Hartford Business Journal

6 Hartford Business Journal • October 10, 2016 www.HartfordBusiness.com TOP STORY CT, RBS ink $120M subprime settlement Connecticut will collect $120 million from one of the largest underwriters of securities that were at the root of the nation's subprime mortgage-lending debacle — the largest settlement in state history, authorities say. State Attorney General George P. Jepsen and state Banking Commissioner Jorge L. Perez announced the settlement last week with RBS Securities Inc., stemming from Connecticut's probe into RBS's underwriting of residential mortgage-backed securities in the lead-up to the 2008 financial crisis. Those securities, a type of investment product, were backed by the mort- gage payments of thousands of homeowners, state investigators said. In- vestors in these securities are entitled to the cash flows — the interest and principal payments — from the underlying mortgage loans. Prior to the 2008 financial crisis, these securities were backed by thou- sands of subprime loans that homeowners could not pay back when home prices collapsed and the recession took hold. According to state investigators, from Jan. 2005 to Dec. 2008, RBS led underwriting for some 250 residential mortgage-backed securities deals valued at $250 billion. As lead underwriter, RBS was required to conduct due diligence on the pools of residential-mortgage loans that collateralized its RMBS (residential mortgage-backed securities) deals, investigators said. But Connecticut investigators said their probe ultimately determined that RBS's vetting of those deals was inadequate to the point that its due diligence failed to uncover mortgages that shouldn't have been included in the securities pools. After subtracting $250,000 to send the banking department for financial education and training and a financial literacy program, the $119.75 million balance will be remitted to the state's General Fund, authorities said. SMALL BUSINESS Relocation, expansion in E. Windsor brewery's future The Broad Brook Brewing Company, which opened in East Windsor in 2013, becoming that town's first brewery, plans to move operations to Suffield, where its owners want to build a newer, bigger brewery. That's according to an application filed last month with the Suffield Planning and Zoning Commission, where the brewery's owners are seeking a special permit to build a 12,000-square-foot brewery on a 2-acre lot in the Mach One Industrial Park off of Route 75 in Suffield. According to a statement of purpose filed with the application, the brewery's owners stated that in the three years since they opened at 2 North Road in the Broad Brook section of East Windsor, they've reached capacity and want to expand. But another reason why the owners decided to move out of East Windsor could have been friction with town officials. – Matthew P. Knox and Anthony Branciforte | Journal Inquirer HEALTH CARE Thousands in CT eligible for tax credits through insurance exchange A new federal analysis shows 15,000 Connecticut residents now buying indi- vidual health coverage outside of the state exchange may be eligible for Afford- able Care Act premium tax credits in 2017. Since the Affordable Care Act became law, millions of Americans gained or paid less for coverage using premium tax credits available through the Health Insurance Marketplace, or state exchanges like Access Health CT. The U.S. Department of Health and Human Services (HHS) released data showing that 15,000 Connecticut residents who currently purchase "off-mar- ketplace" individual coverage may qualify for tax credits if they shop for 2017 coverage through the state exchange. Prospect completes acquisition of ECHN; names interim CEO for Karl Prospect Medical Holdings Inc. has completed its acquisition of Eastern Con- necticut Health Network (ECHN), which Prospect said helps ensure the com- munity healthcare system's future. Michael Collins was named interim CEO to replace ECHN's former president and CEO Peter Karl, who resigned effective Sept. 30 for health reasons. Karl had been arrested for DUI earlier in September. Collins, a senior healthcare executive with more than 20 years of experience in hospital leadership roles, has been serving as chief integration officer for Prospect at ECHN for the past seven months. The transfer of ownership of ECHN, holdings of which include Manchester Memorial and Rockville General hospitals, follows the receipt of all regulatory approvals by the for-profit Prospect, based in Los Angeles. Prospect paid $105 million for ECHN and plans to spend $75 million in capital improvements on those facilities over the next five years. ECONOMIC DEVELOPMENT & CONSTRUCTION CCM: CT's distressed cities bear larger burdens Bearing some of the heaviest burdens in Connecticut, the cities of Hartford, Bridgeport, New Haven and Waterbury must be strengthened as economic hubs, according to a report by the Connecticut Conference of Municipalities. As four of the largest cities in the state, the four metropolitan areas are also the poorest, dealing with higher poverty rates, education disparities, revenue challenges, and increased crime rates. At the same time, as supports to their surrounding communities, their success is "crucial to the success of the state as a whole," according to the CCM Candi- date Bulletin September 2016 entitled "Large Cities: Disproportionate Burden." Statistics paint a striking portrait of the challenges. Poverty rates are at least twice as high for these cities as compared with the state as a whole, while more than half of the state's homeless can be found there. Their unemployment rates exceed the state average of 5.9 percent in every case: Hartford is at 11 percent. The cities also have higher mill rates than the 18.81 average for the state. $5M in brownfield redevelopment grants available The Connecticut Department of Economic and Community Development (DECD) is accepting applications for $5 million in competitive grants to remedi- ate and redevelop brownfield sites. Since 2012, the state has invested $173 million to investigate, clean up and revitalize more than 100 old or vacant factories, mills, warehouses and other contaminated sites and structures. The funding will be made available under the Connecticut Brownfield Remedi- ation Program. Municipalities and economic development agencies are eligible. Awards may be used for a range of brownfield assessment, remediation and redevelopment activities, including abatement, demolition, site investigation and assessment and more. Applications are due Nov. 16. ECONOMY & LABOR Forbes 400 includes eight CT billionaires Five Connecticut men and three women are named on the 35th annual Forbes list of the 400 wealthiest people in the country. These 400 wealthiest people have a record-breaking, combined total net worth of $2.4 trillion, according to Forbes. The minimum net worth needed to make this year's list remains at $1.7 billion. Connecticut's eight individuals, with their rank and net worth are: Ray Dalio, 25th, $15.9 billion; Steve Cohen, 31st, $13 billion; Paul Tudor Jones, 120th, $4.6 billion; Karen Pritzker, 131st, $4.3 billion; Stephen Mandel, 274th, $2.5 billion; Peter Buck, 290th, $2.4 billion; Alexandra Daitch and Lucy Stitzer tied at 374th with $1.8 billion each. GOVERNMENT, POLITICS & LAW $1.8M OK'd to cut wait times at DMV contact center Connecticut's Bond Commission has approved $1.8 million in modernizations for the Connecticut Department of Motor Vehicles' (DMV) outdated customer- contact center. The objective of the upgrades is to improve convenience and timely service for cus- tomers, including reducing wait times on telephone calls, said Gov. Dannel P. Malloy. The technology in use now was last updated in 1993 and annually leaves several hundred thousand telephone callers stranded and unable to get through to a DMV agent because of the system's limited capacity. The new, upgraded system will give customers the option to complete regis- tration renewals over the telephone and get calls back instead of waiting in line. BY THE NUMBERS $15.9B The net worth of Connecticut's richest resident, Ray Dalio, who runs Westport hedge fund, Bridgewater Associates. $260,000 The median sales price of a Connecticut single-family home sold in August, according to the Warren Group. $10B The price tag of U.S. Rep. John Larson's ambitious plan to build two tunnels to replace portions of I-84 and I-91 running through Hartford. 10.35% The percentage of Hartford residents who don't have health insurance, according to a new analysis from WalletHub. TOP 5 MOST READ on HartfordBusiness.com ■ Forbes 400 includes eight CT billionaires ■ AAA Northeast digs in heels on decision to stop licensing services ■ CT, RBS ink $120M subprime settlement ■ Cabela's being sold to Bass Pro Shops ■ ConnectiCare opening retail centers for CT customers STAY CONNECTED For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly, CT Health Care Weekly www.HartfordBusiness.com/subscribe WEEK IN REVIEW State Attorney General George P. Jepsen. P H O T O | C O N T R I B U T E D

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