Connecticut

New Haven Leaders Say Bill to Tax Yale Threatens Economic Development

Through an event and a statement published in the Hartford Courant, business and community leaders from New Haven issued an appeal to the Connecticut General Assembly to reject a bill to tax Yale which they say would be detrimental to economic development.

Connecticut State Capitol

Connecticut State Capitol (photo – Adavyd/wikimedia)

The bill in question is SB 414, an act concerning the tax on college property. This legislation seeks to tax the academic property in which basic scientific research occurs if any companies beyond campus are later formed based on that research.

The bill’s language specifically targets Yale’s academic properties in New Haven, including the Center for Genome Analysis, Payne Whitney Gymnasium, and the Yale Repertory Theatre.

The appeal published in the Hartford Courant notes that “SB 414 will tax Yale for launching companies that attract investment, create jobs, and expand the tax base. We urge the General Assembly to reject SB 414 before it kills jobs.”

Yale officials are obviously not happy about being targeted as a source for new revenue generation. Another bill that sought to impose seven percent tax on the net investment profits of Yale University’s $25.6 billion endowment is stuck in the CT General Assembly’s finance committee.

Because of that bill, Florida Governor Rick Scott had called on Yale University to consider moving operations to Florida. “With news that the Connecticut Legislature wants to unfairly tax one of the nation’s most renowned universities to deal with the state’s budget shortfall, it is clear that all businesses in Connecticut, including Yale, should look to move to Florida,” said Gov. Scott in a statement urging Yale to relocate to Florida.

In a statement about SB 414 published on Yale’s official news outlet, Rich Jacob, associate vice president for federal and state relations, said that Yale is urging the General Assembly to reject SB 414 too. “Yale is also making clear that SB 414 violates the U.S. and the Connecticut Constitution, and Yale is prepared to defend its constitutional right of non-taxation,” said Jacob.

So if Connecticut lawmakers decide to go ahead with this bill, they should be prepared for a strong legal challenge to it that would serve as a landmark judgement for other cities in the state thinking of taxing academic property of other non-profit universities. The presidents of Trinity College, the University of Hartford, Quinnipiac University, Wesleyan University, and Fairfield University have all endorsed the appeal issued in the Hartford Courant.

Besides, Yale already pays $4.5 million in property taxes annually on its commercial, nonacademic properties, making the university one of the biggest taxpayers in New Haven. Yale also makes voluntary payments to the city, currently pegged at $8.5 million per year. This figure increases as the number of students and the university’s workforce grows.

Fairfield, CT Taking Steps to Deal With GE Headquarters Property and Relocation Impact

Following the announcement that GE will relocate its headquarters to Boston, the Town of Fairfield, CT is taking steps to deal with the impact on the local economy.

GE Fairfield, CT HQ entrance

GE Fairfield, CT HQ entrance (photo -Markvs88/wikipedia)

The two main concerns are about the economic impact of the loss of jobs, and the future of the GE headquarters campus and the tax revenue generated by the property.

For starters, the Town has set up a web page (fairfieldct.org/ge) to provide residents and businesses with information and help answer questions about this issue.

The Office of the First Selectman has issued a statement which lists the concerns and outlines the next steps that are in the works. The statement notes that “The primary concern I hear is the effect of GE’s move on property taxes. Residents should note that GE is scheduled to pay the Town $1.6 million in property taxes in fiscal year 2016-17…This payment is due regardless of whether GE or someone else owns the property.”

A positive development in this regard is that, Albert Kleban, chairman of Kleban Properties, has announced that his company wants to purchase the GE campus and redevelop it into a Technology Center with an educational component. This project could more than make up for the loss of the GE jobs that are being relocated to Boston and elsewhere.

“GE has reported that they have employed 800 people at that site, we hope to be able to exceed that and with the help of the local government, and possibly at the state level, we will be able to do that,” said Kleban in a statement announcing their intention to start negotiations to purchase the GE property.

First Selectman Mike Tetreau’s statement likewise notes that “The 68-acre campus, along with all of Fairfield’s charm and amenities and the site’s proximity to major transportation hubs, makes the property an ideal location for another company or developer.”

