The governors office is looking into a $20 million business deal pushed by former Gov. Charlie Crist for a leading visual effects company that on Tuesday filed for voluntary bankruptcy protection.
Meanwhile, the state Department of Economic Opportunity wants the money back.
Roberti N. Sachen, the general counsel for the DEO, sent a demand letter on Tuesday to Digital Domain Media Group, informing the company the state is listed as a creditor in the bankruptcy case as the company has failed to advise the state of any changes to the grant.
"The department currently considers the agreement materially breached and demands assurances to the contrary from Digital Domain or immediate repayment in full of the $20 million awarded," Sachen wrote.
On the other front, Gov. Rick Scott has directed his inspector general to ensure that funding distributions similar to the $20 million package signed by Gov. Charlie Crist in 2009 for Digital Domain in Port St. Lucie wont be repeated.
I want to ensure that the approval process now in place would not allow incentives to be approved in the same manner as was done for Wyndcrest DD Florida, Scott wrote to Florida Chief Inspector General Melinda Miguel.
Enterprise Florida had initially recommended an $11.4 million incentive package for what was then known as the Hobe Sound-based Wyndcrest DD Florida.But the company and its primary proponent, Jupiter Island resident John Textor, argued more money was needed as the project morphed in grandeur.
Over vocal objections from former state Rep. Carl Domino, R-Jupiter, Crist backed the deal after getting lawmakers to alter the state budget, eliminating the need for a review by the states economic development arm Enterprise Florida.
The company that became known as Digital Domain, a sister company of a California-based visual effects studio, was one of nine companies Crist awarded $42 million to in 2009, once the review process was altered.
After the deal was approved, Textor bundled $5,000 into a Republican Party of Florida account to assist Crist as he was running for U.S. Senate as a Republican at that time, according to the Palm Beach Post. Another $3,500 was donated to the campaigns of state Reps. Kevin Ambler, R-Tampa, and now U.S. Rep. David Rivera, R-Miami, who backed the legislative change sought by Crist.
Textor professed at the time that the donations were a show of thanks.
The additional money gave the new Digital Domain, seeking to position itself as a rival to Disney and Pixar in the world of animation, until the end of 2014 to create 500 positions. The additional money put 200 extra jobs on the table. Textor talked of doubling the required total.
With the promise of jobs to a county that continues to have one of the highest unemployment rates in the state, the city topped the state financing crafting a $51.8 million deal that included $10 million from developers, leasing 15 acres, $28 million in bond money to build a 115,000-square-foot production studio, and an additional $3.8 million in bond money for employee training.
St. Lucie County economic development leaders told TCPalm.com that they would not have approved the deal as the state had claimed to have vetted the project.
"When we found out that the governor was going to put $20 million, that just, to us, meant that this thing was really rock solid," Larry Pelton, president of the St. Lucie County Economic Development Council, told TCPalm.com. "You have to think that why would they put their $20 million into it if they hadn't done their due diligence?"
With its debt growing on its Port St. Lucie facility, the award-winning California-based company board pulled the plug on the Treasure Coast operation, leaving nearly 300 employees out of work.
In filings with the Security and Exchange Commission on Sept. 5, Digital Domain reported defaulting on $35 million in loans, pushing its debt to $51 million.
The default came after federal filings that showed Digital Domain had $214 million in liabilities as of June 30, with assets worth $205 million.
Reach Jim Turner at email@example.com or at (772) 215-9889.