THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Mass. officials want Schilling firm to stay put

Curt Schilling will meet Rhode Island officials. Curt Schilling will meet Rhode Island officials. (Bill Greene/Globe Staff/File)
By Hiawatha Bray
Globe Staff / July 13, 2010

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State economic development officials hope they can persuade former Red Sox pitcher Curt Schilling to keep his video game company, 38 Studios LLC, in Massachusetts — despite loan guarantees being offered by the state of Rhode Island.

On Thursday, 38 Studios, which is based in Maynard, will meet with the Rhode Island Economic Development Corporation to discuss up to $75 million in loan guarantees in exchange for moving the company to that state. For months, Schilling has urged Massachusetts to offer tax breaks to video game developers, saying he would prefer to remain in Massachusetts, but that he’d be willing to move 38 Studios to another state that would offer financial incentives. Yesterday, a 38 Studios spokeswoman said the company would not comment on its discussions with Rhode Island prior to the meeting.

Massachusetts officials said they don’t have a program to offer the same guarantees as Rhode Island, but are not done talking to 38 Studios. “We have been proactive in working with them and asking them what their needs are, as far as staying here and growing here in the state,’’ said Kofi Jones, spokeswoman for the state’s secretary of housing and economic development, Gregory Bialecki. “We remain open to working with them.’’

The Rhode Island Legislature enacted a program last month that provides $125 million in loan guarantees for high-tech companies. Commercial banks would serve as the lenders, but the state would guarantee repayment, making it easier for small technology companies to obtain such loans. The Rhode Island program is designed to create about 400 jobs in that state.

Keith Stokes, executive director of the Rhode Island Economic Development Corporation, said that his office was approached by Schilling’s company. “We weren’t pursuing 38,’’ Stokes said. “They came to us.’’

Stokes said 38 Studios is seeking a $75 million loan guarantee, or 60 percent of the money set aside under the state program. But the company may not get that much. “We’re looking at a variety of numbers,’’ said Stokes.

The decision on whether to back a loan for 38 Studios will be made by the economic development corporation’s board, which is largely composed of business executives. Board members include Al Verrecchia, chairman of toymaker Hasbro Inc. of Pawtucket, Steven Lane, chief executive of medical device maker Ximedica LLC in Providence, and Shivan Subramaniam, chief executive of property insurer FM Global in Johnston. Stokes said the board could reach a decision as early as July 26.

About 20 states offer financial incentives aimed at video game development companies, but Massachusetts isn’t one of them. Still, the state may have something to offer Schilling. “We do have a number of programs available to Massachusetts companies that are looking to expand here,’’ said Jones.

Jones declined to specify what Massachusetts might offer the company to stay, but there are several options. For example, the state has an investment tax credit program that cuts taxes for companies that commit to creating permanent jobs. 38 Studios could be eligible; Schilling has said that he plans to hire more than 300 more workers in Massachusetts and Maryland over the next several years.

Jones also said that staying in Massachusetts would give 38 Studios better access to top gaming talent. The state boasts a number of major video game companies, like Harmonix Music Systems Inc., creator of the Rock Band games, and Turbine Inc., maker of Lord of the Rings Online. In addition, Massachusetts colleges, including the Massachusetts Institute of Technology, Worcester Polytechnic Institute, and Becker College, offer highly regarded programs in game design.

Hiawatha Bray can be reached at bray@globe.com.

Homegrown games

Homegrown games

Notable video games produced by Bay State developers over the years.

THE PITCH FOR
38 STUDIOS
RHODE ISLAND
■An economic incentive law passed in early June allows the state to issue loan guarantees to help high-tech companies arrange bank financing. It is not known how much the company would be seeking, but it could be up to $75 million.
MASSACHUSETTS
■No known offer on the table.