Two members of the state Bond Commission voted against giving AQR Capital, the second largest hedge fund in Connecticut, $35 million in incentives to expand and create jobs, but the item received support from the other eight members.
State Comptroller Kevin Lembo said his opposition to the deal isn’t about whether it’s “right or wrong” but rather about the decisions the state needs to make at a time “when our economic recovery continues to be sluggish and we are all trying to navigate the present economic reality.”
Lembo also voted against giving Bridgewater Associates a $22 million economic incentive package back in May.
Sen. Michael McLachlan, R-Danbury, who was filling in for Sen. L. Scott Frantz, R-Greenwich, also voted against the measure, which passed 8-2.
Following the vote, Gov. Dannel P. Malloy defended what he described as an “investment.”
“We’re not giving money to anyone. We are investing in a company that has 529 jobs in the state and is willing to grow a substantial number of jobs in the state,” Malloy said.
Malloy said the jobs they will create have incomes that are “very substantial” and “will more than pay back the state.”
The governor said the $28 million loan and $7 million in grants the company is poised to receive was about protecting the investment AQR Capital currently has in the state and “preferring that they not fully explore other options.”
The state Bond Commission approved the first installment of the loan Tuesday.
The first $13 million will be forgiven if the company retains 797 jobs for two years. The company currently employs 680 people in Connecticut, according to the Department of Economic and Community Development.
The company will receive an additional $15 million forgivable loan with the goal of another 189 jobs within five years. The company would also be eligible for $7 million in incremental grants if it creates and retains an additional 140 jobs for a total of 1,126 jobs.
Lori Pelletier, president of the AFL-CIO, said the investment doesn’t create the same type of pipeline that investment in companies like Pratt & Whitney, Jackson Labs, or Sikorsky does.
“This is money that’s just going to go to one individual’s bottom line,” Pelletier, who is opposed the borrowing, said. “This is about a payoff to an individual to keep jobs here. It’s not about creating a pipeline of jobs along the way.”
She said Malloy misunderstood the results of last week’s election.
“He doesn’t understand that giving another wealthy hedge fund tens of millions of taxpayer dollars does nothing to improve lives of working and middle class residents,” Pelletier said. “Working people are angry. While the state continues to cut vital public services to the state’s most vulnerable and lay off critical service providers, the governor leads the way to line the pockets of hedge fund managers with scarce taxpayer dollars.”
The economic incentives will support the firm in making anticipated infrastructure investments in Greenwich, including leasehold improvements and office space expansion, as well as technology enhancements to the firm’s data center in Trumbull, according to the governor’s press release.
In addition to loan for AQR Capital, the state Bond Commission approved $465.7 million in general obligation bonds, which brings the state about $16 million shy of the $2.7 billion bonding cap Malloy set for borrowing back in March.
Since January the state has borrowed $2.68 billion.
There’s another Bond Commission meeting scheduled for December, but Malloy said it may be canceled.
“We are under our self-imposed cap by a tiny bit,” Malloy said.
Bonding is done on a calendar year basis.