|Business News Links|
Business Moves with Building Sale
|Twin Facades of Corporate Assistance|
|Craft Beer Keeps Brewing in CT|
|Builders Say Too Many Regs|
|Pro Business Efforts in Legisalture|
As the end of his record-setting tenure draws closer, New Haven Mayor John DeStefano Jr. is still looking ahead — not back
On January 1, 2014, John DeStefano Jr. will depart his City Hall office for the final time, concluding his two-decade tenure as the Elm City’s longest-serving chief executive. The 57-year-old Democrat is the son of a New Haven police officer who attended UConn (where he met his future wife, Kathy), where he earned a master’s in public administration. He later worked as the city’s chief administrative officer under Mayor Biagio DiLieto. His first run for mayor, in 1989, was unsuccessful (he lost a primary to then State Sen. John C. Daniels), but returned four years later to win the top prize. He’s been there ever since.
Do you view your final ten months in City Hall as a race to the finish or business as usual?
We exist in an economic and political marketplace; I don’t think you can force things to happen. You can encourage things and you can set directions. I don’t think this year will be any different than past years. We’ll break ground in June on 100 College Street [future home of Alexion Pharmaceuticals]. We’ll probably have a deal done for housing on Winchester avenue as part of Science Park. School reform will be continuing. We have a teacher’s contract that will have to be negotiated by year end. Those things are organic — they are occurring, they’re going to happen. Do I think that some of the things will be left unresolved? Sure they will be.
On education reform, you put together a different approach with the unions and the district. Is that relationship is working the way you had hoped?
We articulated three big goals. The first closing the achievement gap to the state average. We’re not going to reach it in five years, but we will probably reach it in seven. Second, cutting the dropout rate in half. We had great numbers in 2012: The dropout rate went [down] to 20 percent using the most conservative calculation you can use. We can conceivably reach our goal in less than five years. The third issue was being prepared for and having resources for students to go to college. The most encouraging thing I saw so far was in our Promise cohort [a partnership between the city and Yale University to help pay for college for city high-school students with a 3.0 GPA]. [Promise] kids going from first year of college to second year, 86 percent [remained in school] from freshman to sophomore [years]. The average at Southern [Connecticut State University] is 77 percent. The average of New Haven students is in the 60s. Show me a district anywhere in America that is as broadly collaborative, comprehensive in obtaining results as New Haven. There isn’t one.
Aren’t some of those gains part of the ongoing effort of the school district? They weren’t just doing nothing.
No, they weren’t doing nothing but we weren’t getting these kind of results. Let’s take Katherine Brennan [School, which has students in grades three to eight]. It was a Tier III [“failing”] school. We used the union contract to change virtually all the adults in the building and we implemented a new focus. It was moved up to a Tier II school this year and one of the reasons was it had the biggest increase jump in the CMT [Connecticut Mastery Tests] scores last year of any school in the public school district. As a tactic this tiering of schools, the teacher’s contract and the school administrators contract affords us the ability to drive the results we want to see.
Is there something unique about New Haven that allowed this approach to be taken here, or can it work in other parts of Connecticut?
The achievement gap is driven by 15 communities in the state. I don’t think you see these results in any other district in the state. I think a key factor was the climate that some of the community created about aspirations for doing better. The charter school movement in New Haven helped to contribute to this. And frankly, in a mayoral-controlled district [New Haven has the only appointed board of education in Connecticut; all the others are elected] we were able to say, ‘We’re going to do this,’ and organize ourselves and get it done. So I think governance was also part of this as well.
Charter reform is something that will always be raised in election years. Are there any charter reforms that you look forward to seeing in New Haven to fill the city’s future needs? Does it need a city council or an elected school board for example?
I think an elected school board would be a huge mistake. It is a change without purpose and a solution in search of a problem. We had the same governance structure under my predecessors, and I don’t think the outcomes were particularly strong. It’s not just an issue of structure, but intent of purpose and persistence. You can say look we did a lot of good things in the school district between 1994 and 2008 — that’s 14 years, a long time, Clearly in 2008 we said we have to change, and frankly the opportunities in 2008 didn’t exist in 1994.
Some people say that the leader of the individual school is the most essential ingredient. Do you agree with that?
I think the principal is the most important person in the school. Biggest multiplier, the biggest change agent, the biggest thing is the principal. That’s why with Achievement First we formed a Leadership Academy of skilled leaders. Sometimes it happens organically, they emerge; but like anything else in life you have to train for it, be nurtured for it and grow into it.
