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Republicans Continue To Express Skepticism On Jackson Labs Deal

by | Oct 18, 2011 4:13pm () Comments | Commenting has expired | Share
Posted to: Business, Special Session

Legislative leaders from both parties met with Gov. Dannel P. Malloy for more than two hours Tuesday and emerged with 90 percent agreement on the jobs bill, but they were still far apart on the $291 million deal for Jackson Laboratory.

“As unbelievable as it may seem we are getting closer to what looks like it could be a bipartisan jobs session understanding people may have disagreements with respect to Bioscience Connecticut,” Malloy said. “With that exception we’re darn close.”

By mid-day Wednesday Malloy said he expects the remaining 10 percent of the jobs bill will be agreed upon or not and details are expected to be made available at that time. The approval of $291 million in state funds for Jackson Laboratory will appear in separate legislation.

House Minority Leader Lawrence Cafero, R-Norwalk, described Jackson Laboratory as an “exciting project,” but “it’s a lot of money and we have unanswered questions right now.”

Some of those unanswered questions are related to how the deal is structured. Cafero said he’s asked the administration whether Jackson Labs can create 300 jobs in five years, and if so then why doesn’t the state retain the title to the building until they create the jobs. The current deal calls for more than 300 jobs to be created over 10 years. It includes a $192 million forgivable construction loan and $99 million for research.

“Is there some wiggle room in regards to the amount?” Cafero said. “Can we do less money in five years, then when they hit that amount trigger additional money? It’s about minimizing the risk.”

“People find it a very exciting idea,” House Speaker Chris Donovan said of the Jackson Labs proposal. “In my caucus everyone wants to be supportive and make it successful.”

Donovan said his members want to do their due diligence on the proposal which is why the Finance Committee is holding a hearing on it Thursday.

Sen. Minority Leader John McKinney, R-Fairfield, said he hasn’t polled his caucus and he knows individual members have questions about it, including him.

“I’m concerned we’re maybe rushing, but I can’t take a position on it until I know all the answers,” McKinney said.

He said he would like to know with 1,300 employees in Bar Harbor, Maine how many spin-off and indirect jobs have been created because of their presence there. There have also been questions raised about their attempt to build a lab in Florida.

McKinney said they negotiated with Florida for two and half years and he finds it hard to believe they would give up on Connecticut if lawmakers wanted a little more time to learn about the deal.

Last week, Rep. Rosa Rebimbas, R- Naugatuck, asked Jackson Labs Chief Financial Officer Charles Hewett that exact same question about the timing and if it could wait until the regular legislative session.

“I’m certainly not issuing any ultimatums,” Hewett said. “I will tell you that within the last week I’ve had three calls to say come to us if Connecticut doesn’t work out. Would we explore those? Start to explore those? If it looked like this was going to drag on we might.”

“Do I have the appetite to go through what we went through in Florida in Connecticut? Absolutely not. Is Oct. 26 an ultimatum? No,” Hewett replied.

The Democrat-controlled legislature and Democratic governor don’t need Republican support for the proposal to get it passed, but both have worked to obtain it.

At least one Republican believes the Democratic legislature is not asking enough questions.

“If this had been a deal proposed by one of the prior two governor’s we would have had 15 press conferences, public hearings galore, and the former attorney general would have had press conferences on it. Let’s be honest,” McKinney said. “The majority has said very little about this deal. If it had been proposed by Govs. Rell or Rowland we would have heard a lot.”

Democrats disagree. They say they are doing their due diligence and they are taking advantage of an opportunity to create new industry in the state.

PriceWaterhouseCoopers estimates personalized medicine that Jackson Labs specializes in is growing at a rate of 11 percent per year.

According to the Department of Economic and Community Development the deal with Jackson Laboratory will create 841 construction jobs and about 330 jobs over the next 10 years. It also estimated there will be about 4,000 “spin off” jobs created and 2,000 indirect service type jobs created as a result of the investment. Jackson Labs will be investing $800 million of its own money to build the 173,000 square foot research facility, which it will eventually own.

Economic Development Commissioner Catherine Smith said last week that the estimates are conservative. It’s estimated that 661 direct jobs will be created, but it only needs to create 300 by year 10 in order to have the loan forgiven.

“If the deal is that promising and we are spending a significant amount of taxpayer dollars to invest in bio-technology, then we should take our time and do our homework,” Sen. Leonard Fasano, R-North Haven, said. “Let’s see if this investment makes good business sense for Connecticut. Taxpayers deserve no less.”

