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www.HartfordBusiness.com • March 26, 2018 • Hartford Business Journal 27 Reporter's Notebook Gregory Seay | gseay@HartfordBusiness.com Real Estate, Economic Development/Construction, Banking & Finance and Manufacturing MANUFACTURING CT's smaller producers retrying for apprenticeship tax credit C onnecticut's small- and mid-size manufac- turers are trying again to persuade state lawmakers and the governor to grant them access to a tax credit open to larger pro- ducers that train apprentices on their shop floors. Senate Bill 261 would extend the state's manu- facturing ap- prenticeship tax credit to so-called "pass-through entities.'' This is, observers say, at least the third legislative attempt in five years at adopt- ing a measure that many state producers say would make it less costly and less risky for them to hire, train and retain new workers. The Connecticut Business & Industry Associa- tion (CBIA) and Waterbury Regional Chamber have aligned with individual manufacturers, encouraging passage of the bill now pending in the Commerce Committee. The measure essentially would allow investors in, or owners of, small- to mid-size manufactur- ers set up as pass-through entities to claim as a credit against their Connecticut income-tax re- turns a portion of their companies' investments in apprenticeship training. "It's something manufacturers have been asking for for some years now,'' said David Krechevsky, policy director for the Waterbury Regional Cham- ber of Commerce, whose members include many Naugatuck Valley manufacturers. Both chambers of the state legislature em- braced a similar measure two to three years ago, but Gov. Dannel P. Malloy vetoed it, citing con- cerns about its impact on the state's revenue. Tax credits typically reduce the volume of taxes collected by municipalities, states and the federal government. "They think it will open the floodgates for any- one to start looking for exemptions that they can put on their income taxes,'' said Melissa Biggs, a lobbyist for small- and mid-size manufacturers, in- cluding the New Haven Manufacturers Association, under the umbrella of the Connecticut Association of Smaller Manufacturers. Both associations' members, who support the tax-credit expansion, are primarily suppliers and subcontractors to many of Connecticut's top manufacturers, including the aeroparts and building-systems divisions of United Technolo- gies Corp., plus Electric Boat and Kaman Corp. But while state law allows those so-called "C-corporations" to take a credit against their corporate income taxes for each apprentice they hire and train, manufacturers with 100 or fewer workers, and organized as S-corporations, limit- ed-liability companies or partnerships, cannot. CBIA lobbyist Eric Brown said the apprentice- ship program "is one of the most successful things going on to try to address the [manufacturing] labor shortage in Connecticut." Last year, an es- timated 3.5 million U.S. manufactur- ing jobs, includ- ing thousands in Connecticut, were unfilled, according to government data. While S.B. 261 would expand the population of manufacturers eligible for the apprentice- training tax credit, eligible companies and their investors would be limited in the number of ap- prentices who qualify for the credit. Currently, the limit is one apprentice for each certified machinist, tool-and-die maker or other qualified journeyman trade, up to a maximum of two apprentices, said the Waterbury Chamber's Krechevsky. To qualify for a third apprentice, eligible manufacturers must have three or more certified tradespeople on staff. Waterbury machine-shop Executive Vice Presi- dent Selim G. Noujain is a former state repre- sentative who says he backed the 2016 tax-credit expansion effort. Noujain says the state's concerns about the revenue impact of expanding the apprenticeship- training tax credit to pass-throughs overlooks the positive impacts from more of its residents gainfully employed. For instance, he says his family's Noujaim Tool Co. Inc. spends $2,000 a month to provide health coverage to each of its workers and their families. If they were jobless, Noujain said, the state likely would have to bear the healthcare costs for those households. One lingering concern among smaller manu- facturers is the persistent poaching of their staffs by larger companies that exploit the train- ing apprentices get at small shops with higher pay and benefits and career opportunities. Biggs says some manufacturers fret that, if S.B. 261 passes, public lists of participants in the apprenticeship program would make them more vulnerable to poachers. But Noujaim says his company has put 12 workers through its apprenticeship program — all of whom are still there. DEAL WATCH Raymour & Flanigan coming to ex-Nassau's Avon site Raymour & Flanigan Furniture and Mattress Store has purchased for $2.75 million the former Nassau's/Broyles Furniture building in Avon for its newest retail showroom. Raymour & Flanigan Properties LLC bought the 20,500-square-foot building on 2.73 acres at 15 Waterville Road/Route 10 from Mars 44 Acquisition LLC, according to sole broker Reno Properties Group LLC. The property originally was listed at $3.5 million. Scott Milnamow, Raymour & Flanigan's senior vice president for real estate, said the furniture chain has all necessary town approvals to begin an expansion and upgrade that will push the building's footprint to 35,668 square feet. As previously reported, the Liverpool, N.Y., retailer agreed to adhere to certain town-development guidelines in return for approval to enlarge the building. "We are excited to start construction this spring and look forward to opening later this year," Milnamow said. Located at the intersection of Routes 10 (Waterville Road) and 44 (Albany Turnpike), where Raymour says about 40,000 vehicles pass daily, the building originally housed for 35 years a Nassau's Furniture location that closed in Jan. 2013. Later, North Carolina retailer Boyles Furniture & Rugs occupied the site for a period, before announcing in Nov. 2015 that it was vacating. Prior to this latest sale, Reno had pitched the Avon furniture-store site, with 70 parking spaces, as an ideal location for a medical office, bank, pharmacy, restaurant, or free-standing retail or strip center. The Raymour & Flanigan Furniture and Mattress Store, 15 Waterville Road/Route 10, Avon, will have a similar look. BANKING & FINANCE CT banks saw higher profits in 2017 The Federal Deposit Insurance Corp. recently released its state banking performance data for 2017, which shows the 42 federally insured banks in Connecticut saw their collective profits rise 13 percent compared to 2016. Here are some other performance metrics. 2017 2016 Total No. of FDIC-insured banks 42 42 Number of unprofitable banks 3 2 Net income $866M $767M Total assets $111.1B $104.9B Total loans & leases $81.4B $76.5B Nonperforming assets to assets 0.52% 0.59% Source: Federal Deposit Insurance Corp. PHOTO | CONTRIBUTED Workers on the shop floor at Waterbury's Noujaim Tool Co., which has had success with its apprenticeship program. PHOTO | CONTRIBUTED