GOP\’s Larry Cafero Questions UTC Deal; CBIA, AFL-CIO, Suppliers Support Plan

by Categorized: 2014 Election, Gov. Dannel Malloy, Hartford Date:

House Republican leader Larry Cafero questioned the state\’s proposed deal with Hartford-based United Technologies Corp. that is designed to help the company build a new headquarters for Pratt & Whitney in East Hartford.

Cafero compared the deal to one written by Gov. Dannel P. Malloy\’s administration for Maine-based Jackson Laboratory, which is under construction on the University of Connecticut\’s health center campus in Farmington. Republicans have criticized the Jackson Labs deal as essentially providing $1 million per job as the state is spending $291 million for a project in exchange for 300 jobs created by Jackson Labs. But Malloy says the Jackson deal will have major spillover effects and lead to a new era of well-paying jobs in bioscience.

Cafero made a rare appearance Monday at the finance committee, using his authority as a legislative leader to sit as a member on the General Assembly\’s tax-writing committee.

Cafero asked state and UTC officials if he was reading the bill correctly that \”if you never hire one extra person\’\’ that UTC could still receive 90 percent of the tax credits.

\”Yes, that is correct,\’\’ responded Peter Gutermann, the general counsel of UTC Propulsion and Aerospace Systems.

In addition, UTC could lay off 1,750 workers and still receive 35 percent of the tax credits, Cafero said.

\”Is that the best deal for us?\’\’ Cafero asked, saying that the deal on the credits is \”what\’s sticking in my craw.\’\’

While bills at the state Capitol traditionally do not mention any companies or individuals by name, Cafero said this bill is \”pretty much specifically for UTC\’\’ as it covers \”tax credits that they would never be able to use otherwise\’\’ under \”the structure we have in current law.\’\’

Gutermann noted that UTC could build \”in other locations,\’\’ but has decided to construct in its home state of Connecticut. He added that to receive 100 percent of the proposed tax credits, UTC must invest $500 million in Connecticut.

\”It\’s very hard to predict the future,\’\’ Gutermann said. \”Our business is not static. Lots of things can happen.\’\’

He noted that natural disasters and other problems can affect the aerospace business and jet engines that are made by Pratt & Whitney. Those types of events include the September 11, 2001 terrorist attacks and unexpected eruptions from a volcano in Iceland that caused an ash cloud that interrupted air traffic from Europe in 2010, he said.

\”United Technologies is a company that has thousands of employees.  Their business not only impacts the people they directly employ, but also thousands of suppliers and other companies,”  Malloy said in a statement.  “This town-by-town breakdown shows just how many people will be impacted by this is once-in-a-generation opportunity – one that ensures that we are keeping and creating good-paying jobs with good benefits in our state.  I urge the legislature to move quickly so that we can send a clear message that Connecticut will continue to lead the world in the aerospace industry.”

Malloy\’s budget director, Ben Barnes, told the finance and commerce committees Monday that the idea that UTC would spend millions of dollars on an engineering center and then cut jobs for engineers \”doesn\’t make any sense at all.\’\’

Bonnie Stewart, a vice president for the 10,000-member Connecticut Business and Industry Association, said it is a \”forward-looking bill\’\’ that allows UTC to redeploy its existing tax credits. Besides CBIA, the plan is supported by President Oz Griebel of the MetroHartford Alliance, the AFL-CIO, and the Middlesex County Chamber of Commerce, among others.

East Hartford\’s mayor, Marcia Leclerc, said that Pratt has 6,800 employees in East Hartford, and the town serves as the home for 87 direct suppliers to Pratt. She described the deal as a \”once-in-a-generation opportunity\’\’ to move forward.

“The new 425,000-square-foot Pratt & Whitney headquarters and the 100,000-square-feet of new and renovated research and engineering labs will bring in millions of dollars in revenue not only to East Hartford, but also to the region and state,\’\’ she said. \”The expansion will directly result in the creation of temporary and high paying jobs. With this reinvestment comes relief to our grand lists, and in turn, our taxpayers.

She added, \”I believe this announcement will jump-start development that has been long stalled after the construction of the stadium and Cabela’s.  Since last week alone, we have responded to several new inquires about development along our Main Street and Silver Lane corridor.”

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