As mayor you don’t have the luxury of concentrating on only one thing. But is there one overriding priority you would point to that would be key to any future city leader’s success?
People in the community need to see their self interest in one another. The mayor as someone who represents the entire city needs to be able to engage people in all parts of the community in terms of where they live, visitors, employees or residents and in terms of where they come from to create a shared sense of purpose in the city. If folks don’t see their self interest in one another, if folks see, ‘Your addition comes at the expense of my subtraction; your bread comes off of my table,’ we devolve into factions that fight one and another and you don’t get anything done. [For example] it makes sense to acknowledge there is a large undocumented [immigrant] community here. They work in our businesses, they go to our churches, they contribute to our community and we need to stand up for them. It means if East Rock is getting hammered in property reevaluation disproportionate to the rest of the city, we need to be concerned about it and how to cushion that and do what is reasonable and appropriate. It means that if you have a world-class university and yes, their growth [in terms of real estate acquisition] comes at the expense of something that is moving off the grand list, we still ought to support that even though a lot of the jobs [at Yale] go to people from out of town. If you’re expanding the hospital and there are issues of what are the organizing rights of the people who work there, you have to balance that. The thing to get right is to create an environment where people see that the whole is more than the sum of the parts.
So have you accomplished that?
Sometimes have, and sometimes I haven’t.
So what in New Haven stands in the way of that understanding? Is part of it racial issues?
Human nature. We fear change. We’re stressed, we’re working hard and it has always been that way. That said, I think this city more than any other has this culture of expanding citizenship, expanding participation. You can draw a line from school reform and immigration to what happened here in the 1960s, to Griswold v. Connecticut [in which Supreme Court ruled that the Constitution protected a "right to marital privacy") back to the Amistad trial. This has been a city that has constantly promoted a sense of common good, supporting those at risk, bringing everyone along. I think our policies don’t always match up to that because it is argument of an investment in people rather than places.
New Haven’s identity card policy for undocumented immigrants generated a lot controversy when it was introduced. How has that changed?
I was at this [March 4] meeting at Wilbur Cross [where] 2,000 people came out for a state General Assembly transportation committee [hearing] on whether the state should provide drivers’ licenses to undocumented people in Connecticut. It was very calm, very nice, very orderly, I contrast that with seven years ago [when] we went though a crucible trying to issue ID cards. Much of what is happening in immigration and gender equity now was tested in places like New Haven years earlier. It was extraordinary the other night. People weren’t afraid to come out, no one was demagoguing everyone. It is the same with school reform. By showing we can do this without going to war, you don’t create this residue of hardened feelings. Again, let people see their interest in one another.
It’s a given that cities have been reinvigorated by immigration. Do you think the current immigrant population will stay in New Haven, or will they leave for the suburbs as they climb the economic ladder?
Absolutely [they will leave] — and they should. Cities are not the kinds of places to be middle class; cities are places you become middle class. It is the place you come to go to school, whether it’s Gateway, Southern, Albertus or Yale. You come here to develop yourself and you move on. It is a gateway. You first come to America to places like this, you display great work ethic and focus and you get pride in your kids going to school and you move on. That’s what this place does. It’s alchemy: We make something out of people’s dreams. It happens at two ends of the spectrum. We always focus on the folks that were the point of the discussion at Wilbur Cross, but there are 4,000 people who are not [U.S.] citizens who either go to school, instruct or are faculty at Yale. And we have thousand of other folks both documented and undocumented in the service industries. My grandfather, Bartolomeo DeStefano, came here before World War I. He was a stone mason. Why did he come to New Haven? He built these residential colleges [at Yale College]. I have 31 first cousins. How many are left in New Haven? One — and he’s sitting in front of you. That’s perfect. We [DeStefano family members] are all over the country, and we’re contributing and it continues. We should hope it continues and see that this is the role of places like New Haven. Places that attract talent, create businesses, places where people get education.
In 2138 New Haven will turn 400. How much different will New Haven be than today? It doesn’t seem that much different from when we celebrated New Haven 350 in 1988.
