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EDC Head Resigns, Ehrhardt Calls For Loan Caps Following 38 Studios Controversy

The head of the state's Economic Development Corporation has stepped down following the controversy of Curt Schilling's 38 Studios.

Keith Stokes has stepped down as the head of the Rhode Island Economic Development Corporation amid the controversy surrounding Curt Schilling’s videogame company 38 Studios, according to the Providence Journal.

The company, headed by the former Red Sox pitcher, defaulted on a $1.125-million payment to the state on May 1. On Wednesday, Schilling and members of 38 Studios met with state and EDC officials in an emergency meeting that was closed to the public. In 2010, EDC approved a $75-million guaranteed loan to the videogame company following 38 Studios’ promise to bring 450 jobs to the state by the end of 2012 and moved its business from Massachusetts to Providence.

Stokes, a longtime board member of the EDC, was appointed by former Gov. Donald Carcieri in January 2010 and reappointed by Gov. Lincoln Chafee when he took office the following year.

"As a lifelong Rhode Islander, I am grateful for the opportunity to have served at the RIEDC," said Stokes.  "I have dedicated my entire career to a state I love very much with the desire to create a better place for Rhode Islanders to succeed and to raise their families. I will continue to be involved in the future."

A Newport native, Stokes said he plans to spend time with his family for now. 

"I thank Keith for his service to Rhode Island, not only at the helm of the EDC, but also as a former Board member of that agency and as the long-time Executive Director of the Newport County Chamber of Commerce," said Chafee in an official statement issued Thursday morning.

The Providence Journal also reports that has asked Colin P. Kane – head of the Route 195 Redevelopment District Commission – to replace Stokes.

Amidst the 38 Studios dilemma, State Rep. Lawrence Ehrhardt (R – North Kingstown) introduced legislation to the General Assembly Wednesday that would prohibit the EDC from providing loan guarantees of more than $10 million to any one entity – a measure Ehrhardt attempted to submit two years prior. According to the Journal, Ehrhardt said he was dissuaded from proposing the cap at that time by Stokes who told him it would “upset a transaction” that the EDC was working on.

“I feel that I was substantially betrayed,” Ehrhardt told the Journal.

Govstench May 17, 2012 at 11:46 PM
It is clear that Schilling's company is going to go bust. They cannot meet payroll and it appears that the check that was issued today for the 1st payment had little to no money to back it up. RIEDC needs to either have more oversight or be disbanded forthwith. This appears to be yet another govt boondoggle that has gotten out of control.
DownTown May 18, 2012 at 04:31 AM
This won't stop the more government minions though.
Govstench May 27, 2012 at 11:43 AM
Perhaps changing the legislature will.

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