Curt Schilling, founder of 38 Studios, listens Monday as members of the R.I. Economic Development Corporation consider granting the company a multimillion-dollar loan.

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The Providence Journal / Bob Thayer

The board of the Rhode Island Economic Development Corporation approved a controversial $75-million loan guarantee to lure 38 Studios LLC, the video-game company founded by retired Red Sox pitcher Curt Schilling, from Massachusetts to Rhode Island.

The guarantee passed on an 8-to-1 vote, with Karl Wadensten, president of Vibco, a manufacturer of industrial vibrators, the lone opposition vote. Three members of the board were absent.

The arrangement is being made under a law passed in June that allows the state to guarantee up to $125 million in loans for high-tech and “knowledge-based” companies. The loan guarantee to 38 Studios would use 60 percent of that money allocated under the law.

38 Studios has promised to bring 450 jobs to the state by the end of 2012.

During the public meeting, Wadensten said he looked at the deal from the perspective of a manufacturer. Bringing a video-game company here, he said, doesn’t address the problems state businesses already have.

“This is an R&D [research and development] project, and R&D projects are tough,” he said. “There are a lot of pros, but a lot of cons, too.”

Other critics of the deal are concerned about the size of the loan, the risk that taxpayers will be on the hook, and the wisdom of investing in a company in a high-risk industry that has yet to bring a product to the public.

Governor Carcieri, chairman of the EDC board and a backer of the project, acknowledged the deal is a risk, but said it’s worth taking.

“We need to make a statement ... this gives us the ability to be a real player in the digital-media area,” he said.

Schilling, an avid gamer, started 38 Studios, named for the number he wore as a Red Sox player, in 2006. In 2009, the company purchased Big Huge Games, a Maryland company.

According to 38 Studios CEO Jennifer MacLean, the company now employs about 200 people, divided between its headquarters in Massachusetts and Big Huge Games in Maryland.

The company is developing two products. One is a single-player game called “Kingdoms of Amalur: Reckoning,” which is scheduled for release in the fall of 2011.

Executives from 38 Studios introduced the game last week at the Comic-Con convention in San Diego. Schilling said unveiling the game before the fanatic gamers at Comic-Con made him as nervous as walking out to the pitcher’s mound at Fenway Park for the first time. The more ambitious project is called a massive multiplayer online game (MMOG), which can be played online by thousands of players simultaneously. Both games are set in the same fantasy world. 38 Studios has not revealed a release date for the MMOG.

At a news conference after the board meeting, Schilling said he’s been negotiating exclusively with Rhode Island for the last four months, and denied any intent to play one state off another.

“This is a partnership,” he said.

Under the terms of the deal, the state will issue $75 million in bonds, which would be purchased by private investors. 38 Studios is responsible for repaying the money, but if it can’t, the state would be responsible.

In that event, the state would be in first position to claim any assets 38 Studios possessed.

The company will not get the money all at once, but must meet certain benchmarks along the way.

Upon the loan closing, estimated to be Aug. 31, it will receive the first $15 million.

Another $10 million will be released upon the public announcement of a relocation date in Rhode Island, estimated to be made by Nov. 30.

The next $20 million comes when the company is actually here, with at least 80 full-time jobs, estimated to be by Feb. 28, 2011.

If the company does not create 450 jobs by the end of 2012, it will be subject to a “job-shortfall fee” payable to the EDC of $7,500 per job.

Should 38 Studios relocate the company outside Rhode Island, it would constitute a default on the loan, and the debt would be immediately payable.

KEY PLAYERSMembers of the EDC board

Board members are appointed by Governor Carcieri, who also serves as chairman. Carcieri favored the project. Other members are:

Alfred J. Verrecchia, chairman, Hasbro Inc. Vote: yes.

Dr. Timothy Babineau

President and CEO, Rhode Island Hospital and Miriam Hospital. Absent.

Paul J. Choquette Jr. Vice chairman, Gilbane Inc. Vote: yes.

Donna C. Cupelo

Regional president, New England Verizon Communications. Vote: yes.

David Dooley

President, University of Rhode Island. Absent.

Stephen Lane

President, Ximedica. Vote: yes.

George Nee

President, AFL-CIO of Rhode Island. Vote: yes.

J.L. “Lynn” Singleton

President, Providence Performing Arts Center. Vote: yes.

Cheryl Watkins Snead

President and CEO, Banneker Industries. Vote: absent.

Shivan Subramaniam

Chairman and CEO, FM Global. Vote: yes.

Dan Sullivan Jr

President and CEO, Collette Vacations Inc. Vote: yes

Karl Wadensten

President, VIBCO; Vote: no.

asmith@projo.com