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RI Commerce Spends Two-Thirds of its $12M in Contracts with Out-of-State Companies

Monday, June 19, 2017


Under Governor Gina Raimondo, the agency in charge of building Rhode Island’s economy has spent 65 percent of its contract dollars with out-of-state companies in the last two years.

Nearly $8 million of taxpayer dollars went to consultants as far away as New York, Toronto, London, and Frankfurt under the Rhode Island Commerce Corporation. Even the money spent on porta-johns contracted for Volvo races went to out-of-state interests by an overwhelming margin. 

According to a GoLocal investigation, over $164,000 went to United Site Services NE Inc., a Massachusetts-based company, for the Newport sailing event - and there are a number of Rhode Island-based companies. One Rhode Island company, Hallman Septic Svc. & Portable Toilets LLC, received payments for $67,500.

Havas Got as Much as All of Rhode Island

No companies scored more consulting dollars than consulting businesses located in New York. Havas, the public relations firm that oversaw the development of the tourism campaign that included the now infamous promotion video for Rhode Island that included footage from Iceland,  received payment in the past two years more than $4 million — $4,114,025.78 according to data provided to GoLocal from Commerce.

Havas has been paid nearly as much as all Rhode Island contracts combined during the past two years.

Of the 136 contracts let by Commerce, Rhode Island-based companies received just $4,482,234.48 of the $12,475,469.90 in the past two years.

Commerce has sent more than $6M to NY-based firms

It appears that Commerce "loves New York" as the New York City area received contracts from Commerce that top more than $6 million -- more than 25 percent more than RI-based companies.

Governor Gina Raimondo is the Chair of Commerce Corporation

Commerce’s Mission

According to the mission statement of the agency, “The Commerce Corporation works with public, private and non-profit partners to create the conditions for businesses in all sectors to thrive and to improve the quality of life for our citizens by promoting the state's long-term economic health and prosperity.”

However, the spending pattern of the agency shows that the contracts go to research firms all over America and the world — some with specialties similar to Rhode Island firms.

As examples:

KBC PR & Marketing Ltd. - The London-based travel and tourism public relations firm was paid $16,111.07.

Charles Pinkerton/The Mechanism — The New York-based digital media firm whose mission is “to help our clients communicate with authenticity and empathy to their users across all digital channels and media types” was paid $200,000.

Peoplesworth  - The Concord, MA firm "helps people who lead organizations discover greater creativity, spirit, and harmony in their workplaces through training and consulting services” and was paid $4,500.

Longwoods International — The Toronto-based tourism data company, which conducted the base-line research for the tourism effort was paid over $142,000. Longwoods' payments was up and beyond the over $4 million paid to Havas, approximately $1 million paid to Epic Decade, hundreds of thousands paid to Milton Glazer for the infamous “warmer and cooler” tagline and logo, $200,000 paid to Charles Pinkerton/The Mechanism, and a few hundred thousands to range of other firms for tourism services.

Editor's Note: Some of the data provided by Commerce does not match with previous released data. According to the data secured by GoLocal for contracts, Milton Glazer's firm which designed the "warmer and cooler" logo is listed for payments totaling $200,000. Previously, GoLocal has reported that the firm was paid $400,000 according to Commerce. It is unclear why Commerce has provided two different numbers.


Related Slideshow: National Press Critique RI’s Embarrassing Tourism Campaign - 2016

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New York Times

A world-renowned designer was hired. Market research was conducted. A $5 million marketing campaign was set. What could go wrong?

Everything, it turns out.

The slogan that emerged — “Rhode Island: Cooler and Warmer” — left people confused and spawned lampoons along the lines of “Dumb and Dumber.” A video accompanying the marketing campaign, meant to show all the fun things to do in the state, included a scene shot not in Rhode Island but in Iceland. The website featured restaurants in Massachusetts.

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Boston Globe

After the slogan’s unveiling, the blunders just kept coming. A promotional video to accompany the campaign included a shot of a skateboarder in front of a distinctive building that turned out to be the famous Harpa concert hall, located almost 2,500 miles away, in Iceland.

The new website erroneously boasted that Little Rhody is home to 20 percent of the country’s historic landmarks. And officials needed to remove three names from its restaurant database, after realizing the information was so outdated that two of the restaurants aren’t open right now.

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City Lab

“Cooler & Warmer.” It took me roughly 30 minutes of reading about Rhode Island’s new tourism catchphrase to realize that “cool” is a double entendre—as in, the occasional temperature of the Ocean State, but also “hip and awesome.” And I still didn’t quite get it? This was not a good sign. I may be dense, but lordy, was I not alone.

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The Rhode Island Tourism Division had to pull its latest video shortly after it was posted online Tuesday because it contained footage shot in Iceland. The three-second scene in question shows a man doing a skateboard trick outside of the Harpa concert hall in Reykjavik, the country’s capital.

IndieWhip, the company that edited the video, and the Rhode Island Commerce Corporation, which hired the firm, have apologized for the error. “The footage in question is of a Rhode Island skateboarder, filmed by a Rhode Islander,” IndieWhip added in a statement.

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A Big Price Tag Puts a Target on Your Back. Rhode Island spent a reported $550,000 to develop the “Cooler & Warmer” campaign. Development costs for the Florida and Washington campaigns cost $380,000 and $422,000, respectively. That’s before the first piece of media was ever purchased.

My advertising agency brethren will argue you have to invest money at the start of the campaign to “get it right.” But from my perspective, the above numbers seem exorbitant for a program built on public dollars. And in each case, an angry electorate agreed.

Creating a great “place marketing” campaign is a difficult job. Don’t make it more difficult by ignoring the lessons from states like Rhode Island, Florida and Washington.


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