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Business Observer Friday, Jan. 23, 2015 3 years ago

What could go wrong?

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The battle of words between a company and Sarasota County is hot. At stake: the biggest payout in the history of the county's economic development fund.
by: Mark Gordon Managing Editor

Sanborn Studios is a leader among the 28 Sarasota County companies that have received a portion of $5 million in public funds in exchange for job creation.
That starts with the money — at $650,000 it's the richest incentive for a single company in the history of the five-year program. That also goes for lawsuits and counterclaims, with three since July 28. The situation, to many Sarasota-Manatee business executives, is a symbol of what can go wrong when government entities dole out money to businesses for projected growth.
The crux of the county's legal claim is simple. Sanborn Studios, a Lakewood Ranch-based movie and TV production studio founded by area entrepreneur Ken Sanborn, was given the $650,000 in September 2010. The contract called for the firm to add 117 jobs, at an average annual wage of $72,029, by September 2013. The firm failed to create the jobs and therefore breached its contract, the county alleges.
The remedy: Sanborn Studios, per the contract, must reimburse the county $2,992 for every job it failed to deliver, the county says in the suit filed in Sarasota Circuit Court. That would cover $350,000. The county also asks the judge to consider damages in the case that would make Sarasota whole on its $650,000 investment.
Sanborn Studios and Sanborn himself deny the allegations. The firm filed a countersuit Aug. 25. The suit makes several claims against the county, including breach of duty of good faith and fair dealing; slander of title; disparagement of property; and trade libel. The suit also contends the county violated its ethics codes, disregarded its own audit reports; and, most damningly, deliberately undermined Sanborn Studio's business.

Ken Sanborn, according to his spokesman, Scott Sobel, was out of the country and not available for comment. Sanborn retained Sobel, president and founder of suburban Washington, D.C.-based crisis communications firm Media & Communications Strategies, earlier this year.

“The studio's reputation has been severely damaged by the county's malicious actions and the studio expects to recover millions of dollars, in an amount yet to be fully determined, in damages, including
punitive damages,” Sobel writes in an Aug. 25 statement. “A focal point for the counter suit against the county is the indisputable fact that county representatives acted in bad faith and undermined Sanborn Studios' reputation in the county and in the film industry, and specifically in front of an existing client who wanted to hire the studio to produce a film.”

On that last point, Sanborn, in court documents, says the company was set to work with Bradenton-based Sweet Tomato Films on a movie in Sarasota. But Sweet Tomato went in another direction after Sarasota County officials badmouthed Sanborn Studios. “We were told by folks at the County that our association with Sanborn Studios was creating a prejudice against our production company,” Sweet Tomato Films producer Dori Sperko writes in the letter.

Another contention from Sanborn is the county's contract had no definition of what constituted a full-time job. Ken Sanborn, in previous interviews with the Business Observer, says the company did hire people for short-term positions, both in and out of Florida, for production projects.

Sarasota County officials, in another series of court filings, responded to Sanborn Studio's allegations Sept. 12. The county denied all the claims. The cases, filed in Sarasota County Circuit Court, are currently in the discovery phase.

Ken Sanborn, whose father owned a cable TV station in Lakeland, founded Sanborn Studios in 2009. The firm, still in business today, was once based out of a 27,000-square-foot studio in Lakewood Ranch. The company vacated that building after a little more than a year. That space has since been converted to an indoor trampoline park.

Sanborn had been involved in cameras and film for decades before the studio company. In the early 1980s he was a reporter-cameraman for WFLA in Tampa. He later worked for ABC News and its 20/20 program, where he once taped an interview with Muammar al-Gaddafi. And in 2000 Sanborn founded Sarasota-based Gyrocam Systems, which designed and manufactured a high-tech powerful camera that could be stabilized up to 30 feet above a vehicle.

The product was a hit with the U.S. Army, which wanted it for hundreds of vehicles in Iraq and Afghanistan to detect roadside bombs. The Army signed a $302 million purchase order with Gyrocam in 2008, and by the next year Sanborn and his investors had sold the business for an undisclosed amount to Lockheed Martin. Sanborn then turned his attention to Sanborn Studios.

“I'm not doing this to build another $500 million company,” Sanborn told the Business Observer in late 2009. “I'm doing this because I want to build something.”

— Mark Gordon

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