Florida next?

 

We'll just keep our yacht club, thank you

We’ll just keep our yacht club, thank you

Stamford kills Bridgewater’s headquarters deal. I never thought much of using $115 million in taxpayers’ money to lure the world’s most profitable hedge fund from Westport to Stamford, but turning down a 750,000 sq.ft., $800,000,000 project with the jobs and taxes it would bring seems counterintuitive for a city struggling to attract corporate tenants.

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34 responses to “Florida next?

  1. CatoRenasci

    Maybe we won’t have the Greenwich Town Party any longer if the Dalios head to Florida…. Scott Weicker will be devastated.

    • Anonymous

      These real estate deals are Scott Weicker’s father’s speciality. Guess the old man must be on vacation.

  2. Cos Cobber

    For the record, the 115MM was a tax credit…..ie an offset against CT taxes due. That said, who really needs 2000 of the highest paying jobs in the country, certainly not CT.

    David Martin and Co better really have a plan B. Bridgewater relocating would add $90 million to the state deficit from the loss of income taxes and that’s before the multiplier effect of those incomes trickling through the local economy or before accounting for their lofty incentive income. $90B AUM X 1.5% avg mgmt. fee X 6.5% income tax.

    • FF

      Cobber, if I recall, these jobs are already in Connecticut. And isn’t championing a $100 million construction project paid with tax credits really a stimulus program? And why do so many Republicans support this fully reasonable proposal when it has a hedge fund gazillionaire attached to it, but the exact same deal without one is Socialism?

      • They’re both unwise, and the data prove it.

      • Cos Cobber

        Your wasting your time with me on this FF. We can wax all day about the principals of incentives, but reality is, the big fish get to shop around. Maybe it will stop when Eric Holder opens an investigation on corp relocation antics.

        BLT is in expansion mode, aiming to double their headcount in the years ahead. They can sign a lease tomorrow afternoon for all the space they need in mid-town Manhattan and most of their employees would be happier. Once they do that its a ton of personal income tax revenue headed out the door.

        • Libertarian Advocate

          Maybe it will stop when Eric Holder opens an investigation on corp relocation antics.

          Bwahahahahahahaha. You have a very dry sense of humor CC.

      • hmmm

        FF,

        Don’t get excited and I usually never respond to your comments because they are just stupid but I do agree with you here. Don’t listen to cobber either he is stuck in la la land just go back and read any of his comments, the most wishy washy commenter on this blog.

        And regardless of where the jobs are we shouldn’t be giving money to ANYONE to come here we should change the government tax structure and lure corporations to move here because it’s a great (not now) place to run a business.

  3. GPD Folk

    I’ve been following this story since it started and the arrogance with which BLT has been operating in Stamford’s south end is appalling. They demolished the boatyard a few years back without any permits contrary to agreements and then began to bribe the City and the politicians alike in an attempt to move a company 10 miles down the thruway. Danny Boy Malloy insisted that it remain a boatyard 10 years ago when the project first started…..but has since shifted his position…probably has something to do with the cash BLT set aside for his campaign this year….there’s a lot more to this saga, but….Personally I’m glad the boaters won this one…I’m all for saving the boatyard and I don’t even own a boat!

    • Cos Cobber

      After spending 35MM to clean up the dirty soil, its pretty much a lock the current owners will never open the site up again to strictly boating….at least, not without a long protracted fight for decades to come. The economics of boating biz barely works with free land let alone land at 2.5MM per acre (14 acre site).

      The only way out now is for Malloy and Martin to convince Dalio to either rebuild the Pitney Bowes site or take BLT’s Gateway site at the train station. If BLT migrates out of state it will be a stunning loss to the state economically. Stunning.

  4. We should be congratulating Dalio for having the class to not want to stuff employees in our hometown.
    Watch out for the new “regional required” planning headed our way.
    You have heard their mantra, right?
    “If you want to keep your Town a Town you can keep it that way…period.”
    Tesie especially is going to need our support as the “Urban Planners & PE brains” try to impose more centralized planning on us.

  5. Anon

    Just because the plan was shot down does not mean the boatyard will stay there. It is private property, and the town cannot dictate to private citizens that they must operate a boatyard.