As far as next steps to deal with the economic impact are concerned, Tetreau adds that “I have met with state and regional economic development groups as well as our local economic development team. We are exploring options and preparing plans for moving forward.”

Tetreau is meeting with GE officials this week to follow-up on details and discuss how they can work together to minimize the impact on Fairfield.

Connecticut Economic Development Loan Secures Serta Simmons Bedding Relocation With 200 Jobs

Serta Simmons Bedding, LLC, the largest mattress manufacturing company in the United States, has announced plans to relocate certain operations to Windsor Locks, CT.

Serta

Serta (photo – serta.com)

Supported by a Connecticut economic development loan of $8 million, the company will lease manufacturing space at 140 Old County Circle in Windsor Locks, and relocate its Massachusetts operations to this new facility.

Governor Dannel P. Malloy said in a release that manufacturing has been a core sector and a driving force of Connecticut’s economy in the past, and it will continue to be so in the years ahead.

“That’s why we continue to build partnerships with companies like Serta Simmons Bedding, which knows the state has the skilled workforce and innovative strategies that can help any company thrive,” added Gov. Malloy.

SSB Executive Vice President of Operations Mark Baron likewise said that the area offers a talented workforce and tremendous geographical advantages for some of their most valued customers. “Serta Simmons Bedding is grateful for the state’s assistance with their relocation to Windsor Locks,” added Baron.

The Connecticut Department of Economic and Community Development (DECD) helped secure the project by offering the company an $8 million, ten-year loan at two percent interest, to be used for for leasehold improvements and new machinery and equipment. Loan forgiveness for $5 million will be provided if Serta Simmons Bedding maintains the new and relocated positions for two consecutive years.

DECD Commissioner Catherine Smith noted that in the last year alone, Governor Malloy and DECD have launched several initiatives aimed at helping manufacturing companies grow their workforce, develop the skills of their workers, and develop new technologies.

“Serta Simmons Bedding’s decision to relocate operations in Connecticut is no coincidence. The company knows we are serious about growing this important sector of our economy,” added Commissioner Smith.

Serta is the No.1 mattress manufacturer in the United States, and a privately held company owned by six licensees and represented by 23 manufacturing facilities in the U.S. and four in Canada. National Bedding Company, LLC (NBC) is the largest shareholder of Serta, Inc. and the largest of the six Serta, Inc. licensees, with 18 manufacturing plants in the United States and three in Canada.

Under Serta Simmons Bedding’s leadership, NBC and SBC compete in the marketplace, but work together where joint activities will achieve efficiencies and enhance sales. This latest relocation of their Massachusetts operations to Windsor Locks, CT is a part of SSB’s national effort to retool and optimize their combined manufacturing footprint.

Earlier this year, SSB announced its corporate headquarters relocation from Hoffman Estates, IL to the Buckhead District in Atlanta. Simmons Bedding Co.’s headquarters is already in metro Atlanta, while Serta’s headquarters is in the Chicago suburbs.

Connecticut Leaders Seek Special Legislative Session to Prevent GE Headquarters Relocation

Following GE Chairman Jeffrey Immelt’s statement on CNBC yesterday that GE will make a final decision on the site selection process for their headquarters relocation by the end of the year, CT Senate Minority Leader Len Fasano renewed calls for a special legislative session to make changes to the state budget and lighten the burden on businesses.

GE Fairfield, CT HQ entrance

GE Fairfield, CT HQ entrance (photo -Markvs88/wikipedia)

Immelt had issued a memo to staff back in June after the Connecticut Legislature approved a tax package against which GE had publicly voiced opposition. In the memo, Immelt made it known that GE has assembled an exploratory team to “look into the company’s options to relocate corporate HQ to another state with a more pro-business environment.”

Following Immelt’s latest update on the process, Sen. Fasano has now written a letter to Governor Dannel P. Malloy and the CT Senate Majority Leadership, urging them to call a special legislative session.

“Clearly, GE was not bluffing in June when they said proposed tax hikes in the state budget were making them ‘seriously consider whether it makes any sense to continue to be located in this state,'” wrote Fasano in the letter. “They were serious. Now Connecticut is on the brink of losing one of our state’s biggest assets and crowning achievements.”

