The Associated Press

SALT LAKE CITY -- The chairman of the Governor's Office of Economic Development is ordering a rare review into the decision to offer $800,000 in tax incentives to two organizations.

The Center for Applied Media, a nonprofit start-up organization aiming to promote digital media and entertainment technology industry in Utah, was approved for $550,000 in incentives in April. The Utah Student Investment Program, a venture capital fund designed to give college students "real-world" experience, was approved for $250,000.

Although both qualify for state funds, David Simmons, GOED board chairman, is conducting a review of the two deals because he's concerned that the two organizations aren't typical recipients of incentive money.

He's also concerned that the board, which usually unanimously approves incentive offers, had some members abstaining from voting, or in one case even voting against one of the groups getting funding.

The review could include a public meeting examining the larger question of what types of companies should get incentive money. It even could include a re-evaluation of the two deals approved on April 21.

"I'd like to talk to the board members involved" in approving the two deals," Simmons said. "These may be great projects, but I have a number of questions I would like answered."

Typically, taxpayer-funded economic development incentives have been reserved for companies expanding in Utah that have proven track records that bring good-paying jobs to the state.

Gov. Jon Huntsman, through a spokesman, declined comment and referred questions to Jason Perry, executive director of GOED. Perry said he supports the idea of public discussion of state incentive policy.

"The board needs to meet not only to discuss these two deals but the policy direction for the board itself to ensure we are doing the right thing with public funds," Perry said.

GOED works closely with the Economic Development Corporation of Utah, which under a state contract aims to bring more companies to the state. The 15-member GOED board appointed by the governor is made up of private and public-sector community representatives who play a key role in the recruiting process by reviewing applications for incentive money from corporations considering expansion in Utah.

One issue is that the Center for Applied Media in Park City is not a company considering Utah as a site in which to expand. It is a start-up that aims to promote and develop an industry comprising companies that provide entertainment-based and educational computer games, Internet and wireless applications and computer animation services and products.

The Utah Student Investment Program also is not a company; it is a college-level program that by its very nature offers the state no clear-cut return on its investment.

Although the board approved both deals, some board members had serious concerns about whether the two groups should receive any taxpayer money.

Board member Mary Draper, development officer for the Utah Museum of Natural History, questioned whether giving $550,000 in cash to the Center for Applied Media, which according to a GOED memo will have seven people earning nearly $80,000 annually, is a good use of taxpayer dollars.

Draper said her concerns were based on getting no clear information about how many jobs were being created by the center or what the state's projected return on investment would be. Typically, in each deal brought before the board, companies can estimate how many jobs they would create in Utah, their capital investment in plant and equipment, and their average wage.

Typically, money has not been given to help companies to meet payroll expenses. But in the case of the Center for Applied Media, "It looks like we are making a grant here and paying part or all of part of seven or eight salaries with it," Draper said.

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Information from: The Salt Lake Tribune www.sltrib.com

This story appeared in The Daily Herald on page D4.