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Bond Commission Approves ‘First Five’ Funding

by Christine Stuart | Oct 3, 2012 5:13pm
(4) Comments | Commenting has expired
Posted to: Town News, Cheshire, Hartford, New Haven, Jobs, Labor, State Budget, State Capitol

Christine Stuart photo

Gov. Dannel P. Malloy and Lt. Gov. Nancy Wyman

Gov. Dannel P. Malloy is unapologetic about his approach to the state budget or his controversial economic development program, which critics are calling “corporate welfare.”

The state Bond Commission approved funding Wednesday for several large companies that have agreed to stay in the state and create more than 200 jobs in exchange for varying amounts of state funding.

Sustainable Building Systems, cooperative effort by Australia-based Weeks Group and Arizona-based Diverse Services Group, will manufacture steel building material and establish its United States headquarters at a 300,000 square foot facility in North Haven. It received the $19.1 million low-interest, 10 year loan the state promised Wednesday.

“If the company created at least 208 new full-time jobs within 24 months of loan closing and maintains those positions for one full year, $10 million of the principal may be forgiven,” according to the language on the Bond Commission agenda.

But that was just one of seven companies which received a total of about $58.7 million from the Bond Commission Wednesday.

Norfolk’s Infinity Hall, which is expected to build a 500 seat theater and a 100 seat music hall and bistro in the Front Street entertainment district at Adriaen’s Landing in downtown Hartford, received $1.3 million Wednesday. Under the terms of the agreement $1 million of the loan will be forgiven if its able to retain 53 jobs and create 34 jobs within three years.

The addition of the music hall and a movie boosts a long-stalled project started by former Gov. John G. Rowland. The state lost a lawsuit in July filed by one of the Front Street developers who didn’t appreciate the ultimatum they were given by the administration which had just been taken over at the time by former Gov. M. Jodi Rell.

“As someone who drove urban development in a city I’m not sure the project was as well thought out as it needed to have been,” Malloy said Wednesday. “But having said that with a movie theater nearing completion and a live entertainment venue added to the location there’s a very sizable private investment.”

He said it’s the combination of those venues which will help spawn more development. 

“I have been personally involved in trying to attract other businesses there and those discussions continue,” Malloy said. He declined to offer any specifics on which companies he’s trying to convince to locate to the empty retail and residential space, which sits across from the Connecticut Convention Center.

Sen. Gary LeBeau, D-East Hartford, who is not a member of the Bond Commission but chairs a subcommittee that gives him a seat at the table, asked Malloy to explain the reasoning behind giving a home health care company money to move from East Hartford to Hartford. He said some of his constituents have had trouble understanding the decision to give money to a company that moves a few miles across the Connecticut River.

Malloy explained that CareCentrix is a rapidly growing company that was seriously considering offers to relocate to Kansas and Florida.

The company will receive $24 million in grants which will be paid over five years if the company meets annual job retention and creation goals until it reaches 503 jobs. It currently has 213 jobs.

CareCentrix had outgrown its East Hartford offices and said their decision to stay in Connecticut was due to the state’s grant.

“I just want to be frank, without the governor’s program we wouldn’t be here today. We wouldn’t be able to retain these jobs and we certainly wouldn’t be able to grow these jobs,” CareCentrix CEO Eric Reimer said back in June when the announcement was made.

Malloy assured LeBeau that they’re in discussions with the owner of the building that CareCentrix is vacating in East Hartford and are looking to find another tenant.

A similar scenario is in play for Alexion Pharmaceuticals, which received money Wednesday to move from Cheshire to New Haven. Alexion will receive $26 million to relocate its 368 jobs and create 300 new jobs. The loan will be fully forgiven if the job creation goal is achieved within five years. It will also receive $25 million in urban and industrial sites reinvestment tax credit over 10 years.

The developer who owns the building the company is moving to in New Haven also owns the building the company is fleeing in Cheshire giving him an incentive to find a new tenant.

News of the Alexion move this summer prompted outcry from Republican legislative leaders, but it received the approval Wednesday of the two Republicans on the state Bond Commission. Neither Rep. Sean Williams, R-Watertown, or Sen. Andrew Roraback, R-Goshen, voiced any objection before the unanimous vote. But it’s not only conservative legislators on the right that have a problem with giving tax breaks to large companies. The Working Families Party was concerned enough to commission this report a year ago, which pointed out the state has been bad at clawing back the generous packages it’s handed out.

