Hugh McQuaid Photo
Gov. Dannel P. Malloy and TicketNetwork CEO Don Vaccaro (Hugh McQuaid Photo)

(Updated 6:30 p.m) Gov. Dannel P. Malloy announced Thursday that TicketNetwork, the South Windsor based ticket exchange company, will be the second company under his “First Five” program to receive state assistance if it creates more than 200 jobs over the next two years.

The state is offering the company a $4.5 million, 10-year state loan to create between 200 and 600 jobs over the next 10 years. The loan is not as generous as the $15 million, no-interest loan the state offered to CIGNA Corp. last week for creation of 200 jobs.

The offer is also different in that it doesn’t come with the generous $30 million to $50 million tax credit incentives offered to the Bloomfield based insurance company.

In addition to the loan, the state is offering TicketNetwork, a five year $1.8 million loan from the Connecticut Development Authority for information technology, furniture and fixtures. In addition it will be eligible for a $250,000 software engineer training grant if it creates 200 jobs and a $450,000 grant if it creates 600 jobs.

The ticket company, which has had to fight for credibility in what some believe is an unscrupulous industry, started in 2002 and currently employs 319 full-time and 19 part-time employees. In May the online ticket exchange company moved its headquarters from Vernon to South Windsor after it purchased the building, which is visible off the westbound lanes of I-84. The facility was formally owned by Gerber Scientific. The announcement also marked the grand opening of the new headquarters and the arrival of the secondary ticket industry.

Malloy said the announcement was more evidence that Connecticut is open for business and the “First Five” program will help enable the state to shed the unfortunate distinction of being one of three states that did not grow jobs over the last 22 years.

He joked that TicketNetwork CEO Don Vaccaro should also promise to start new businesses in the area.

“You know there’s a certain value to identifying serial entrepreneurs who in their very fiber, their very bone marrow, have the ability to come up with great ideas, great concepts, bring to the market place, prove them and grow them,” he said.

For too long entrepreneurs have been drawn away to other states, he said and Vaccaro’s expressed desire to keep his business in Connecticut appealed to the governor.

Vaccaro said other states have made efforts to get him to move his business. Virginia and North Carolina made offers with phenomenal incentive packages, he said. But he expressed a loyalty to the company’s home state. Most of his employees grew up in Connecticut, many of them east of the Connecticut River, he said.

“We’ve built a technology company where folks said that you couldn’t build one. They said you had to be in Silicon Valley or you had to be in Boston in Silicon Alley. No you can do it in Connecticut and this partnership that we’re talking about is a great way that really shows companies outside that Connecticut is open for business,” he said.

Malloy’s outreach to the company also factored into their decision not to leave, Vaccaro said.

Hugh McQuaid Photo
Department of Economic and Community Development Commissioner Catherine Smith (Hugh McQuaid Photo)

Department of Economic and Community Development Commissioner Catherine Smith said she wanted taxpayers to understand the investments made through the “First Five” program are important to the state.

“I’m going to speak to the residents of our state for a moment because I want you to know that these are very good investments of our tax dollars to help companies grow in this state,” she said.

The offering the state makes to each company is run through a complex model to ensure that the deal is revenue positive for the state, she said.

Speaking to reporters after the ceremony Smith said that she would like to see the “First Five” program expanded to allow for more companies.

But more corporate welfare at a time when the state continues to lose jobs isn’t something that appeals to everyone.

Sen. Minority Leader John McKinney, R-Fairfield, issued a statement criticizing the announcement.

“On the same day Gov. Malloy promotes his ‘First Five’ initiative, other companies are announcing they are laying off hundreds of Connecticut workers,” he said. “The governor would be better off if he just made it easier for companies to do business in Connecticut. Stop raising taxes on businesses and stop burdening them with additional mandates and regulations.”

Everyone who spoke at the ceremony Thursday afternoon agreed the company’s decision to grow in South Windsor is good for both the town and the state. TicketNetwork is credited with being one of the fastest growing companies in Connecticut.

But the company has also been at the center of some controversy in recent years.

In December a former Ticket Network employee filed suit in Hartford Superior Court, alleging that Vaccaro had repeatedly sexually harassed her between July and December of 2009. According to the lawsuit, which is still pending, the employee said she was fired after she complained about her treatment while working at the company.

Smith said she was unaware of the lawsuit. Her department looks at a lot of information about companies when they make inquiries and applications into the program, she said. But that process did not turn up the suit. She wouldn’t speculate on whether knowledge of the claim would have changed the decision to invest in TicketNetwork.

“Hypothetical, hypothetical. I’d rather not give an answer because I don’t know all the facts,” she said.

The governor’s office said he too was unaware of it, but said it’s irrelevant to today’s announcement.

“That’s why we have a court system,” said Colleen Flanagan, a spokeswoman for Malloy. “It has nothing to do with the economic development news today.”

Earlier this year, TicketNetwork also filed suit against David Fay, the CEO of the Horace Bushnell Memorial Hall Corp., claiming comments he made during General Law Committee’s public hearing, had defamed the company name.

That move inadvertently helped kill a bill that the company supported. Lawmakers said the lawsuit had a “chilling effect” and helped make their decision to hold the bill, which would have set new rules regarding the buying and reselling of entertainment tickets.

The company has also had issues with its former host, the town of Vernon.  In May, Vaccaro told the Hartford Courant that he believed the relationship soured when the town squashed the company’s plans to build an outdoor concert venue. Neighbors complained the venue would create too much noise.

“Ever since then, they’ve been less reasonable about working toward keeping us in Vernon,” Vaccaro said in a Courant article.

But the company hasn’t only been on the defensive. It’s also been aggressive in suing the Better Business Bureau in 2010 for its rating system, which it alleged gave better ratings to fee-paying members, and it won a 2009 fraud lawsuit filed by New Jersey’s attorney general.