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State Gives Loan, Tax Credits To Hedge Fund

by Christine Stuart | Aug 15, 2012 1:15pm
(6) Comments | Commenting has expired
Posted to: Business, Town News, Stamford, Westport

Photo Courtesy of DECD

Gov. Dannel P. Malloy announces the state grant to Bridgewater Associates

The hedge fund manages $130 billion in assets, has 1,225 employees, and will be receiving a $25 million forgivable loan and up to $80 million in urban renewal credits from the state for building a new corporate headquarters and creating 1,000 jobs within 10 years.

Gov. Dannel P. Malloy made the announcement Wednesday that Bridgewater Associates will build a state-of-the-art headquarters at Harbor Point in Stamford. Bridgewater Associates is expected to invest $750 million in the project.

“To have a company of Bridgewater’s stature make the business decision to invest $750 million in our state and significantly increase its workforce is not only an extraordinary economic ‘win,’ but signals to the rest of the world that Connecticut is strengthening its leadership position in the very competitive financial services sector,” Malloy said.

Bridgewater Associates moved its headquarters from New York City to Westport in 1981.

Westport First Selectman Gordon Joseloff called the news “bittersweet.”

“My understanding is that this is a long-range plan with construction not expected to be completed for at least five years,“ Joseloff said in a statement posted on WestportNow.com. “Mr. McCormick said it is likely that even after the move that Bridgewater will possibly retain some presence in Westport both at its Glendenning-Ford Road complex and the Nyala Farms office complex.”

The decision to offer tax incentives to a company already in the state to relocate to another municipality in the state is just one of the criticism Malloy’s “Next Five” program faces every time an announcement like this is made.

In June, when Alexion took advantage of the state’s tax credit program and decided to move from Cheshire to New Haven, Republican Sen. Len Suzio criticized the program because in his view it created “winners and losers.”

In this scenario Westport is the loser and Stamford, where Malloy was mayor for 14 years, is the winner.

But Joseloff took a more holistic view of the situation.

“Any time we see a corporate move away from Westport, it is disappointing,” Joseloff said. “But given the needs of Bridgewater and our inability to provide a consolidated headquarters, it is understandable. Westport looks forward to having Bridgewater retain a corporate presence here for the next few years and, in some form, beyond.”

He said the news is good news for southwest Connecticut.

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(6) Comments

posted by: kenneth_krayeske | August 15, 2012  1:32pm

Malloy = 1 term governor. This is corporate welfare at its worst. Let’s take the $115 million in tax breaks and give them to the middle class. Malloy - robbing from the poor and giving to the rich. I don’t think this is why the Working Families Party supported Malloy.

posted by: joemanc | August 16, 2012  12:09pm

What Malloy has done is created a moral hazard. If I’m the CEO of a big company in CT, I’m going up to Malloy and saying “I’m taking my company out of CT unless you give me state aid”.

And just listen to Malloy when he speaks - he loves to use big words, as if to make us think he is smart. We’re not fooled.

Lastly, I’m curious to know how much money he has doled out to Bridgewater, UBS, NBC Sports, Deloitte, ESPN, Cigna, Alexion, etc. $1 billion? And figure it’s all borrowed money so his spending spree may end up costing us $2 billion.

posted by: BrianO | August 16, 2012  1:58pm

The criticisms of this most recent deal can be predicted because the corporate beneficiary is a hedge fund and presently located within the state.  There is a an argument that an economic development policy that seeks to only keep employers already present from leaving reeks of a shell game.  Why are we granting favor to maintain the status quo?  In this case, that criticism would appear to be unfair.  Economic development is a complex idea and includes nurturing large employers as they grow.  Our neighbors to the north and south – New York and Massachusetts – have shown tremendous innovation and creativity in nurturing business and we should do the same.  We should also do so with an eye towards our state’s demographics.  An economic development policy that does not address our state’s burning need to address the low-to-moderate income (“LMI”)  population will ultimately fail. 
We are presently addressing another state budget that does not generate sufficient revenues to cover operating expenses.  Keep in mind that our operating expenses include 23% of revenues directed towards debt service, an indication that we have been living beyond our means for generations.  Employment is the greatest social service program that exists.  This is a precept upon which both conservatives and progressives can agree.  Connecticut was the only state – other than Michigan – with negative new job growth for the 20 years preceding 2008.  In addition, low income families saw incomes decrease as the employment market constricted.  The LMI population is the primary user of our state’s social services, and the bucket is dry.  We are beginning to cut back services and legislators are beginning to talk about tax increases.  If the citizens of Fairfield County that pay all the taxes really start to pay attention, there will be a riot.  We need to examine our state budget in the manner of a business and look to transform our revenue negative assets – people – into revenue producers.  This means jobs, jobs, jobs.  Primarily urban jobs that employ members of the LMI population.  We need to examine closely how existing state policies do not promote economic development in our poorest communities.  There are no sacred cows.  We need to support business development for our neediest populations and redirect them away from social programs or state institutions that destroy the ability to be self-sufficient.  Then you will see a real change in the ability of government to support everyone – rich and poor.

posted by: joemanc | August 16, 2012  2:38pm

Brian - fair enough…and I have no problems with hedge funds…but…your asking the middle class, namely me, to fork over $115 million dollars, plus interest since this is borrowed money, to a company that makes billions a year. And was this hedge fund really going to leave the state? Probably not. Espn wasn’t leaving, and they got state money to increase their presence, which is what they have been doing for oh, 30 years! CT is already the hedge fund capital of the world, which has been a big growth area, using your reference band, for the past 20 years. What we need in this state is an environment that is favorable to all businesses - those that want to stay here, grow here and move here. What we don’t need is the government picking winners and losers and ultimately, taking money from the middle class and giving it to millionaires and billionaires.

posted by: ALD | August 16, 2012  8:40pm

Joemac,  Just to be clear here the millionaires and billionaires don’t need the money of the middle class. It’s the end result of years of failed Democratic policies that have driven business and jobs out of this state that cause otherwise clueless people like Malloy to need to use taxpayer money to try to appear relevant. 

What would you do if the Governor of this state offered you the same deal, say no???

Until the people who vote in CT wake up and understand the damage one party rule, and incompetent Democrats have caused to this state things will never get better.

posted by: perturbed | August 16, 2012  9:06pm

perturbed

joemanc wrote:

“What we don’t need is the government picking winners and losers and ultimately, taking money from the middle class and giving it to millionaires and billionaires.”

Well said, joemanc.

Unfortunately, Malloy seems singularly focused on doing exactly that. And he does it all with no perceptible trace of shame.

When will we all finally say “Enough!” and put a stop to this?

—perturbed