It will be hugely different— and entirely the same. I was on the New Haven 350 committee. There is a little monument when they renovated the Green in 1985. Alfred Van Sinderen was head of the phone company [now-defunct Southern New England Telecommunications Corp.]. Look at the list of companies [then and now]. The economy of New Haven has reconstituted itself in many ways, yet Sargent/Assa Abloy is still there, the port is still there. Clearly the explosion in the medical school is a huge different dynamic. We have the fourth-largest hospital in America measured by bed counts. I argue we have a much larger immigrant population than we had [in 1988] and yet 25 years ago I was going to Sydney the tailor — Sydney Glucksman at Chapel and Norton. I still do. I was going down to Consiglio’s and Sally’s to get my pizza 25 years ago, and I still do that.
Are you concerned that state government’s budget woes will force new tax increases in New Haven?
Among the states and even among the Northeast states, [Connecticut is] lagging in job recovery from the 2008 recession. New Haven is one of the few communities in the state that by the end of 2011 recovered all the jobs lost. I am most concerned that the state is not growing, and the illness is presenting itself in state budgets. The state made a bet two years ago — when it raised taxes and signed the deal with the unions and launched their economic development strategies — that there would be recovery. But that hasn’t happened. We’re lagging Massachusetts, New York and New Jersey.
A lot of people elsewhere in Connecticut think New Haven gets a free pass because of Yale, but what is the state doing wrong in managing its finances? It didn’t start with Gov. Malloy.
Yes, we have Yale. We also have 13 percent of the state’s affordable-housing units. We deal with everyone in the state’s mental illness, substance-abuse issues, a family member that has problem — and we’re supplying most of the jobs for the region. We’re nobody’s ward; no one should feel sorry for us. We’re a great, strong, vibrant city.
Okay. But what would be your piece of wisdom for the state, then?
I think we should make it easier for businesses, for residents — like the tax structure, for example. Make it simpler and flatter and more transparent and less able [for taxpayers] to game the system. I am a great believer in what was explored under the Rowland administration but never implemented: the cluster strategy [of economic development], focusing on core competencies for growth. I would not be afraid to borrow to finance deficits if it could be demonstrated to support workforce and education systems and key parts of the safety net. I’m a great believer in focusing development around transportation. We’re about to conceivably lose Tweed Airport because of federal policy. Measure what it would take to make a key transportation infrastructure like that versus a New Haven-to-Springfield railroad. I can’t compare the two. I see Tweed as dramatically more important to us.
The subject of railroads is hot now in Connecticut — they’re practically a fetish for pundits, planners and public radio.
Let’s invest in New Haven-to-New York [Metro North line] then, because there is a lot more at the end of that line.
New Haven hasn’t seen many situations where individual companies have been given big loans or grants for development. Where do you stand on this one-off type of economic development?
It ought to be a tool in the tool kit. We did get a lot of money to get Alexion to grow and stay in Connecticut; they did have a choice of a Rhode Island campus. [Alexion founder and CEO] Lenny Bell lives in Woodbridge. Maybe he wouldn’t have [moved to Rhode Island]; maybe he would have. In context, isn’t life sciences in New Haven a core competency? That investment pales in comparison with what is invested in the [Yale] med school. Would I subsidize a service company — let’s say a large sporting-goods retail?
Connecticut did one in East Hartford and will do one in Bridgeport.
Did Ikea get a tax deal or a land subsidy? Do. Did we subsidize Gateway
Community College? Yes; that is worthy of a public subsidy. Did we partially subsidize 360 State Street? Yes, we wrote down the cost of the land [which the city sold to developer Brice Becker for $1]. And it made sense in the context of really wanting to build a residential downtown, and seeing the value of connecting the central business district to Wooster Square. You want to have that tool [of public subsidies], but you want to surgically apply it.
It’s pretty hard to see and understand some of these deals.
I think we should do them in a more transparent fashion. We make a ton of expenditures [in government] that we don’t begin to quantify. We ought to be able to know what they are and report on them.
You’ve been critical of Malloy’s current proposal to eliminate the automobile tax. Isn’t subtracting a tax going to be popular?
The car tax is a nasty tax. It is not equitable, it’s not the easiest tax to collect, but the state proposes a repeal. But there are a bunch of people who get a tax credit under state income tax, because that is the only property tax they pay and they’re not going to get that anymore. Car tax is deductible on your federal income tax if you itemize and that’s going to subtract $120 million of federal money from the state’s economy. These aren’t arguments not to do it, but they should be considerations.
Not who but what do you want to see in the next mayor?