Malloy is often quick to put to rest any criticism of his economic development strategy or his approach to the state budget.

Malloy said he took office “after a string of Republican governor’s who made some pretty horrendous decisions and metaphorically drove the car into the ditch.” The metaphor is one often used by President Barack Obama when he talks about the Republican administration of former President George W. Bush.

When Malloy took over the state of Connecticut in January 2011 he was handed a $3.6 billion budget deficit.

“I didn’t make that deficit,” Malloy reminded reporters at a post-Bond Commission press conference Wednesday.

According to Malloy, the previous administration spent all the money in the “cookie jar,” and they borrowed over $1 billion without making any budget reforms. He said he’s doing what he can to straighten it out, which includes borrowing for capital improvements.

“Straightening this thing out is tough work, hard work, and change is hard,” Malloy said.

Funding for Charter Communications, the latest company to qualify for $6.5 million under Malloy’s ‘First Five’ program, is still in negotiations with the state over the terms of their loan so the item was removed from Wednesday’s agenda.

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(4) Comments

posted by: justsayin | October 4, 2012  8:07am

“I just want to be frank, without the governor’s program…The question is why not? What is the state not doing that they can not be competitive in CT. Buying jobs is not the answer.

posted by: Noteworthy | October 4, 2012  8:36am

Malloy is unapologetic about the budget and the porkaholic program that shovels more lard to already fat corporations? Be still my heart.

This isn’t a bond commission - it’s the stick’em up commission that forces taxpayers to put their hands in the air and empty their wallets.

These companies were already planning on doing what Malloy is paying dearly for them to do. ESPN would add the jobs they need in Bristol in New Jersey if they didn’t get the taxpayer welfare check? Alexion is being paid to move 8 miles from Cheshire to New Haven. That makes sense for whom? It makes sense for Winstanley the developer who is trying to fill up a new building and Alexion who dumped New Haven once and wanted to come back and bed her again now that Winstanley has given her implants and a tummy tuck. And then there is the hedge fund - who paid its CEO $3 billion and somehow still needs tens of millions from working people who make less than $100K.

CareCentrix was thinking about leaving? Really? If it was that important for them to stay, then why pay them to move? Pay them to stay in East Hartford. That would most likely have cost less.

These promised jobs are not guarranteed for Connecticut residents and are spread across such a long period of time that it will have zero impact on the 9% official unemployment rate or the real unemployment rate which is twice as high.

Malloy may be unapologetic but he should be and so should the lackys sitting around that table. This is a good program gone awry. It should be reserved for out of state companies moving to the state and creating jobs; and if companies instate want the money, all or a significant portion of the jobs should be for those who already live here and under no circumstances should taxpayers see their income taxes and license fees go up so Alexion and CareCentrix can mosey on down the road or go across the river. The lack of common sense on these deals is remarkable.

posted by: joemanc | October 4, 2012  10:11am

Christine - Mr. Malloy continues to make statements that previous Republican administrations
“screwed up” the state. I’m waiting for you, or anyone really, to challenge the governor’s assertion, by pointing out that Democrats controlled the legislature during that time. The 2 previous Republican governors had no choice but to work with the Democrats. It was a mutual effort that got us into this ditch.

posted by: RE-Windsor, CT | October 4, 2012  5:27pm

Please tell me I am not the only one that sees the absolute craziness of BORROWING THE MONEY TO PAY JOBSMAIL!!!!!  Jobsmail is a form of blackmail to keep jobs in CT.  I cannot describe the total stupidity of this concept. This article fails to provide any information related to the terms of the bond offering . Bonds can be issued for a few years to decades. I appreciate rates are low, however, the jobs may be gone before the loans are paid off.  We are saddling future generations with the largess offered to billion-dollar companies begging them to stay in Connecticut.  When they leave, Connecticut, we will still be paying for these loans. It is the equivalent of buying a new car with a 30 year loan. Do you really expect the car to be running 30 years from now?

It really is time for the voters of the state of Connecticut to wake up and smell the coffee, and realize that if we do not change the party in power there will be no one left in the state of Connecticut.  It is interesting to me that the people that helped create this leave the state of Connecticut, to move, in many cases, to a friendlier taxing locale. That leaves those of us left in CT to carry the burden of their bad ideas. I think we should change the rules that any person who is a state employee or elected official must pay income taxes on income regardless of source to the State of Connecticut, even if they live in a state or locale other than Connecticut. They should have the opportunity to reap what they sow.