It’s true enough that GE’s exploratory team has been busy in the interim, requesting and considering proposals submitted by a large number of states, regions and cities. Some of the contenders have been eliminated from consideration for different reasons. News reports say that Dallas and Cincinnati didn’t make the cut because of the stance taken by lawmakers from these states against reauthorization of the Export-Import (Ex-Im) Bank.

Jami Grindatto, president and CEO of the Sandoval County and Rio Rancho economic development group Sandoval Economic Alliance, explained in a blog post on the SEA website that GE had requested a proposal from them, but New Mexico didn’t make it to the GE headquarters relocation shortlist. Grindatto added that the process has helped them establish relationships at the highest levels at GE, who may consider other operations for New Mexico in the future.

At the moment, Westchester County, NY and Atlanta, GA seem to be the top contenders for the GE headquarters, apart from the company’s existing headquarters location. Westchester County has reportedly submitted four potential sites that GE might find suitable. New York Governor Andrew M. Cuomo recently met in person with top GE executives in Fairfield, CT.

Of course, GE would likely be amenable to staying put in Fairfield, CT if state lawmakers address the company’s concerns. Following GE’s formation of the exploratory team to look at other locations for their headquarters, the CT Legislature quickly amended the $1 billion budget hike to reduce it by $178 million and delay the implementation of the unitary tax system. A combination of additional incentives and more legislative changes could help Connecticut retain the GE headquarters.

GE has  800 headquarters employees in Fairfield and a total of 5,700 in the state. Sen. Fasano adds in the letter that “The landslide that is going to come from GE leaving will be measured in billions and in decades. It is something that will be felt by thousands of families and will have a damaging and vast ripple effect across the state for years to come.”

Hartford, CT Mayoral Candidate Unveils New Economic Development Plan

Luke Bronin, candidate for Mayor of Hartford, CT, has released an economic development plan focused on creating and retaining jobs and making Hartford a more attractive place to do business.

Hartford, CT economic development plan

Hartford, CT economic development plan (photo -lukebronin.com)

The Hartford economic development plan, called “Getting Hartford Working Again,” prioritizes twelve actions organized into four categories – creating new jobs, retaining existing jobs, getting more Hartford residents hired, and making Hartford more attractive to employers.

In a release announcing the plan, Bronin says that “We need to take a comprehensive approach to job creation, and the Mayor needs to be Hartford’s Chief Economic Development Officer, working every single day to retain jobs and push for new opportunities for Hartford residents.”

Here’s a summary of the main points highlighted in the Getting Hartford Working Again plan:

Retaining Jobs – Action items under this category include rebuilding relationships with existing employers, and starting a small business resource center that will not only respond to inquiries but will also systematically contact existing businesses, and work to ensure that Hartford businesses are taking full advantage of incentives wherever possible.

Create New Jobs – Under this part of the plan, Bronin suggests taking advantage of zone designations, targeting brownfields, and restructuring the way City Hall engages in marketing the city and recruiting new businesses in partnership with external organizations like the MetroHartford Alliance and the Hartford Business Improvement District (HBID).

The plan also calls for a complete revamp of the city’s online presence, so that businesses considering moving to Hartford can get information more easily. The new website will provide all the relevant information, from opportunities and resources to regional statistics, and the benefits of moving to Hartford.

Making Hartford more attractive to employers – Actions items in this category include government restructuring and cost management, avoiding headlines about waste and mismanagement, and coming up with a strategic plan that incorporates the best thinking about how arts and culture can catalyze economic development, and how they can be integrated in all economic development efforts.

Get More Hartford Residents Hired – Create a new jobs pipeline initiative called Hartford Works, and lead by example in hiring Hartford residents. Ensure that every contract for a City-assisted development project over $5 million includes language to set aside 40 percent of total project hours for Hartford residents and 25 percent of the total dollar amount for subcontractors to minority business enterprises. Use Hartford’s purchasing power to support local businesses.

