Boston Globe Editorial
November 22, 2009
THE GRANDIOSE plan to create Plymouth Rock Studios – a Hollywood on the Atlantic – is likely to prove little more than an irresistible fantasy. Unfortunately, it raised the hopes of a Massachusetts town whose leaders mostly failed to uncover the shoddy financing behind the aggressive sales pitch. Still, the saga of the studio, outlined in last Sunday’s Globe, revealed one positive development: The state rightly refused to put the public’s money into such a venture, despite its glitzy appeal.
Governor Patrick’s economic-development office turned down a request for $50 million in infrastructure assistance for the proposed $650 million movie studio. And yes, an executive with Plymouth Rock blamed that decision, along with a weak economy, for the project’s plight. But to the extent that the state offers financial incentives to private businesses, its goal should be to nail down fundamentally sound projects that might otherwise go elsewhere – not to subsidize iffy ones that become viable only if the public picks up part of the tab.
It speaks well of the ability of Patrick’s team that it turned down Plymouth Rock, after concluding that, even if successful, the project wouldn’t generate enough tax revenues to justify the outlay. The state never got to the point of evaluating the basic soundness of the project itself, but the report by the Globe Spotlight Team exposed Plymouth Rock’s dubious financing, shifting roster of partners, and history of legal infighting. The town was within its rights to have offered the project a 75 percent reduction in its future property taxes, but the state needs to uphold higher standards, and demand evidence of solid private financing, before fronting tens of millions of infrastructure dollars.
For better or worse, offering tax breaks and other incentives is a basic tactic in the modern economic-development game. But in negotiations, public agencies are often at a disadvantage in dealing with firms that know their own industries far better than government officials do. Especially as multimillion-dollar concessions by taxpayers become the norm, states and communities need to be on guard against characters like Professor Harold Hill in Broadway’s “The Music Man,’’ who secure public resources through cajolery and an ample supply of wild promises.
The analogy isn’t quite fair to Plymouth Rock, whose backers sincerely want to build a studio in Massachusetts. And in a better economy, they might have an easier time lining up investors. But while proponents of the studio deserve credit for their imagination, they should build their dream with private money.