Rhode Island governor Lincoln Chafee said during a press conference today the $1.25 million check 38 Studios handed the Economic Development Corporation has cleared the bank.
Earlier reports stated that in order to make the required payment, the firm deferred payroll and let go of all contract and temporary staff. The report also said the check handed over to the state bounced, but it seems to have cleared now.
“It’s time for them to go out and get private capital funding,” said governor Chafee. “That’s the deal. It’s a generous deal, but stick to it.
“I want to make sure we’re doing everything possible to make sure 38 doesn’t fail. We’re in deep. There’s not going to be any money from the state. They’re not coming here for easy money.”
Chafee said he knew the loan was a risky move on the state’s part due to the capital it takes to start a new gaming studio, but the rewards outweighed the risks when the deal was signed due to what a “huge success” it would have been for Rhode Island, providing 38 Studios had done well.
“I said from the beginning that it was a risky enterprise,” he told the press. “Again, these are the ramifications of being in a risky business.”
The next loan payment of $2.6 million, which is a debt service payment, is due to the state is due on November 1. The firm will them owe $12.6 million in full annual debt service in 2013.