First Five Connecticut Economic Development Program Attracts Synchrony Financial Expansion

Consumer financial services company Synchrony Financial is expanding its operations in Connecticut to add 200 to 400 new full-time jobs in the state while retaining 310 jobs.

Synchrony Financial

Synchrony Financial (photo -synchronyfinancial.com)

Synchrony Financial is the latest in a string of companies to take advantage of the First Five Connecticut economic development program, under which the company could get as much as $20 million in grants based on its job creation and retention plans.

The First Five program, signed into law by Governor Dannel P. Malloy on July 8, 2011, was designed to attract new companies to Connecticut, retain existing businesses and their job levels, and encourage expansions.

The First Five program offers select companies approved by the Connecticut Department of Economic and Community Development (DECD) a package of incentives for creating at least 200 new full-time jobs. In addition to the incentives for the first 200 jobs, participants continue to get tax credits for each net new job created after that.

Companies that are already participants in the First Five Program include Cigna, ESPN, NBC Sports, Alexion, CareCentrix, Deloitte, Bridgewater, Charter Communications, Sustainable Building Systems, Navigators, and PitneyBowes.

Synchrony Financial now joins this list and stands to get up to $20 million, including $10 million for the first 200 jobs they create in Connecticut.

Synchrony Financial president and CEO Margaret Keane said in a release that “We are pleased to participate in the First Five program to maintain our strong presence in Connecticut and continue to invest in the community by creating professional job opportunities.”

Gov. Malloy said in the release that this announcement that a financial services and technology innovation leader is adding hundreds of new jobs in the state demonstrates that Connecticut is moving forward.

DECD commissioner Catherine Smith added that this new partnership between the state and Synchrony Financial will result in hundreds of new jobs and substantial new capital investment, which is a great economic development boost for the region.

By getting the company, which is headquartered in Stamford, CT, to participate in the First Five economic development program, Connecticut has also effectively ensured the retention of Synchrony Financial’s headquarters and existing jobs for many more years.

This announcement comes on the same day that the company cut the ribbon and officially opened its new Charlotte, NC office building in the Ballantyne Corporate Park. Their Charlotte location has almost 400 employees, and the new Class A office building has been built for growth to accommodate about 1,000 employees across their various divisions. Synchrony Financial has plans to grow its workforce in the Charlotte area, and has already started hiring.

Kurt Grossheim, executive vice president and COO, Synchrony Financial, said in a release that “We’re proud to call Charlotte home to one of our key sites, and have plans to be here for many years to come.”

Synchrony Financial (NYSE:SYF), formerly GE Capital Retail Finance, was spun out of GE Capital as a separate company in July 2014, and raised $2.88 billion in its IPO. Their products include private label credit cards, promotional financing and installment lending, loyalty programs and savings products.The company has 11,000 employees managing 60 million customer accounts and $35 billion in deposits, and handled $103 billion in financed sales last year.

GE Forms Exploratory Committee to Look Into Corporate Headquarters Relocation

General Electric is considering relocating their corporate headquarters following the Connecticut Legislature’s approval of a tax package against which the company had voiced opposition in a public statement.

GE Fairfield, CT HQ entrance

GE Fairfield, CT HQ entrance (photo -Markvs88/wikipedia)

After passage of the budget bill that include a significant and retroactive tax hike on businesses, GE CEO Jeffrey Immelt issued a memo to employees in which he says that “As a result of this law passing, I have assembled an exploratory team to look into the company’s options to relocate corporate HQ to another state with a more pro-business environment.”

Immelt added that this will be a thoughtful process that will take into consideration many factors, including employee impact.

State Senator Tony Hwang from Fairfield, CT said in a statement that if GE were to leave the state it would truly be a disaster of epic proportions. “I’m afraid to say that it would trigger a massive economic earthquake with Fairfield at the epicenter and aftershocks reverberating throughout the entire state,” added Sen. Hwang.

There’s little doubt that a GE headquarters relocation would be a huge blow for Connecticut economic development, in terms of jobs, spending and tax revenues. General Electric has about 6,300 employees in Connecticut. Then there’s the impact on GE suppliers and some 65,000 supplier jobs, which would also be considerable if GE shifts even a part of the $14 billion it spends on goods and services purchased from Connecticut companies.

