38 Studios approval included 1 no vote

PROVIDENCE, RI (WPRI) - As the work continues on 38 Studios' Project Copernicus, a look back at the July 26, 2010 EDC meeting when the loan guarantee was approved reveals great optimism and only one dissenting vote.

Two sides were presented to the EDC Board of Directors but the vote ended up overwhelmingly one-sided. It passed by an eight to one vote, with Wyoming, Rhode Island business owner Karl Wadensten casting the only dissenting vote.

The minutes from that meeting, obtained by Target 12, reveal proponents cited the risks but also pointed to five months of ‘due diligence by EDC personnel and 1113 anticipated ‘spin-off’ jobs in addition to 38 Studios’ eventual 450 jobs as reasons to approve the $75 million loan guarantee.

EDC Deputy Director J. Michael Saul described ‘risk positives’ that included a potential return on investment to the state of 47 percent. It was also pointed out that the 38 Studios management team had brought in $11.5 billion in product sales during their collective careers.

Wadensten seemed harder to convince, telling his fellow board members he was concerned about the state's existing small businesses, saying, 'he is torn on a decision regarding this matter'.

Governor Don Carcieri responded that there were many tools available to Rhode Island small businesses and that 38 Studios could make Rhode Island ‘a player’ in the gaming field.

According to the minutes, the governor agreed, 'there is risk, but that it is a risk worth taking'.

Wadensten asked where the money would come from if it turned out the company needed more, 'to which Governor Carcieri explained that the company could get more investors if nothing else'.

So far, it is 'nothing else' as 38 Studios is now reportedly looking for private capital.

Underscoring that is the unpaid payroll to the company’s estimated 275 employees.

"We have reached out to 38 Studios but have not heard back,” EDC Managing Director of Marketing, Communications & Evaluation Judy Chong said, referring to the payroll question. “We don’t have information regarding that.”