With at least three major expansions under way in Connecticut heading into the second half of 2011, Gov. Dannel P. Malloy appears to have picked up some support for his contention that the state”™s recovering economy can absorb tax hikes without scaring off major corporations.
All signs continue to point to Bridgewater Associates”™ deal to occupy nearly a quarter of a million square feet of space at Wilton Woods Corporate Center as an expansion rather than a relocation from existing offices in Westport and Norwalk, as first reported by the Fairfield County Business Journal this month.
Campbell Soup Co., meanwhile, revealed it is investing $30 million to create a 34,000-square-foot innovation center at the Norwalk headquarters of subsidiary Pepperidge Farm, which will also see extensive upgrades to its main offices at 595 Westport Ave., which is already among the larger employment sites in Norwalk.
Designed by the Stamford office of Perkins Eastman and by the Springfield, Mass.-based Dennis Group, the Pepperidge Farm center will be designed to secure Leadership in Energy and Environmental Design certification from the U.S. Green Buildings Council, with a range of energy efficiency, water conservation and daylight harvesting techniques, and will use recycled building materials in the construction.
Inside, the innovation center will house a state-of-the-art pilot plant with product development and testing lines, culinary kitchens, scientific labs and meeting rooms. The company expects to break ground on the project, pending permits and other governmental approvals, in August 2011 and complete construction in the fall of 2012.
“In sum, the new facility will allow us to continue answering the question that Pepperidge Farm founder Margaret Rudkin was famous for asking: ”˜What”™s next?”™” said Pat Callaghan, president of Pepperidge Farm, in a prepared statement.
The same question sums up what is on the minds of many Malloy watchers, after the governor found the first taker for his “First Five” economic development offer ”“ Cigna Corp., which took at least $50 million in incentives to tab Bloomfield as its official headquarters and pad its 4,000-strong workforce by at least 200 people and as many as 800.
“That is a momentous occasion because it shows you that when we go work, when we have a focus, what we can actually accomplish,” Malloy said, speaking this month in Shelton at a gathering of the Greater Valley Chamber of Commerce.
Left mostly unsaid ”“ both by Malloy and chamber members who got the opportunity to grill the governor on his business policies ”“ is that the state has drawn the new jobs despite hikes in its income, sales and myriad other taxes under Malloy.
“I know that annoys the heck out of a lot of people ”“ it annoys the heck out of me, quite frankly,” Malloy said. “I didn”™t run to be governor of a state that has to enhance its revenue in that way. On the other hand ”¦ the deficit was too big to cut our way out of it, too big to tax our way out of it ”“ it needed to be some combination of the two.”
Lease transactions shot upward in the second quarter, according to a report by Cushman & Wakefield of Connecticut, but the activity failed to ward off an increase in the vacancy rate. Still, at the Shelton conference multiple executives and company owners stepped up to voice support for Connecticut as a place to do business, including Dusty Tenney, president of PerkinElmer”™s analytical sciences and laboratory services unit, who said the company recently renewed its lease in Shelton “for the foreseeable future,” where he said PerkinElmer employs 600 people.
Others were critical, however, including one attendee who calculated Cigna is receiving what amounts to $250,000 per job over the lifetime of the deal, and asked the governor whether he thought it was fair that his own business did not receive incentives for hiring more than a dozen people in the past year.
“We were in competition to lose 5,000 jobs,” Malloy said, factoring in outside jobs Cigna supports in Connecticut that could have been lost. “So when you do your math, understand that that produces $500 million in employee income ”¦ All of that ignores the significance of taking the corporate headquarters from Philadelphia.”
Malloy did not specify details on any competing package that could have shut down Cigna”™s Bloomfield operation, given that Connecticut is not pulling anywhere near that number of jobs from Philadelphia or other Cigna sites.
Malloy added that incentives do exist for small businesses in Connecticut and hinted that more could be on the way when he convenes a special session of the Connecticut General Assembly this fall with a focus on rekindling economic growth.
“Understand that we”™re going to have some losers,” Malloy said, noting the difficulty in projecting which companies will succeed under state support ”“ and which ones will stay for the long term. “I accept that. We”™ll defend them, as long as the process was timely and executed well.”
Tom Orkisz, owner of the Shelton-based deli-container business Inline Plastics Corp., said his company recently nailed down a low-interest loan for $500,000 from the Connecticut Department of Economic and Community Development (DECD), which it plans to use on an expansion here. He expressed bewilderment at what he called an “incentive game” necessary to secure the package.
“The process was ”“ um ”“ interesting,” Orkisz said. “It”™s kind of mysterious and you need to know a little bit about how to play the game ”¦ Our process ultimately resulted in our getting something, but it took a while and there were almost times where we got frustrated and said, ”˜All right, maybe we”™re just going to go somewhere else.”™ We kind of hung in there and it worked out.”
DECD Commissioner Catherine Smith said it sounded as though the agency “didn”™t do a terribly good job” in the case of InLine Plastics, and Malloy said he is continuing to work at building a pro-business culture in Connecticut government.
“Every commissioner who works for me understands that they have a role in making sure everyone plays by the rules,” Malloy said. “But they also have a role in making sure that those rules are reasonable and that they are supportive of job creation in the state of Connecticut. And any commissioner who doesn”™t get that message won”™t be a commissioner very long.”
What a vanity piece! To paraphrase Lloyd Blankfein, you good old boys in Fairfield County must be doing God’s work.
Was it 5,000 jobs lost in May and 4,000 in June? Or was it the reverse? Can’t remember. Flat line that number through December, and see if that doesn’t sober you up. You can’t run the state as if you were a mayor.
Over 100,000 of us in the private sector have lost jobs since 2008. and this guy can’t lay off 7,500 state union employees who consume 30% of the state’s budget? Feckless, but politically shrewd.