Movie effects company Digital Domain Media group has flopped, despite massive state-support and the hopes of many waiting for the long awaited opportunity.
The massive waste of time and resources and the negative consequences that have resulted are, in nothing else, a lesson learned for those who think they can leverage the state to further their careers.
As I discuss in the video below, Digital Domain hit very close to home and the irresponsibility seems implausible in the free market. How does someone get taxpayers to pay for college after paying for unemployment for a job that never exists? In a word, government.
There is no doubt that many will point towards President Obama and some will pint to a Republican that may have been in office locally but make no mistake, nobody will accept blame because it’s always the other guys fault when the corporate world mixes with the public sector.
The anger felt by locals in Port St. Lucie and everyone throughout the Treasure Coast is understood. This is an area hit hard by the economic downturn and housing crises. The excitement for Digital Domain is understood.
Let’s hope this will signal as a warning for professionals looking to go back to college in order to improve their prospects in the job market.
Here the Palm Beach Post fleshes out the debacle a little more:
To get $20 million in cash from Florida’s Quick Action Closing Fund, Digital Domain Chairman and Chief Executive John Textor persuaded state legislators, including former state Rep. Kevin Ambler, R-Tampa, to approve the payment without Enterprise Florida’s input. Textor later named Ambler to Digital Domain’s board of directors.
“Enterprise Florida Inc., in its final assessment, did not recommend funding for the Digital Domain project,” the agency said in a statement. “The prior state administration circumvented the due diligence process to make funding available without (Enterprise Florida’s) recommendation.”
The Business Development Board of Palm Beach County, the non-profit organization that recommends incentive packages to county commissioners, also took a pass on Digital Domain.
Business Development Board President Kelly Smallridge said Textor approached her about public incentives for the company. Textor, a West Palm Beach native who lives in Hobe Sound, said he wanted to build a studio in his hometown.
“His pitch was, ‘I’m the local boy, I want to bring this back home to the county where I was raised,’ ” Smallridge recalled. “We would have loved to make it happen.”
But, Smallridge said, Textor never provided the basic financial statements that the Business Development Board requires of the companies it recommends for tax incentives.
“Before I take a project to the county commission, I need to see some background and financials, and I never got it,” Smallridge said. “Need I say more? They left Palm Beach County and went up the road to Port St. Lucie.”
Seeking its $2 million, the state of Florida filed a claim with a bankruptcy judge in Delaware. As an unsecured creditor, Florida got nothing.
DayJet was promised additional money from the county and state, but it never collected that money, which Smallridge called proof of the protections built into the county’s incentive plan.
Gray Swoope, Florida’s secretary of commerce and head of Enterprise Florida, the public-private organization in charge of state job incentives, said in an interview earlier this year that he’s “bothered” by the state’s use of Quick Action Closing Fund money.
“We really need to change the way we use the Closing Fund,” Swoope said. “It was upfront, not a lot of questions asked.”
Some of the disappointments in the state’s job incentive program have cost nothing more than a bit of embarrassment. Gov. Rick Scott last year visited Stuart to announce $3.9 million in state and county incentives for American Energy Innovations. The company promised to create 600 jobs at a plant that would have made turbines for green energy projects.
American Energy Innovations abandoned those plans this year and returned $800,000 in incentive money.
It’s unclear whether the state will be so fortunate in the case of Digital Domain. While state incentive contracts include “clawback” clauses, Digital Domain has said bankruptcy is a possibility.
Digital Domain had only $6.6 million in cash as of June 30, and it owes $51 million on a loan it took out in May.