difficult to imagine without Stokes at the EDC’s helm. •
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.I. Economic Development Corporation,
38 Studios LLC,