Last January, Federal Reserve Bank of New York economist Rae Rosen summed up the Fairfield County economy as “getting worse more slowly.” It was a pronouncement that appeared on target as businesses struggled to recoup sales while coping with continued high costs, had difficulties accessing financing and faced uncertainty over the direction of federal health-care reform.
Those struggles continue to affect the most obvious barometer of business health ”“ employment. As of November, the unemployment rate in lower Fairfield County was 8 percent, up slightly from a year earlier, according to the Connecticut Department of Labor. The Danbury area labor market improved, with an unemployment rate of 6.8 percent, down from 7.1 percent in November 2009.
Tight race for governor
Many in Fairfield County say 2010 will be best remembered for the fiercely contested elections of 2010 at the state and federal level. In a close race that hinged largely on jobs, Dan Malloy edged Tom Foley to replace M. Jodi Rell as governor.
“The election of Dan Malloy is probably up there at the top, only because it represents some level of hope that for the first time in a lot of people”™s lifetimes here we have someone at the top of the food chain who is actually from (Stamford), and who looks at Fairfield County not as just producing taxes,” said David Lewis, CEO of Stamford-based OperationsInc and a newly elected director of the Connecticut Business & Industry Association (CBIA). “I think his challenge this year is how does he wrestle this deficit down? How does he negotiate better contracts with the unions that put him in office?”
How effectively Malloy does so in league with a Democrat-dominated Connecticut General Assembly will have a major impact on whether businesses choose to expand here, according to Bonnie Stewart, vice president of government affairs for CBIA. That issue came into stark view this year when Hartford-based United Technologies Corp. turned down $100 million in state incentives to keep open a pair of Pratt & Whitney plants, saying it could still do better by moving the work elsewhere.
UTC intends to move jobs
Many were stunned last spring when UTC executives declared the company”™s intent to move additional work out of Connecticut. Among those executives was Jeff Pino, president of UTC”™s Stratford-based subsidiary Sikorsky Aircraft Corp., whose X2 prototype helicopter earned wide interest after breaking a speed record this year.
“We”™ve taken a real strong opportunity during (the past five years) to put more than half of our direct labor hours outside Connecticut, ”¦ and every place we go, generally, is lower cost than Connecticut,” Pino said in March. “We can”™t ”¦ win while operating from Connecticut.”
Still, the state”™s high costs did not stop Starwood Hotels & Resorts Worldwide Inc. from accepting about $95 million in incentives to relocate to Stamford from White Plains, N.Y., a deal hatched while Malloy was mayor and finalized during new Mayor Mike Pavia”™s first full year in office.
For some, Building and Land Technologies”™ development of Harbor Point will be the milestone for which 2010 is best remembered, beginning with the overhaul and rapid leasing of the apartments in the former Yale & Towne factory property and continuing through the construction of multiple residential and office buildings and the opening of New York City-based Fairway”™s first Connecticut supermarket.
Clairol Stamford plant sold
Procter & Gamble, meanwhile, sold its massive Clairol plant in Stamford to three local investors, who promptly won a commitment from New York City-based Chelsea Piers to establish a sports and entertainment facility at the site, as well as studios for television, film and digital production.
“If you had to sum it up, we had some ”¦ projects and ideas and economic development that came to fruition in 2010,” said Jack Condlin, president of the Stamford Chamber of Commerce. “My biggest ”˜wow”™ moment was the opening of Fairway ”¦ when I walked through that store and saw how they were able to create sections where it was many markets under one roof. And I”™ll tell you, there”™s a lot of New York plates in that parking lot.”
Besides Starwood and Fairway, BLT has attracted marquee tenants like McKinsey & Co. and Louis Dreyfus, and midway through the year rumors flew within the real estate community that the hedge fund Bridgewater Associates was considering consolidating its headquarters operations in Stamford from its two sites in Westport.
After hedge funds exited 2009 with big improvements from the debacle of 2008, the industry was up 7.8 percent this year through November, according to a hedge fund index published by Credit Suisse and Dow Jones. All the while, the financial industry nervously eyed federal financial reform taking shape under U.S. Sen. Chris Dodd. Another concern was Operation Broken Trust, under which federal and state prosecutors said they had uncovered significant conspiracies to commit fraud and insider trading. Hundreds of arrests have been made and more are promised.
Capital markets regain confidence
In some respects 2010 will be remembered as a year of renewed confidence in the capital markets, signaled locally by CRT Capital Group LLC raising $225 million for a new broker-dealer company in Stamford. Several companies filed for initial public offerings of stock: Ridgefield-based Fairfield County Bank Corp., Norwalk online travel engine Kayak Software Corp. and Affinion Group Holdings Inc., even as the affinity marketing company relocated its headquarters from Norwalk to Stamford.
The smallest companies similarly got a boost, after the federal and state government created several new programs to spur financing for small businesses. The Connecticut General Assembly passed a bill allowing “angel” investors to take a tax credit for up to 25 percent of their investments in early-stage startups, with several in Fairfield County among the first to qualify for such investments under the new law.