Then there’s also the site selection impact created by the loss of one of the prestigious corporate headquarters in the world. If GE relocates out of the state, it will have an impact on other projects that might be considering locating or expanding in Connecticut.

Immelt adds in the memo that they should pay their fair share and give back to their communities, but “we can compare Connecticut with other states where small and large businesses have a better environment to thrive and compete.”

It’s not just GE either. Boehringer Ingelheim Pharmaceuticals, Inc. has issued a statement in which it said that these tax proposals would stifle innovation, especially R&D of critical medicines, and have far-reaching implications on their ability to plan and make long-term decisions. They also note in the statement that “The current proposal will undermine the financial feasibility of continued capital investments at our Ridgefield/Danbury site.”

Other companies, such as Travelers and Aetna that have a large presence and thousands of jobs, have also voiced their opposition to the tax hike by Connecticut.

Following this backlash, Governor Dannel P. Malloy is now considering asking the State Legislature to roll back some of the tax hikes that the business community is objecting to.

New London Economic Development Group Considers Project in Fort Trumbull

A decade after Fort Trumbull became the most controversial economic development project in the history of Connecticut and perhaps the United States, the City of New London, CT is looking for a fresh start in Fort Trumbull with an $18 million residential development project.

Bulldozed lot in Fort Trumbull with Pfizer facility in background

Bulldozed lot in Fort Trumbull with Pfizer facility in background (photo – Nard/wikipedia)

At its next meeting, the Renaissance City Development Association (RCDA) is about to consider a proposal for a 104-unit residential development in the Fort Trumbull neighborhood by Pennsylvania-based developer A.R. Building Co.

RCDA is a non-profit New London economic development group comprised of business owners, community leaders and citizens working to improve the economic health and quality of life in New London.

It is also more famously known as the organization that came up with the Fort Trumbull Municipal Development Plan (MDP) that led to Kelo v. City of New London, an eminent domain case ultimately decided in favor of the City by the United States Supreme Court.

The landmark case set the precedent for allowing the use of eminent domain to transfer land from one private owner to another one for furthering economic development.

New London took on the Fort Trumbull MDP after the closure of the 32-acre Naval Undersea Warfare Center (NUWC) at Fort Trumbull, and the subsequent announcement by Pfizer Inc. that they would establish a $350 million global R&D headquarters complex on a site adjacent to the Fort Trumbull area.

The project faced legal challenges from residents who were losing their homes, and the case eventually ended up in the U.S. Supreme Court which decided in favor of the City of New London in June 2005. But the project didn’t take off even after that, because the developer could not secure financing for it. The disputed land within the Fort Trumbull area stayed vacant until 2010, and was turned into a dump for storm debris in 2011 after Hurricane Irene.

Meanwhile, Pfizer closed down the New London research center and relocated more than 1,400 jobs in 2010 when its economic development agreement ended. The Pfizer research center now houses the Electric Boat submarine engineering offices.

The City and RCDA have continued working on improvements within the Fort Trumbull District, including construction of a public access riverwalk along the shoreline, construction of new roundabout intersections, and a storm water pump station.

If the new proposal for a residential complex in Fort Trumbull is approved and built, that will be another milestone and a turning point in this saga that could actually end on a happy note for the City and the people of New London.

Connecticut Economic Development Agreement With UBS Extended to 2021

The economic development partnership agreement between Connecticut and UBS has been amended to reflect the Swiss financial services company’s continued commitment to the state through 2021.

UBS trading floor in Stamford, CT

UBS trading floor in Stamford, CT (photo – Daniel Bonatto/Flickr)

UBS entered into a five-year agreement with the State of Connecticut back in Aug 2011, ensuring that the company retained 2,000 high-quality, high-paying jobs for the duration of the agreement, and continued making significant investments in infrastructure, technology and employee training.

This agreement has now been extended through 2021, incenting UBS to maintain its presence in Connecticut with no further outlay required by the state.

