A New York financial services firm will open an office in Danbury, and if that location employs 100 people three years from now, a subsidized $3 million loan from the state will be converted into a grant.
Gov. Dannel P. Malloy announced the economic incentives package at a press conference in Danbury on Wednesday.
James Frischling, president and cofounder of NewOak, said the average wage for the jobs will be more than $100,000.
Catherine Smith, commissioner of the state Department of Economic and Community Development, said at the press conference: “We put a great deal of emphasis on the financial services and insurance sector in our economic development strategy — and for good reason, as it is an important economic driver for our state. Successfully attracting companies like NewOak [is] further strengthening our competitive position and global reputation in the industry.”
NewOak was founded in 2008 to capitalize on the financial crisis and the need to bring transparency to financial instruments that had been so highly engineered that investors belatedly realized they didn’t know the true risk.
This is not a relocation of operations from New York but an expansion of the business. The workers will do forensic due diligence on residential mortgages, either for institutional investors who want to buy mortgages from lenders, or for banks embroiled in disputes with Fannie Mae or other investors who are insisting that the banks accept loans back on the books that have gone bad. Fannie Mae says those loans’ underwriting standards were not as promised; NewOak is hired to document what those underwriting standards were.
“A lot of my guys joke we don’t allow them to live past 2008,” said Chad Burhance, who will head the Danbury division.
Burhance said Danbury’s location allows him to hire workers from as far away as Hartford and Shelton, and, in New York state, Yonkers, Westchester or even Middletown. In addition, he said he expects to recruit mortgage experts to relocate, perhaps from California or Arizona. It should be easy to find the talent he needs, he said.
The Danbury area has the lowest unemployment of any region in the state.
NewOak is spending $13 million to improve the 10,000-square-foot building it is renting, buy furniture and computers, and hire ahead of contract payments. The company hopes to have close to 50 people in Danbury within a year of opening, and 100 by the end of three years.
The State Bond Commission will have to approve the $3 million loan, because the state will borrow the money it gives to NewOak.