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State pumped $20 million into studio that collapsed last week

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Published:   |   Updated: March 18, 2013 at 12:17 PM
TAMPA -

The state's practice of giving cash to companies that promise to create jobs may come under fire again after a Port St. Lucie animation studio collapsed last week and cut nearly all of its 300 jobs.

It's not clear whether the state can recoup any of the $20 million it gave Digital Domain Media Group through an upfront grant program. A spokesman for the Florida Department of Economic Opportunity said the agency's general counsel is looking into the issue.

Meantime, officials with Gov. Rick Scott's administration and Enterprise Florida, a public-private economic development group, on Monday distanced themselves from Digital Domain. They said then-Gov. Charlie Crist's administration awarded the company the $20 million, not Scott's administration.

It appears then-state Rep. Kevin Ambler of Tampa also had a key role helping Digital Domain win the state funding, even though some state officials warned against it. According to reports in the Palm Beach Post, in 2009 Ambler created an amendment in a state budget bill fast-tracking the cash grant.

He sat on the company's board of directors as recently as July, according to government filings, although it was unclear this week whether he's still on it. Ambler did not return a call Monday and was not at his downtown Tampa law office when a reporter stopped by.

Digital Domain is a California-based company founded in the early 1990s by "Titanic" director James Cameron and others. It thrilled state and local leaders three years ago when it agreed to put an animation studio in Port St. Lucie, no hotbed of filmmaking.

It built a glistening 115,000-square-foot studio and promised to create at least 500 jobs by the end of 2014, according to a state incentive contract Digital Domain signed. To help it along, Florida awarded $20 million through a cash grant program, and local governments contributed millions more.

Things went downhill suddenly last week, though. The company revealed over a few days that it had defaulted on $35 million in loans, that its chairman and chief executive officer would resign and that it would shut its new Port St. Lucie animation studio. The company is still operating studios in California and British Columbia.

A company spokeswoman said she didn't know whether the company could repay any or all of the incentive money to the state and local governments.

Digital Domain likely will be a black mark on the state's economic incentive programs for years, particularly upfront grant programs.

In July, the Tribune reported on the state's growing practice of awarding companies millions of dollars through cash grants, normally well before the companies have created all the jobs or invested all the capital they promised. One cash grant program in particular, the Quick Action Closing Fund, has become the state's go-to program for attracting desirable companies.

The Tribune's review found that companies receiving money from the Quick Action Closing Fund had created about 10,000 jobs in Florida through June 30, 2011. However, they promised to create 17,000 jobs.

In May, a spokesman for Digital Domain boasted to the Tribune that it actually had exceeded the state's job requirements. He made no mention of any financial troubles.

On Monday, Stuart Doyle, a spokesman for Enterprise Florida, said Digital Domain was an unusual case that wasn't part of the Quick Action Closing Fund program. Normally, Enterprise Florida vets a company to see whether it's viable and to make sure the state will get a good financial return on its investment, he said.

However, Crist's administration circumvented the normal process so the state could award $20 million to Digital Domain without requiring a review by Enterprise Florida, Doyle said. The administration got an assist from Ambler, the former Tampa legislator, who created an amendment to a state bill that waived the usual vetting process, the Palm Beach Post reported. Ambler told the Post he feared a complete vetting of Digital Domain might take too long and jeopardize the project.

Ambler later joined Digital Domain's board. Regulatory filings from November show Digital Domain paid him $20,000 a year plus $2,000 for each board meeting attended in person. It also awarded him stock options.

Dale Brill, who led Crist's Office of Tourism, Trade and Economic Development at the time, could not be reached for comment Monday.


msasso@tampatrib.com (813) 259-7865 Twitter: @msasso
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