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PROVIDENCE – Another loan guarantee approved by the R.I. Economic Development Corporation in 2010 has turned into a financial liability for the state.
Capco Steel LLC received a $6 million loan from Webster Bank through the agency’s R.I. Industrial Facilities Corporation two years ago for work to its facilities in Providence and new equipment. The loan was guaranteed up to $5 million by the EDC through the Industrial Recreational Building Authority program.
However, the EDC began making loan payments to the bank on behalf of Capco this past February. EDC has said $4.6 million of the guaranteed loan was still outstanding as of June 30.
Taxpayers will not be affected, according to the agency, thanks to reserve funds and asset sales under the program.
The Capco news follows the collapse of 38 Studios LLC, the bankrupt video game developer that received a $75 million loan guarantee from the state, also during the last year of then-Gov. Donald L. Carcieri’s tenure.
Carcieri went to Capco’s Providence headquarters in March 2010, to sign a law increasing the Industrial Recreational Building Authority loan program’s size from $20 million to $60 million and to announce that the steel firm would be the first beneficiary of the expansion. •