    Unfortunately for the boaters (and I am one) that site now has a higher and better use, given what has happened in the neighborhood. I strongly doubt there will be a boatyard in that location in the future.

  6. pulled up in OG

    I blame Cabrera.

  7. Anonymous

    Why not relocate to Greenwich? He lives here anyway.

  8. Publius

    We never address the issues, whether it be at the local, state or federal level. Connecticut is a very unfriendly place to do business and I would think most people living here and trying to have a business here would agree. The right approach is to make the state friendly for ALL businesses not just those chosen few. These economic incentives (ie The First Five) are just campaigning talking points and do very little to move the needle to longer term sustainable economic conditions.

    Bridgewater is already located in the state, so how does shuffling the deck chairs between Westport and Stamford move the needle? Yes, I always here the line about the new jobs and greater taxes, the reality? usually a myth. Consultants will tell you whatever you want to hear and are a dime a dozen and if the analysis comes from the local, state or federal government you know the analysis is BS ( see earlier blog post about EPA analysis). Bridgewater promises jobs but history (think UBS) is not in the state’s favor. Besides the usual kiss of death of any hot money manager is, too many assets to manage effectively, weak returns and and desire to build a palace to one’s own ego. Bridgewater scores the trifecta. The assets have ballooned because of very good past performance. Their numbers this past year (+/- 6%) trailed the markets by a wide margin. Their institutional client base (the do not manage money for individuals) has less of a need for their services because of the combination of robust markets and higher interest rates. Those 2 functions have substantially reduced the underfunding of defined benefit plans. As a sidebar, earlier in 2013 they admitted that their risk parity model that they have used successfully in the past had some flaws that had to be fixed/adjusted. Investors will be more cautious about throwing more assets into the pot until the returns pick up like those of the past. I think they have been very good managers and have no axe to grind with them, but history is not in their favor

    If you want to look at the silliness of these incentive programs just take a look at the Jackson Labs boondoggle. Most folks in Fairfield County probably are oblivious to this one, so it might be worth a read.

    http://articles.courant.com/2011-10-26/news/hc-session-jackson-lab-1027-20111025_1_bioscience-corporate-taxes-medicine

    $300 million dollars for “300 direct jobs”. Do the math. Don’t be fooled by the larger jobs number tossed around because, those jobs are already in the state.

    If you want to create jobs in this state and stop the cycle of bribing people to either stay or come, try lowering taxes, including the estate tax that drives people out. Cut the bloated bureaucracy in Hartford. Stop shoveling money into our corrupt and failing cities unless there are tangible and measurable outcomes. Stop raiding the transportation fund revenues and actually upgrade the infrastructure. The collapse of Metro North-NH Line is a poster child, not to mention clogged roads at all hours of the day and night. Represent the taxpayers for once and not the public sector unions that perpetuate the cycle of dysfunction in the state. Do that and you can have a boatyard and a boat and be able to put gas in it and take it out and live like Thurston Howell instead of putting the hammer down on the average family to fund a billionaire hedge fund owner.

  9. these special tax deals almost always cost a ton of money per job saved or job created, and the fact that they’re even proposed is testimony to the fact that the state is not attractive to companies looking to expand or move. and, any concession given company A just requires higher taxes on the remaining taxpayers.

  10. Cos Cobber

    Gang, the deal to keep Bridgewater is cheap. The Dalio family alone will pay for the give away with their personal CT income taxes.

    Its a much better deal than Jackson Labs which is a total rip off to the state. But the state did the Jackson Labs deal because its impossible to get anyone to do anything new outside of Fairfield County.

    We can talk all day about the shoddy principals behind such “incentives” but if you were Gov would you really not take the phone call? If so, congratulations because you and just a handful of other govs wouldn’t either…the other 45 would.

    • AJ

      How does moving from Westport to Stamford change anything as far as state taxes? Please explain?

      • Cos Cobber

        Because they could easily move to NYC or FL.

        • AJ

          There’s a half ass argument if I ever heard one. Why not shoot yourself in the head to keep from dying of old age? And why would they move to NYC: that’s an even more expensive place to do business.

