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Digital Domain Litigation

Jul 22 • 289 Views • View Comments

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Members of the press:

In light of Governor Scott’s announcement today that his administration formally filed litigation against Digital Domain, I wanted to remind you of the letter Senate Democratic Leader Chris Smith had hand-delivered to the governor on Friday. In it, the Senator requested a full accounting and compliance status of the incentives deals struck by Governor Scott thus far. He also urged the governor to pursue with equal vigor the economic incentive deals that failed under his watch. Senator Smith’s letter appears below.

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July 18, 2014

The Honorable Rick Scott
Governor
Office of the Governor
The Capitol
Tallahassee, FL 32399

Dear Governor Scott:

Last week, you announced your intention to file suit against Digital Domain Media Group over its failure to comply with the terms of a $20 million agreement signed by the State of Florida to encourage the company’s relocation to the state and create 500 jobs. The litigation is also reportedly going to include the former governor for his role in the incentives’ approval.

While I wholeheartedly applaud holding companies, their owners, and government officials accountable when a deal risking ta payers’ money fails to materialize, I am very concerned about the prospects of committing an additional $100,000 of tax dollars to pursue one incident while ignoring the growing body of evidence that Digital Domain is hardly an isolated case.

Earlier this year, the Miami Herald published a series of stories probing this Administration’s recruitment of corporations to Florida, and the amount of taxpayer-funded initiatives pledged for their “job creation.” According to the series, since taking office, this Administration pledged $266,166,758 in exchange for corporate promises to create 45,258 here in Florida. Thus far (as of the stories’ posting in February), the state has shelled out $22,028,680 for a grand total of 1,939 jobs, or $11,361 for each job created – an alarming 4 percent compliance rate. In addition to these paltry results, a number of the deals are fraught with troubling details. For example:

  • This Administration gave $400,000 to Redpine Healthcare Technologies in exchange for the company to create 410 jobs and relocate from Spokane, Washington to Panama City. But the jobs never arrived, and the money is gone.
  • Bi-Lo Holdings, the corporate parent of Winn Dixie, received a pledge of $3.6 million to keep its headquarters in Jacksonville and create approximately 9 jobs per year over the next 11 years. Since that time, the company has revamped its employee pool, shifting its previous ratio of full time/part time employees from 60%/40% to 40%/60%. It would appear that for their money, tax payers are getting part time work in exchange for full time jobs – subsidizing a race to the bottom.
  • Darden Restaurants last year was pledged $175,000 to create 75 jobs at its Orlando headquarters. Not long after, it announced the layoff of 85 employees, followed by another 20, and this May, another number it refused to disclose.

Given the overwhelming failure of most of the current financial deals to produce the jobs companies promised in exchange for a commitment of Floridians’ money, there appears the very real possibility that examples such as these may be the norm, rather than the exception.

To that end, I would like to request an accounting of the total financial awards to date, the amount that has been paid out, the number of companies that have fully complied, the number of jobs pledged, the number actually created to date, whether the jobs met the conditions (i.e. the salary projections for each job, not simply averages in a division), and finally, the number of companies that have received money and subsequently failed to comply or folded operations through bankruptcy or other default methods.

Governor, it is my sincere hope that your litigation against Digital Domain is for all the right reasons, and not simply an expensive legal foray for political purposes in an election year. I equally hope that your commitment to accountability is as strong for the current Administration’s own actions as that of your predecessor.

I look forward to your timely response to my request.

Sincerely,

Senator Chris Smith
Senate Democratic Leader

CONTACT:
Michelle DeMarco
Press Secretary
Florida Senate Democratic Office
(o) 850.487.5833

 

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