Governor Dannel P. Malloy said in a statement that the extended agreement clears up any doubt about the company’s intentions in Connecticut. The Governor added that it makes sense for UBS as well as for Stamford and the entire state, given how important the financial services sector is to the local and state economies.

Connecticut’s insurance and financial services sector employs 111,600 people, accounting for seven percent of the state’s total employment. The sector’s annual wages are 144 percent higher than the average wage in Connecticut.

As one of the larger financial services companies in the state, UBS helps anchor the sector’s strong cluster in Connecticut. This makes the 2,000 UBS jobs highly valuable to the state. It’s also a prestigious project, with the huge UBS trading floor in Stamford housing 1,400 traders and staff who handle more than $1 trillion in transactions in a single day of trading.

Under the terms of the original UBS-Connecticut economic development agreement, the company received a $20 million loan that was fully forgivable subject to retention of their 2,000 jobs in the state for the five-year period.

As per the amended agreement, the CT Department of Economic and Community Development (DECD) will do a job audit at the end of each year to figure out the percentage of loan forgiveness to be awarded to UBS for the year in question.

The formula will be used every year through to 2021. If UBS fails to meet the minimum employment obligation for any year, they will have to pay the related loan amount plus a 7.5 percent penalty.

DECD Commissioner Catherine Smith that this new formula is a win-win proposition which provides incentives for the company to retain its employees in the state, while requiring repayment of a portion of the loan each year should jobs decline.

UBS Group Americas COO Kathleen Lynch said they appreciate the partnership with Gov. Malloy and the State of Connecticut, and added that it remains an important market for UBS. Lynch noted that UBS and their employees have been active members in communities from Stamford to Hartford for more than a decade, and they are pleased to continue the collaboration.

DECD, UNH, CONNSTEP Partnership Helps C. Cowles Consolidate Operations in North Haven, CT

C. Cowles & Company is relocating their combustion technology division and consolidating it with their corporate offices and four divisions in a new facility in North Haven, CT.

C. Cowles & Co.

C. Cowles & Co. (photo – ccowles.com)

As part of the relocation and consolidation, C. Cowles will be adding 59 new jobs to their existing workforce of 116 employees.

The company chose to relocate to the facility in North Haven that was formerly the Marlin Firearms factory after they were provided assisted in their relocation process by quasi-public state agency CONNSTEP and the University of New Haven.

Cowles CEO Lawrence C. Moon, Jr. contacted the University of New Haven for assistance from their graduate engineering program. A faculty member and five Masters’ Degree candidates were assigned to help the company relocate their Carlin Combustion Technology division to North Haven from its current location in Massachusetts.

A job fair the company conducted in North Haven resulted in more than 400 applications from people looking for employment.

“By partnering and connecting companies with our educational institutions, we are ensuring that Connecticut manufacturers have the workforce they need to compete in a global market and position our state for a manufacturing revolution,” said Governor Dannel P. Malloy.

The company also contacted CONNSTEP, a non-profit supported by the Connecticut Department of Economic and Community Development, that provides process improvement consulting services to businesses in Connecticut.

The entire relocation project was then carried out as a partnership effort involving C. Cowles, the UNH engineering team, CONNSTEP and DECD.

DECD is supporting the project by providing C. Cowles a package of Connecticut economic development incentives including a $250,000 job training grant and a $1.77 million loan to help the company acquire the building in North Haven and finance the relocation, retrofits and environmental mediation.

Furthermore, if the company meets its job creation and retention commitments, a part of the loan amounting up to $885,125 will be forgivable.

Mr. Moon noted that the financial and technical support, and the Malloy Administration’s business-friendly attitude, is essential for Connecticut to grow its manufacturing space, and added that without all this, they would not have consolidated their businesses from out of state to Connecticut.

CONNSTEP CEO Bonnie Del Conte said they are honored to be working with C. Cowles, and proud to be a part of Connecticut’s economic development strategy.

Dr. Nadiye Erdil, assistant professor at the UNH Tagliatela College of Engineering, said their partnership with C. Cowles provided a great opportunity for their engineering students to learn and use their skills and knowledge to make a positive impact on the area’s economic development.

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