Art Of The Creative Class Boondoggle

A story of economic development gone wrong. Rhode Island was desperate. Like Detroit, the last recession was particularly grim for Providence. The governor at the time, Donald L. Carcieri, had an idea:

"38 Studios presents Rhode Island with a tremendous economic development opportunity. This investment creates 450 high-paying jobs, provides job opportunities for our college graduates in a fast growing industry, and will attract other interactive and entertainment companies to Rhode Island. Located in the heart of the capital city and surrounded by our universities and strong arts community, I am confident that 38 Studios will serve as a touchstone for growth in the interactive entertainment and digital media industry."

The former pitching superstar for the world champion Boston Red Sox, Curt Shilling, was the person behind 38 Studios. He was asking for a lot of money. Massachusetts wouldn't play ball. Rhode Island was game:

So when Curt Schilling came courting in the weeks after his encounter with Mr. Carcieri, it wasn’t just the promise of jobs that caught the attention of the state’s political establishment. Here was one of Boston’s greatest living legends, a proven winner who had sunk something like $50 million of his own fortune into his company, and he was looking to build it not in Kendall Square of Cambridge, but near the old Jewelry District of Providence. If ever there was a way to show up the Bay Staters next door, this had to be it.

“It just felt really good, when this all started, to have the sexy sports celebrity from Boston who seemed to like Rhode Island and showed up in Rhode Island, and who built this exotic new business, even though no one knew what it was,” says the historian Ted Widmer, who grew up in Providence and works at Brown. “It seemed like the digital economy, or biotech, or whatever. But then it turned out that it wasn’t the new digital economy. It was some 13-year-old’s medieval fantasy.” ...

... For years, state officials had been kicking around the intriguing idea of transforming the old jewelers’ neighborhood in Providence, not far from the Rhode Island School of Design, into a nationally competitive “knowledge district” — the kind of neighborhood to which hip, young graduates would flock to design software. So, right from the start, what Mr. Carcieri and his economic planners saw in 38 Studios was just the sort of high-tech start-up that could be the magnet to revive the area.

If not for the part of the passage I highlighted, I wouldn't have noticed the New York Times piece about the 38 Studios boondoggle. One sentence sums up the tragedy:

The state’s 95-page complaint against Mr. Schilling and his 13 co-defendants, most of whom have now filed motions with the court to dismiss the case, reads like the treatment for a modern remake of "The Music Man.”

The cool neighborhood with a creative enterprise such as 38 Studios is the snake oil. Talent will flock to Providence. College graduates will stick around. Rhode Island will be saved! All for the low, low price of $75 million. Back to the ribbon cutting:

"I am very excited about the commitment of 38 Studios to locate in downtown Providence. The clustering of creative and digital industries so close to internationally recognized schools such as RISD, Brown, JWU, and URI can be the trigger that propels Providence into its future,” said Umberto Crenca, Artistic Director of AS220, a non-profit art community in downtown Providence. “The city's diversity, historic architecture and strong arts and culture have helped it to create a high quality of life that is attractive to creative types. Richard Florida's predictions are coming to pass: Creative people are drawn to interesting, dynamic and diverse communities; creative industries are drawn to talent and a new economic model is born."

Emphasis added. Now fast forward to current governor, Lincoln Chafee:

This lesson isn’t lost on Mr. Chafee, who has been preaching a longer-term, more methodical kind of economic development centered on what he calls “the meds and the eds” — that is, hospital and universities, of which Rhode Island has plenty. Brown recently moved its medical school into the hoped-for knowledge district, and the state has just finished burying a highway under the neighborhood, clearing acres of real estate.

Even so, with unemployment in Rhode Island above 9 percent, Mr. Chafee is now a profoundly unpopular governor, and his chances for re-election at this point seem slim. His deliberate approach inspires little confidence.

“People don’t like it,” Mr. Chafee acknowledged, shaking his head. “They want the razzle-dazzle.” By which he meant something more like the shimmering kingdom of Amalur, twinkling just out of reach.

Cool cities are razzle-dazzle economic development. Build it and they will come ... and do nothing. That will be $75 million. Sign here.