Gov. Lincoln Chafee's choice to head the state Economic Development Corp. withdrew his name from consideration Thursday, the governor's office said.
William Parsons said a recent serious health issue would prevent him from accepting the high stress and high demands that come with being executive director.
"After reflecting on the duties and responsibilities of the Executive Director and in consultation with my family, I have determined that my recent health concerns will not allow me to adequately serve in this demanding role," Parsons said in a news release from the governor.
The governor said Parsons would continue as managing director of community and business development at the EDC.
Parsons would have replaced EDC Executive Director Keith Stokes, who resigned after the collapse of 38 Studios.
The EDC came under intense scrutiny for extending a $75 million loan guarantee to the video game company owned by former Red Sox pitcher Curt Schillling.
The state is suing Schilling, other 38 Studios executives and some former economic development officials, saying the agency's board was misled into approving the guarantee.
Whoever leads the agency must be approved by the state Senate.
Parson said he was proud to have helped with the Economic Development Corp.'s "ongoing turnaround" in the months following the 38 Studios debacle. Several members of the board resigned in the wake of the scandal, and Chafee brought in Paul McGreevy, the head of the state Department of Business and Regular, as a special adviser to help stabilize the agency.
Christine Hunsinger, a spokeswoman for Chafee, said it was too early to discuss other potential nominees for executive director.
"It happened very quickly," she said Thursday. "The governor will evaluate the situation."