AP News

RI gov: Urgent need to act on economic development

PROVIDENCE, R.I. (AP) — Rhode Island's leaders say they're eager to make the state friendlier to businesses following an outside group's report calling for sweeping changes to the state's economic development efforts. But they concede they don't yet have a clear plan for doing so.

Gov. Lincoln Chafee feels "a sense of urgency" to improve the state's business climate, spokeswoman Christine Hunsinger said Wednesday. But she said the independent governor doesn't yet know what changes to the state's Economic Development Corp. he might recommend to the General Assembly.

Legislative leaders sounded a similar note following the release Tuesday of a Rhode Island Public Expenditure Council report that concluded the quasi-public EDC lacks focus, doesn't effectively measure its performance and should be brought under government control.

"We have to move quickly," said Rep. Donna Walsh, D-Charlestown, who is co-chairwoman of a legislative economic development committee. "It seems like we talk a lot. But how much action? We have to get the momentum going on this."

Chafee commissioned the report after the collapse of former Red Sox pitcher Curt Schilling's video game company. The company, 38 Studios, was lured from Massachusetts in 2010 after the EDC approved a $75 million loan guarantee, and the state is now likely on the hook for some $100 million related to the deal.

The report calls for a broad overhaul of economic development efforts in the state, including the absorption of the EDC into a new state commerce office. It also recommends that the state mandate a comprehensive economic plan and by January, when the General Assembly convenes, draft a package of legislation designed to improve the business climate.

Lawmakers said it's too soon to say how much of the report they can support, or whether they'll come up with new proposals. Chafee's spokeswoman said the governor hasn't decided whether he might implement some of the report's recommendations through executive orders.

Some lawmakers warned against abrupt changes.

"Obviously changes need to be made, but we didn't get into the 38 Studios debacle overnight and we're not going to get out of it overnight," said Rep. Richard Morrison, D-Bristol. "We need to hear from all points. Change for the sake of change is not the way to go."

Business groups, however, clamor for action. Laurie White, president of the Greater Providence Chamber of Commerce, called for a quick response to the RIPEC review, even before January's session. She said economic development can no longer be an "afterthought" in Rhode Island.

"The time for action is now. We don't have time to wait," she said. "We can't wait two years for this to really take hold fully."

EDC board member Karl Wadensten, who himself runs a small business, said there are many competing ideas on economic development, but there is a common theme.

"We're at the bottom of the barrel — we have to do something different," he said.

"No one has been bold enough yet," Wadensten added, noting that Chafee was "on the fringe" of bold action with his recent order that state agencies speed up their review of existing regulations to determine which ones hurt small business. But he said that is the first step of many.

He also noted that merely "rebranding" the EDC — which would become the Rhode Island Commerce Corp. under RIPEC's recommendations — will mean nothing without a cultural shift.

"Rebrand the Tide that doesn't clean your clothes, you're not going to buy Tide again," he said. "If you don't walk the walk and talk the talk, you're done. Rebranding does nothing."

Steve Ballmer, Power Forward
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