38 Studios gets another $17.2M from RI-backed loanApril 29th, 2011 at 10:45 am by Ted Nesi under Nesi's Notes
38 Studios has collected more than half the cash available from the $75 million taxpayer-guaranteed loan the Rhode Island Economic Development Corporation took out to get the company to move to Providence.
The video game company founded by former Red Sox pitcher Curt Schilling received a $17.2 million payment on April 18, six days after its employees started working out of the company’s new downtown headquarters, EDC spokeswoman Melissa Chambers told WPRI.com.
38 Studios has received a total of $39.6 million, or 53 percent of the loan money, in three installments since last fall. The first payment of $13 million was handed over when the loan transaction closed on Nov. 3, and the second payment of $9.4 million arrived after the company chose its future home in Providence.
This month, 38 Studios moved its local studio from Maynard, Mass., to the six-story, 104,316-square-foot One Empire Plaza building, which has been vacant since Blue Cross & Blue Shield of Rhode Island moved into its new headquarters. The gaming company has a second studio in Maryland for its Big Huge Games subsidiary.
38 Studios’ next payout will be for $4.2 million, which it can obtain once it has 125 full-time employees in Rhode Island, according to bond documents reviewed by WPRI.com. The company has promised to employ 450 people in the state by late 2013.
38 Studios is tentatively scheduled to have all but $11 million of the loan’s proceeds by the end of this year. It cannot receive the last chunk of money until it pays off the rest of the loan, which is supposed to happen by November 2020.
If 38 Studios doesn’t have enough cash to cover its loan payments, the governor is required to ask the General Assembly to provide taxpayer money to make investors whole.
The 38 Studios agreement was strongly backed by former Gov. Don Carcieri and just as staunchly opposed by his successor, Lincoln Chafee. Now that the loan is a done deal, the new governor says he wants 38 Studios to succeed – and hopes to attend its ribbon-cutting ceremony in Providence.
Authorization for the loan was provided by a new $125 million Job Creation Guaranty Program that lawmakers created last year partly to benefit 38 Studios. This week, Chafee got the EDC’s board to change the program’s rules to cap the size of future loans at $10 million – $65 million less than 38 Studios got – and make more money available to small businesses.
38 Studios is developing two games. The first one, “Kingdoms of Amalur: Reckoning,” is being created by its Maryland-based subsidiary. Electronic Arts is scheduled to release the $60 game for Playstation 3, Xbox 360 and PCs sometime next year.
The company’s second one, a massively multiplayer online game called Project Copernicus, is being developed in Providence. At the time the loan transaction closed, Copernicus was slated to be released in September 2012.