General Assembly’s EDC reforms add complexity

By Patrick Anderson
PBN Staff Writer

Rhode Island lawmakers overhauled the R.I. Economic Development Corporation this summer more than a year after the agency’s ill-fated $75 million investment in 38 Studios LLC collapsed. More

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ECONOMIC DEVELOPMENT

General Assembly’s EDC reforms add complexity

By Patrick Anderson
PBN Staff Writer

Posted 8/5/13

Rhode Island lawmakers overhauled the R.I. Economic Development Corporation this summer more than a year after the agency’s ill-fated $75 million investment in 38 Studios LLC collapsed.

Now state officials are looking at another 18 months, or more, of debate over whether those changes have improved economic policymaking in the state or confused it further.

Last month, EDC officials and Gov. Lincoln D. Chafee began wrestling with the practical implications of the package of economic-development laws passed by the General Assembly at the beginning of the month.

At minimum, the new laws have assigned a significant amount of new administrative work for state officials and created a number of new advisory boards as they bulk up strategic economic planning.

“It is very convoluted, very difficult to understand until we get through all the detail,” EDC Executive Director Marcel A. Valois, told the board of dtirectors at a recent meeting. “We don’t know how all these things interrelate. Our role is to define how we make that work comprehensively.”

Chafee, who opposed the most far reaching of the EDC reform bills, called the bureaucratic structure put in place a “spider web of responsibility.”

“Unfortunately, 38 Studios is responsible for this,” Chafee said at the meeting. “It’s a shame.”

Although he wasn’t able to stop lawmakers from making changes to the state’s economic development apparatus, Chafee was able to convince them to stagger implementation of the changes and hold off on the biggest moves until 2015.

“It’s possible,” Chafee said when asked if some of the recent EDC changes would be amended before ever going into effect. “We did push it off till 2015. I was adamant about that – a new board here, let us get our feet on the ground.”

The most significant and controversial change pushed back to 2015 is the creation of an Executive Office of Commerce to absorb the current EDC along with state’s business regulation department, and housing and community development functions.

The new office would follow, at the start of next year, the re-naming of the EDC the R.I. Commerce Corporation, which will remain a quasi-public agency with similar functions, but with mandatory annual reporting to lawmakers.

Assuming the law is not amended, the new commerce secretary to be named in 2015 will become the CEO of the Commerce Corporation, but a new COO will be hired to handle day-to-day operations. The addition of an additional bureaucrat was one of Chafee’s primary objections to the bill during the year.

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