Roy Occhiogrosso, Malloy’s senior adviser, said he can understand if the Republicans are opposing it for political reasons, but cautioned them not to reframe the issue by “picking out isolated facts.”

Occhiogrosso said they gave Republicans the opportunity to present them with their own economic modeling and they have yet to hear back. Occhiogrosso said they’d be happy to run the numbers in another economic modeling program.

He said the deal will make Connecticut an international leader in a growth industry, something that has never happened before.

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(8) Archived Comments

posted by: Disgruntled | October 18, 2011  7:09pm

That is a lot of money.
Dan offers pie in the sky but ANYONE spending their own money would do exhaustive due diligence.
Does SOLYNDRA ring a bell?
While I think this would be an OK deal,when will Connecticut face facts and let companies do what they do without offering them corporate welfare? Take your time and go slow is always good advice.Dan’s dream might not come true,even though it sounds good.

posted by: GoatBoyPHD | October 19, 2011  9:50am


And Yes, I support Herman Cain’s 999 taxation on these non religious,  non-profit corporations. .
Tax all of them.

posted by: Noteworthy | October 19, 2011  12:42pm

Projections of job growth are always wildly exaggerated and almost never come true. In fact, I can’t think of one that has in any administration. It is always used as a reason to give more tax breaks where none are needed or deserved which puts pressure on the rest of us, and/or to spend massive amounts of public money or take on debt that any rational person would not due.

Cafero has a good point - retain title the the property until they produce the jobs. By the way, there is no way to estimate 4- 5,000 “spin off” jobs. Anybody who says there is, is full of proverbial cow manure. That these old lines are still in use is a testament to how tired the ideas are coming out of Malloy’s office.

Thank God Malloy is married - or women in Connecticut would be hearing lines like: “Where you’d come from? Heaven?”

posted by: SocialButterfly | October 19, 2011  2:20pm

GoatBoyPHD:  But you stopped short of—supporting Herman Cain for President?

posted by: SocialButterfly | October 19, 2011  2:53pm

Before the Malloy administration “rolls their dice” on a near third of a billion dollar investment in Jackson Laboratories—let’s remember that the Obama administration just gambled away, and lost a risky $528 million dollar investment to Solyndra (Solar Panels) of California

Malloy is a disciple of Barack Obama, but he should not try to compete with our President’s deficit-spending-outreach.

Connecticut is already a per-capita national leader in indebtness liability.

posted by: NOW What? | October 19, 2011  8:02pm

Jackson should NOT be given full title to the real estate until they’ve either paid off the ENTIRE “forgivable” loan *and* have at least 200 staff in it, or have 300 staff in it and have paid off 2/3rds of the loan… something along those lines. For us to simply and literally GIVE them a newly-constructed campus - and $99 million to play with as well - right off the bat is just plain CRAZY. And if he *refuses* to include such terms in the final agreement, state legislators - be they Republican or Democrat - would be *equally* insane to allow him to get away with such ego-maniacal attitude and behavior by simply voting to accept the deal without such terms.

CT DEMOCRATS - Just because people are “excited” about this plan does NOT mean that you all should act like ignorant sheep. GET SMART!!!

posted by: NOW What? | October 19, 2011  8:18pm

The truth of Herman Cain’s “999” plan is revealed if you simply turn its numbers upside down. Yes, it and its creators are evil incarnate, appealing to people’s *greed* in an effort to get them to agree to that which is against everyone’s best interests. And the “idea” of taxing non-profits is oxymoronic, because incorporated organizations are only taxed on their *profits* and therefor non-profits by DEFINITION have nothing upon which to tax… the statement literally makes no sense.

posted by: GoatBoyPHD | October 20, 2011  8:38am


John,Cain’s 9-9-9 is brilliant if only for bringing up corporate tax.

It means corporations like The Tribune - Courant - Advocate would have to pay taxes no matter how Sam Zell structured the deal with their ESOP. It means poorly managed companies would still have to pay their taxes.

It would mean non-profits offering products and services, including non-profit party-line media companies like Media Matters, or research lab sales of transgenic mice would be subject to taxation. And yes, that would include the New Haven Independent.

Of course we know why the Citizens United decision was made don’t we?  The professional Lobbyists turned blogger reinventing themselves as non-profit info-service and media companies—some operating offshore?

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