Playing Hardball: Mass. Tries to Keep Schilling Company
Wednesday, July 14, 2010
Massachusetts state officials are trying to keep the former Red Sox pitcher and his company, 38 Studios, LLC, in the Bay State.
“Job creation and retention is a top priority for this administration, and we have actively engaged with 38 Studios as we have with hundreds of other companies that are looking to move or expand here,” said Kofi Jones, a spokeswoman for the Secretary of Housing and Economic Development, Gregory Bialecki.
It’s a high-profile tug of war between the two states and Rhode Island is hoping to pull Schilling and his business to Ocean State with the promise of $75 million in loan guarantees. The money would be loaned to 38 Studios by private banks and backed up by the state Economic Development Corporation, according to EDC spokesman Melissa Chambers.
The loan guarantee is part of a new $125 million program that the Rhode Island General Assembly created last session to help businesses expand or move to the state. The program is geared toward businesses in the knowledge or technology sectors.
What Massachusetts Is Offering
Massachusetts does not have an equivalent program, but it does have plenty of other things that make it a magnet for businesses like Schilling’s, according to Jones.
She said the state has the highest concentration of video game companies in the region—including Harmonix Music Systems, known for its Rock Band games, and Turbine, Inc., creator of The Lord of the Rings Online. Plus, colleges like the Massachusetts Institute of Technology and Worcester Polytechnic Institute crank out graduates trained to work in the field.
And, while Massachusetts may not have a loan guarantee program quite like Rhode Island’s it has a whole arsenal of other programs that make it all the more appealing for businesses to put down roots in the state, including an investment tax credit for businesses that create jobs, according to Jones. But she declined to specify which of those programs the state would use to hold on to 38 Studios.
Decision Could Be Tomorrow
Who wins the bidding war over Schilling could be decided as early as Thursday, when representatives of 38 Studios will meet with the board of directors for the Rhode Island Economic Development Corporation to review the terms and conditions of the $75 million loan guarantee.
Chambers said the arrival of 38 Studios would help Rhode Island draw other similar businesses and keep college graduates in the state.
And she sought to downplay all the publicity the deal has generated because of Schilling's involvement. “This isn’t about Curt Schilling. This is about 38 Studios,” she said. “They have a whole positive vibe ... environment that will keep students in Rhode Island.”
If 38 Studios makes the move, she said the state estimates it will result in more than 450 new jobs for the Ocean State by the end of 2012.
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8:34am on Wednesday, July 14, 2010
Explain this to me...Anyone who knows the technology sector well, and has charted the growth of companies in that sector, knows for a company to triple it's size in 1-2 years is, well, very unusual. I would be very surprised if this company (which is the highly competitive area of gaming) will see that kind of growth. Then what? What if the company comes here and doesn't see its growth jump from 150-450 in that time? What recourse does the state have? Promises of growth have happened before. Heck, just look at the small business loan program the banks of this state were supposed to participate in--they never made the loans in the 10's of million they were supposed to make to our state's small businesses that they promised, and the state had no recourse.