PROVIDENCE – The R.I. Economic Development Corporation continues to work on the terms and conditions of a potential agreement that would bring Curt Schilling’s video-gaming company, 38 Studios LLC, to the capital city in exchange for a $75 million loan guarantee from the state.
The 12-member EDC board of directors, including Gov. Donald L. Carcieri and EDC Director Keith W. Stokes, met behind closed doors in executive session for nearly two hours Thursday morning to discuss details of the proposed arrangement, which officials have said could bring as many as 400 new jobs to the state paying annual salaries in the range of $72,000.
Your Business Has Gone Global. Has Your Insurance?
A decade ago, “doing business internationally” was mostly a large-company concern. Today, a manufacturer in…
Learn More
Stokes after the closed session told the media that while the EDC board did make recommendations to revise the terms and conditions, he could not reveal the nature of the changes. But he said the final proposal will go before the EDC board July 26 for what is likely to be the deciding vote. Details would be made public at that time, he said.
The state’s Open Meetings Law allows private discussion relating to a company’s relocation here.
One new fact that Stokes revealed is that Schilling, a World Series MVP when he pitched for the Boston Red Sox, is investing some of his own funds in the plan to bring 38 Studios to Providence, but again, Stokes would not elaborate.
In response to news reports that Massachusetts wants to keep 38 Studios, now located in Maynard, Mass., and outside Baltimore, Stokes said: “We’re not interested in Massachusetts.” He noted that Schilling approached Rhode Island officials because he has been impressed by reports about the capital city’s renaissance and wanted to relocate here. Also, Stokes suggested, the Bay State does not have a $125 million loan guarantee program as Rhode Island does.
Stokes, as he has several times in recent weeks, once again stressed that the approval procedure for 38 Studios is no different than for any other company that receives a loan guarantee from the state.
“There is nothing unusual here,” he said. What is different, he said, is the “size and scope” of the project, but he insisted that involvement of a well-known athlete is not at all a factor in EDC deliberations. The EDC is concentrating on such factors as risk mitigation, proper collateral and job creation targets, Stokes said. “This has nothing to do with Curt Schilling,” Stokes said. “It has to do with jobs, high-skilled, high-waged jobs.”
Robert I. Stolzman, legal counsel to EDC, also maintained there is nothing unusual in the deal. He said EDC board members during closed session engaged in “normal pre-bond discussions,” centering on such topics as interest rate analyses, risk analysis and collateral arrangements.
Between now and the next meeting of the board July 26, Stokes said the EDC will modify the terms and conditions in accord with the recommendations the board made this morning. He declined to say what the time frame would be and when, for instance, 38 Studios might be open for business in the Ocean State. But he noted that the major issue he sees is the state’s high unemployment rate and the fact that more than 70,000 Rhode Islanders are without jobs. The state’s unemployment rate in May was 12.3 percent, but new numbers as of June are due out Friday.
Stokes said the people of Rhode Island want their government officials to take action to resolve the unemployment crisis and that is exactly what he and the EDC are trying to do. “We are taking a risk,” he acknowledged, “but it’s a calculated risk.”
Not everyone is enamored by the deal.
Henry A. “Bud” Violet, president of Ocean State Business Development Authority, a private nonprofit alternative lender that provides business loans ranging from $200,000 to $10 million, called the 38 Studios plan “economic development on steroids.”
“Even if this were an experienced company with historical financial statements, no lender would ever make this loan,” Violet said.
No 38 Studio representatives were at today’s meeting.
We have cash strapped companies in Rhode Island that with loan guarantees wouldl have a greater economic impact on the state wiith much lower risk. Bob Chew, Alteris Renewables.