Democrat Governor Gina Raimondo continues to show off the fruits of her corporate buying spree with our money, proclaiming a whole 300 jobs at the following price tag:
Raimondo’s office said that as part of the deal reached with the company, Virgin Pulse will seek $5.7 million in tax credits from the state: $3.2 million in Rebuild Rhode Island credits to subsidize its new office, and $2.5 million in Qualified Jobs Incentive credits that will be offset by the new employees’ income tax payments.
Incidentally, today the RI Dept. of Labor and Training (DLT) released its preview of tomorrow’s employment release from the federal Bureau of Labor Statistics (BLS). And wouldn’t you know it, the number of Rhode Islanders who ceased to be employed from October to November is estimated at exactly 300. Mark today as a day of treading water in Rhode Island.
Not to worry, though. The BLS also reports that the unemployment rate ticked down again… because… umm… 1,800 Rhode Islanders decided that it wasn’t worth looking for work in the state.
Ted Nesi’s report on the Virgin Pulse deal notes that the company asked for some of that taxpayer dough to move its location, having purchased RI start-up ShapeUp. As Nesi notes, ShapeUp began at Brown University and spun off by receiving (you’ll never guess) tax credits from the state of Rhode Island.
The full story is that Shape Up began as a non-profit corporation, meaning that initial contributions and investments may have been tax deductible. When it came time to start cashing in, Shape Up formed for-profit Providence Health Solutions to market its services, and the RI Economic Development Corporation (EDC) gave the for-profit company $100,000 in 2008. Providence Health Solutions LLC does not come up in a search of the Secretary of State’s corporate database, but that’s not surprising, because ShapeUp has been registered as a “foreign” corporation at least since 2010.
According to RIOpenGov, the state Department of Health gave Shape Up at least $18,750 in 2010. (That’s the farthest back for which data is immediately available.) Earlier this year, Virgin bought ShapeUp for an undisclosed amount of money and let founder Rajiv Kumar stay on as the leader. From Nesi’s article:
“Prior to its acquisition by Virgin Pulse, ShapeUp benefitted immensely from strong partnerships with the Rhode Island state government, local institutions and community leaders,” Kumar said Thursday. “I’m thrilled that Virgin Pulse saw the potential that exists here and decided not only to stay, but to grow our footprint in this supportive and vibrant community.”
Virgin Pulse most definitely saw the potential that Rhode Island’s insider-handout system presented, and the palms were already greased.