|
Chafee proposes new rules, limits on state's loan-guarantee program
PROVIDENCE, Sep 02, 2010 (The Providence Journal - McClatchy-Tribune Information Services via COMTEX) --
Having stated his opposition early and often to the state's promise of a $75-million loan guarantee to former Red Sox pitcher Curt Schilling's video-game venture, gubernatorial candidate Lincoln D. Chafee is proposing a new way of choosing future recipients of the state's loan-guarantee program.
On Wednesday, Chafee rolled out a "10-point plan to leverage the $125-million Rhode Island Loan Guaranty Fund to maximize job creation while limiting taxpayer risk ... through diversification."
Under his proposal, for example, "a designated percentage of the Rhode Island Loan Guaranty Fund will be reserved exclusively for promising small businesses," and the guarantees would be capped at $6.25 million.
As Chafee sees it, the state-run loan guarantee program should target support for "50 or more new or existing businesses," and with a "possible equity stake and board position" for the state in each target company being supported by the program.
To limit risk of taxpayer money, his plan also states that: "No single business would be eligible to receive a guaranty in excess of 5 percent -- or $6.25 million -- of the $125-million fund, absent compelling business and job creation reasons to exceed that general cap."
In a statement issued by his campaign on Wednesday morning, he said: "I will work with the General Assembly and the business community to enact the necessary legislative changes to accomplish my job creation objectives for Rhode Island. My plan has a single goal: to create more high-paying jobs for Rhode Island."
He said his proposed overhaul of the loan program created in the waning hours of this year's legislative session would "be guided by three overriding principles: (1) encouraging and rewarding job creation; (2) investing in management and/or businesses with a proven track record of success; and (3) limiting taxpayer risk through diversification and an open and transparent process."
The selection process that he proposes would begin with "a nationwide business plan competition (similar to a Request for Proposal process) that solicits innovative job-creation proposals from compelling businesses and entrepreneurs interested in establishing, relocating or expanding their business in Rhode Island."
He said he would encourage state economic development officials to "recruit Rhode Island companies and local entrepreneurs to participate" in the "open, public and transparent Rhode Island business-plan competition," and "depoliticize and professionalize the jobs plan competition by involving leading organizations such as the Greater Providence, Central Rhode Island, Newport, Blackstone Valley and other area Chambers of Commerce, the state's public and private universities and other jobs-centric private and public institutions ... [in] the business-plan competition review and analysis."
In his proposal, Chafee also talks about target industries, such as health and life sciences, and "businesses that can maximize existing government investment at the new Station District at T.F. Green Airport in Warwick."
He said the program should also "make a special effort to support female- and minority-owned businesses in the loan-guarantee awards."
Soon after, Moderate Party candidate Ken Block's campaign manager accused Chafee of pawning off Block's proposal as his own. The proposals are not, in fact, identical. Block calls, for instance, for a $5-million cap and private matching dollars.
"While we applaud Mr. Chafee's endorsement of Ken Block's Rhode Island R.E.D. (Real Economic Development) plan, we wish he had enough integrity not to sell it as his own. This is just another example of recycled politicians with no substantive ideas of their own trying to mislead the voters in Rhode Island."
Chafee, a Republican-turned-independent, offered his plan on the day after his leading opponent -- state treasurer and Democratic candidate for governor Frank T. Caprio -- reversed his earlier position on the Schilling deal, and came out against it. Having described himself earlier as a "cheerleader" for the success of Schilling's 38 Studios LLC. Caprio said he had asked both the two big national bond-rating services, Moody's and Standard & Poor's, to suspend their reviews of the proposed Schilling deal until a new governor takes office.
The deal between the state and 38 Studios is to be financed by the sale of revenue bonds issued by the state's Economic Development Corporation. The bonds would be purchased by private investors, who would be repaid by 38 Studios.
But if the company could not pay, the state would be responsible for the debt. In return for the loan guarantee, 38 Studios has pledged to move its headquarters from Maynard, Mass., to Rhode Island and bring 450 jobs to the state by the end of 2012.
A campaign spokesman for Caprio said the more the state treasurer learned about the deal, the more concerned he became.
kgregg@projo.com
To see more of The Providence Journal or to subscribe to the newspaper, go to
http://www.projo.com. Copyright (c) 2010, The Providence Journal, R.I.
Distributed by McClatchy-Tribune Information Services. For more information
about the content services offered by McClatchy-Tribune Information Services
(MCT), visit www.mctinfoservices.com, e-mail services@mctinfoservices.com, or
call 866-280-5210 (outside the United States, call +1 312-222-4544).
[ Back To greentechnologyworld.com's Homepage ]
|
