Digital Domain bullet dodged by Martin County

MARTIN COUNTY, Fla. - Two years ago, when John Textor was inking a deal to bring Digital Domain Media Group to Florida, he had harsh words for holdouts in his home county.

"I think Martin County is really being wronged by the crowd that fights economic development at every level," Textor told me during a 2009 interview at his Jupiter Island home.

He likened the skeptics to the National Rifle Association.

"They know automatic weapons are bad, but they don't want to give an inch because they're afraid of the slippery slope," he lamented.

Textor, who was Digital Domain's chief executive officer until his abrupt resignation late Thursday, originally hoped to bring the company's East Coast headquarters to Hobe Sound, not far from his $4 million home.

But he couldn't get buy-in from Martin County leaders on the proposed location, the tax breaks or the accelerated development approvals needed for the digital film effects hub.

So Textor ultimately delivered the company to Martin County's more welcoming northern neighbor, St. Lucie County.

Still reeling from the housing bust, Port St. Lucie city leaders embraced the deal by offering to build Digital Domain a $40 million headquarters in the Tradition development. It was part of a $71 million incentive package that required the firm to create 500 jobs by 2014.

Digital Domain had hired about 300 people — and all but 20 of them were laid off Friday as the company announced it was shuttering its Port St. Lucie operations. It will leave the city scrambling to find a new tenant for the custom-made building so taxpayers aren't stuck with the tab.

Digital Domain's stock price closed at 60 cents Friday, down from $8.50 a share during its initial public offering last November. With mounting debt, the company was considering bankruptcy protection.

Now, Martin County's skepticism is looking a lot like wisdom.

"It's really one of those deals, when everyone looks back they'll say, 'How could this happen?'" said former state Rep. Carl Domino, a Republican from Jupiter.

He has an answer to that question.

"It's the hubris of politicians," Domino said.

Domino maintains that the state did not properly vet the company, and that it was a shaky venture from the start.

"Any banker that looked at that deal would have said no," said Domino, an investment manager who recently lost a bid to return to Tallahassee.

Domino has been raising questions about the deal for years — ever since he was in office — but they were largely dismissed as sour grapes. He had lost about $50,000 on an earlier, unrelated business venture with Textor.

Anyway, Digital Domain had glitz in its favor.

It's the company behind special effects in blockbusters including "Titanic" and "Transformers." Miami Dolphins legend Dan Marino was one of its investors. Marino called to chat with Textor during my 2009 interview with him.

The big names didn't help the ailing balance sheets.

The rapid rise and fall of Digital Domain's local operations begs the question: What role should government play in supporting the expansion of private enterprises?

A string of government-backed expansions in our region have not panned out as promised in recent years.

Vero Beach-based Piper Aircraft has failed to meet job targets associated with a $10.7 million incentive package the state and Indian River County awarded it in 2008.

This year, the startup company American Energy Innovations backed out of a $4 million deal with the state and Martin County. The company paid back the money it had already received because it couldn't create the 600 promised jobs.

Textor said in 2009 he wanted Martin County to become more business friendly.

"I really want to help Martin County not miss the next one," he said.

After Friday's grim news out of Port St. Lucie, Martin County should be glad it dodged this one.

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