38 Studios makes missed payment on loan

38 Studios makes missed payment on loan
Seth Tipps

By Seth Tipps

May 18th 2012 at 7:29PM

Rhode Island to crack down on tax breaks as 38 Studios clears $1.125 million dollar hurdle

Rhode Island has recieved a check for $1.125 million dollars from 38 Studios for a loan payment due the first of May.

The first installment of a $75 million loan to the company provided as incentive for it to leave neighboring Massachusetts and come to Rhode Island has been a source of much concern for both the company and the state.

Yesterday brought news the company had hand-delivered a check to the ecomic development corporation, the quasi-public agency backing the loan, before calling to say there wasn't enough money to cover it.

Today Governor Lincoln Chafee announced the company had provided and cleared a second check.

Rhode Island taxpayers are on the hook for as much as $112 million dollars should 38 Studios default on the loan.

According to WPRI, the Governor's announcement was accompanied by the declaration that the state would change its motion picture tax credit system to prevent 38 Studios from receiving any more taxpayer money.

"I'll do anything under the law to protect the taxpayer and also not break the law," said Chafee, who opposed the $75 million dollar loan deal as the 2010 gubernatorial candidate.

"My goal is to protect the taxpayer now."

38 Studios reportedly applied for $2.5 million in tax credits in 2011. For 2012, that figure has increased to $12.