State To Give Hedge Fund Money for Expansion, Job Creation
Plans to build a new waterfront headquarters in Stamford were scuttled, but the world’s largest hedge fund regrouped and will still receive money from the state to expand its footprint in Westport.
In 2012 Bridgewater Associates, the world’s largest hedge fund, was expecting to get $115 million in economic assistance from Connecticut to relocate to Stamford, but when those plans fell through the state renegotiated its offer. Now, the hedge fund that manages more than $150 billion in investments is expected to receive a $52 million economic assistance package to expand its campuses in Westport, Wilton, and Norwalk.
The company, according to the state Bond Commission agenda, will retain 1,402 jobs and create 750 new jobs with a $17 million loan. The 10-year loan, with an interest rate of 1 percent, will be forgiven if the company creates 750 jobs and retains its existing positions through the end of 2021. It will receive another $2 million grant to assist with training and a $3 million grant to install alternative energy systems.
The company also will be eligible for up to $30 million in urban and industrial site reinvestment tax credits, which must be earned and do not require approval of the state Bond Commission.
Having just cut more than $820 million from the 2017 state budget, Republican legislative leaders were critical of plans to borrow the money on behalf of the world’s largest hedge fund.
“It cuts millions from Connecticut’s welfare program, it reduces dental treatment for the poorest children in our state, and it cuts over $8 million for critical mental health and substance abuse treatment,” Senate Minority Leader Len Fasano, R-North Haven, said of the state budget. “The Democrats’ budget also cuts from rape crisis [services], child abuse and neglect intervention, and domestic violence shelters. Yet at the same time they still manage to deliver special interest handouts.”
He said the state should support businesses, but the First Five Program, which became the First Fifteen Program, is about “picking winners and losers.”
House Minority Leader Themis Klarides, R-Derby, said, “Of course we want to keep highly skilled, well-paying jobs in Connecticut. But we all know that other vital projects will not be funded because we have to curtail our borrowing.”
In addition to cutting spending and not increasing taxes, the Senate approved legislation May 12 that cancels about $1 billion in bonding. The House deferred action on the bonding bill as they wait to see if there’s enough support to return for a special session on Gov. Dannel P. Malloy’s criminal justice reforms. That same bill authorizes about $382 million in new borrowing for local school construction projects.
The state Bond Commission is poised to approve the $22 million in borrowing for Bridgewater Associates on Friday. During that same meeting, it is poised to approve about $303 million in general obligation bonds.
In March, Malloy announced that he plans to allow the state to borrow $2.7 billion this year. That’s up from the nearly $2.5 billion the state bonded in 2015.
As far as Republican criticism is concerned, Malloy has said they’re being hypocritical because they routinely show up for ribbon cuttings for projects they never supported. He said if they really are against the borrowing then they shouldn’t show up at the ribbon cuttings.