          I thought government did not negotiate with terrorists. What are you going to do pay money to every company that threatens to leave the state, and did Bridgewater even threaten to do that? How much empty commercial real estate is there in Stamford that new space needs to be built? How does this benefit the average citizen to take their money and give it to big corporations that already have plenty? Why not rescind the state income tax and make the state more business friendly for every business, not for just the few who have politicians in their pockets?

          How about making the state gun manufacturing friendly? Why is Connecticut doing everything it can to get those businesses to leave? Political correctness? Why not see if you can attract someone to build a lead smelter — Naugatuck might be a good place — I think the last one in the country just shut down. What sort of strange alternate universe is this where robbing the middle class to give to the rich sounds like a good idea?

        • Cos Cobber

          AJ, the mere fact that you are so far out of the loop that you would question why a hedge fund would return to NYC gives me substantial doubts about your understanding of the present day financial workplace.

          These are people driven businesses where individual talents directly drive the bottom line. Plenty of companies have moved operations back to NYC because the labor market wants an easier place to commute too. A lot of people are waiting to see if UBS and RBS head back to NYC in the years ahead because the reverse commute has hampered the hiring of talent. When you are in Manhattan you have access to 25MM people within 1.5hr commute. When you are in Stamford you have access to 1/3rd of that within 1.5hr commute.

        • AJ

          Of course, Cos Cobber, and that’s why you say they could just as easily move to Florida. It seems to me that people go where the jobs are not the other way around. That’s how population migration usually works. As to 25MM as opposed to 8,330,000 people, how many people do you need to interview before hiring someone?

  11. AJ

    If jobs are so important, why are they driving out gun manufacturers? Those jobs could have stayed in Connecticut at a cost of nothing.

    • Libertarian Advocate

      AJ: Apparently Malloy is doing his best to keep gunmakers in CT. it is rumored that he has issued sizable tax-payer funded cash grants to CT gun manufacturers and their suppliers to stay put, at least through November 4th. If they were to leave the state, shedding thousands of jobs in their wake, the big lie that elitist progressives are the working class’s very bestest friends would implode, imperiling Demoncrat control over this State for a generation.

  12. Dear Pontificants
    You may have missed the fact that there was a Recession a few years ago.

    Manufacturing was regulated out of Stamford,( the locks and keys were thrown away) 40 years ago.

    An aggressive “Urban Initiative” was put in place on the peninsula just South of downtown Stamford 10 years agp, just before the R. It flopped. Bankruptcy, neighborhood destruction as well as Eminent Domain use failed miserably. The rescue attempt has been poorly designed, barely managed and needs help.
    More jobs and more boats in Stamford sounds like a good base to go for. There not here.

  13. pulled up in OG

    Pick a city, county, state, enterprise zone anywhere. Red or blue, matters not. Corps been playin’ ‘em like Stradivarii for decades. Boeing current queen of the heap.

    http://pac.greenwichlibrary.org/search~S6?/dCorporations+Taxation/dcorporations+taxation/1%2C3%2C5%2CB/frameset&FF=dcorporations+taxation&1%2C%2C2

  14. Factcheck

    The move is fueled by the need to consolidate its multiple offices it occupies in Westport under one roof. Westport does not have the land for such a large project. Stamford’s main llure is accessible transportation to NYC. As the company grew the need to attract young talent has increased and young talent doesn’t find life in CT attractive. The game theory appears to be simple, squeeze as much as you can a successful and hugely profitable company for a construction site that is unique. It is a negotiation and Stamford is playing its part.

  15. Reality check

    I never write comments, but pushing bridge water away is absurd. Ubs is moving out in 2015, Thomson Reuters is cutting heads dramatically, who is left as a major employer of high income jobs? Picking a boatyard over a major corporation assures that there will be boats but no jobs. No economic revival, nada. It’s not like companies are relocating to act in droves and stamford has an alternative. Hopefully this is a negotiating position. This is the way NYC has worked for years. Companies get incentives when they move, period end of story.

    Absolutely any commentary to the contrary indicates lack of understanding the market dynamics in the real world. I mean a real world where a boatyard generates very little GDP. In a real world where people with tens of billions can relocate anywhere they want.

    If stamford does not agree to this they deserve every bit of blight that will absolutely follow.