Hartford Business Journal

HARTFORDBUSINESS.COM | FEBRUARy 20, 2023 9 NEW! Express Strategies Insight Series Quick-Read Booklets FREE Downloads made to keep the headquarters here, he said. "We were, I think, left with the impression there was nothing immi- nent, there were no further changes contemplated," Denious said of talks with LEGO in which he was involved. "I think they did share the challenge of getting folks to their Enfield loca- tion, but that was really the extent of what they shared with us over the course of 2022." LEGO declined an interview request for this story, but referred an HBJ reporter to the press release the company issued in January. In that announcement, Skip Kodak, president of the LEGO Group in the Americas, praised the company's future ability to attract and retain talent in Boston, as well as the Massachusetts city's world-class academic institutions, skilled work- force and great quality of life. Denious said AdvanceCT plans to continue discussions with LEGO about not only why the company moved, but how Connecticut repre- sentatives could have learned more and interceded earlier. "The question is what can we learn? What can we do better," Denious said. "That's what we can take away from this. Let's have a candid conversation. We already have but we want to continue. Let's peel this onion. Why didn't you give us the chance to pitch Hartford? Why not? You drew conclusions before you even gave us a shot on goal." New retention specialist Two weeks before LEGO announced its planned move, Advan- ceCT had some news of its own. It hired Catherine Scangarella as its new executive vice president of business retention and expansion. Part of her job is to try to make sure companies like LEGO don't leave the state. There was a bit of irony in the timing of her arrival. Denious said Scangarella will be a key part of the state's beefed-up business retention arsenal. Most recently she worked as chief busi- ness development officer for Choose New Jersey, a business recruitment nonprofit in the Garden State much like AdvanceCT. LEGO's departure draws attention to Lamont administration's new incentives strategy By Michael Puffer mpuffer@hartfordbusiness.com W hile the state never offered LEGO an incen- tives package to main- tain its Enfield headquarters, the Danish toymaker's pending move to Boston draws at least some attention to the Lamont administra- tion's new business retention and growth playbook. Former Department of Economic and Community Development (DECD) Commissioner David Lehman spearheaded efforts to shift Connecticut away from offering upfront loans and grants to companies, especially businesses not interested in adding new in-state jobs. Instead the state's JobsCT incentives program, which was approved by lawmakers last year, is predominantly designed to reward companies that relocate or add jobs in Connecticut, not maintain existing ones, said Peter Denious, CEO of AdvanceCT, the state's nonprofit business recruitment and development arm. Under the program, employers adding 25 or more staff in Connecticut can earn a tax rebate worth 25% of the withholding taxes from net new employees — or 50% in distressed municipalities — for five to seven years. Those tax rebates run from years three through seven of the added hires, and can potentially carry into years eight and nine. The jobs created must pay at least $37,500 annually and be at least 85% of median household income for the municipality in which they are located. "That is the basic incentive for companies that grow and stay in the state," Denious said. "The state has gotten out of the business of picking winners and losers by creating customized programs." That doesn't mean exceptions can't be made. The Lamont admin- istration last year negotiated a deal with Stratford-based Sikorsky Aircraft Corp., making the company eligible for up to $75 million in tax credits, contingent on the helicopter maker winning major U.S. Army contracts. In exchange, Sikorsky parent Lockheed Martin promised to keep the company's headquarters in Stratford for two decades and main- tain more than 7,000 direct jobs at its Connecticut facilities. Lawmakers approved that deal last year, although it now faces some uncertainty after it was announced in December that Sikorsky lost out on a $1.3-billion U.S. Army contract to replace the Black Hawk helicopter. "That was a very specific situa- tion," Denious said of the Sikorsky deal. "That sort of speaks for itself, given the number of jobs, given the presence of the company. Excep- tions are made but the vast majority of incentives are structured by the JobsCT incentive." Current DECD Commissioner Alexandra Daum also described the JobsCT tax rebate as "the main tool in the toolkit" for business retention and recruitment. "It does not give a credit for retention of existing jobs," Daum said. "We don't think we should be paying a lot of taxpayer money to retain jobs. This is not the way this administration is doing economic development." Scangarella's position isn't entirely new. She is stepping into the shoes of AdvanceCT's former vice presi- dent of partnerships, but will have a narrower focus. Unlike her predecessor, Scan- garella is not responsible for coordinating with the state's many other municipal and state economic development entities. Those duties now fall to a subordinate. Instead, she will spend her time keeping tabs on and interacting with businesses. In her first month on the job, Scangarella has put 1,000 miles on her Volvo S60, visiting businesses around the state. "For business retention, the best way to be successful is to research the companies that are showing signs of growth or signs of change, then figure out which ones are the most important to meet with," Scan- garella said. "I think one of the most important things is establishing a rela- tionship with us, so they know where to turn when they've got questions or needs." Alexandra Daum is the commissioner of the state Department of Economic and Community Development. HBJ PHOTO | STEVE LASCHEVER

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