Promised their investment would help lure 500 high-paying jobs to Florida, lawmakers in 2009 sidestepped existing procedures to funnel $20 million to a well known movie production company that animated the scenes in Titanic and the Transformers movies.
But this story's ending isn't one for the movies.
The company, Digital Domain Media Group Inc., closed its Florida operations last week and on Tuesday filed for Chapter 11 bankruptcy, laying off 300-or-so Florida employees and likely leaving taxpayers without a return on its $20 million state investment. Local governments stand to lose around an additional $110 million.
The news of the bankruptcy and the potential loss of the economic incentives underscores concerns about governments doling out taxpayer dollars to politically connected private companies with little oversight and few guarantees. From 1995 to 2011, the state has paid $739 million in incentives to create 86,284 jobs, state officials say.
"Of course, 100 percent of all new businesses are not going to be successful. In fact the majority are going to fail," said Sen. Nancy Detert, R-Venice, who helped pass a 2012 law to make the state's economic incentive program more transparent. "There's something worse than not having a job … that's having one and losing one, and having the taxpayers chip in for that disaster.
"The failure of Digital Domain, in particular, shares some of the same traits of the failed solar-panel manufacturer Solyndra, which received $535 million in federal loans before closing its doors and filing for bankruptcy in 2011.
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