I said to one of [potential successor candidates], ‘Help people see their self interest in one another.’ Also understanding that sometimes you have to lead. Being willing to go out onto the corner of Church and Elm and say what you guys are doing to this bank [the sale of the former NewAlliance to First Niagara Bank in 2011] is wrong. It’s morally wrong and it’s a huge disaster for the business community. So you have to be willing to do two things: Bring people together, and sometimes you have to be willing to stand up.
NEW HAVEN — The city of New Haven is seeking proposals from qualified developers interested in purchasing 10 Wall Street, a 1.07 acre surface parking lot located in downtown New Haven in the northeastern most of the city’s original nine squares. The area is filled with restaurants, shops, offices, apartments, government buildings and other educational institution.
The city is particularly interested in seeing this site developed for commercial, residential or mixed use in a way that will augment the vibrancy and vitality of downtown New Haven.
To learn more about the site, visit the city's Bureau of Purchases website at cityofnewhaven.com/PurchasingBureau/.
Spending hikes and business-tax ‘extensions’ draw criticism
HARTFORD — The philosophical and practical gulf between Connecticut business and the state’s Democrat-dominated political leadership continues to grow.
On February 6 Gov. Dannel P. Malloy proposed a $43.8 billion state budget for the next two fiscal years. The document increases state spending by more than nine percent and extends three significant business taxes that were scheduled to sunset on June 30.
Over the coming months the governor’s office and members of the legislative branch will negotiate the content of the final budget, with members of the Democratic super-majority in both chambers likely to push for even higher spending on entitlements and social programs.
On the economic-development front, the most promising elements of the Malloy budget including augmenting STEM (Science, Technology, Engineering & Math) education at the University of Connecticut, the state’s bioscience industry and elementary education. In addition, Malloy’s commitment to state government’s successful Small Business Express program, which has helped some 500 companies, drew praise from the small-business sector.
(Malloy’s gimmicky proposal to exempt motor vehicles valued at less than $28,000 from property taxes drew withering criticism from municipal officials who are the principal beneficiaries of that income source.)
But overall the corporate community expressed alarm at state government’s lack of seriousness about cutting spending.
Connecticut’s best economic development tool, said John Rathgeber, president and CEO of the Connecticut Business & Industry Association (CBIA), the state’s largest business group, is “making the changes needed to control spending, demonstrate fiscal discipline and make government more efficient.”
Rathgeber’s group criticized Malloy proposals to increase borrowing to accommodate his initiatives as well as modifying the state’s constitutional spending cap, increasing the governor’s rescission authority from five percent of the overall budget to ten percent. Also, CBIA accused the Malloy budget of “kicking the can down the road” in lieu of addressing the state’s groaning long-term liabilities, especially state employee retirement benefits and health-care services.
Earlier Malloy had insisted his budget would include no new taxes. But in extending the corporation tax surcharge, electricity-generation tax (which would likely be passed along to ratepayers to the tune of more than $100 million) and insurance premium tax credit limit, all due to expire this summer, the governor delivered a $308 million tax increase on business in all but name.
Malloy’s office insisted the governor had not technically violated his no-tax-increase pledge. But the beleaguered Republican minority in the General Assembly said this was little more than sophistry. “It’s a tax increase,” said State Sen. John McKinney (R-28) of Fairfield.
MILFORD — The U.S. Department of Labor's Occupational Safety & Health Administration has cited Amilicar Samper Perez, d/b/a Roof Systems of Connecticut, for alleged violations of workplace-safety standards while its workers installed a roof on Page Street in Milford. The contractor faces a total of $44,880 in proposed fines, chiefly for fall hazards identified during an inspection by OSHA's Bridgeport office that began in November 2012.
OSHA found workers exposed to falls of 11 feet while they installed roofing without fall protection. The workers had not been trained to recognize fall hazards and workers using a pneumatic nail gun were not wearing eye protection. OSHA had cited Perez in 2008 and 2009 for similar hazards at work sites in Milford and Hamden.
As a result of these recurring hazards, OSHA issued the employer three repeat citations with $37,400 in fines. Perez was also issued three serious citations with $7,480 in fines for ladder hazards and not training workers to recognize ladder hazards.
The employer has 15 business days from receipt of its citations and proposed penalties to comply, meet informally with OSHA's area director or contest the findings before the independent OSHA review commission.
State defense contractors brace for ‘sequestration’
Once unthinkable, dramatic cuts to the Pentagon's budget that would hurt Connecticut's defense industry are now looking more and more real.
The so-called sequestration could cost the state as many as 42,000 jobs, one study estimates.
Congress has a deadline of March 1 to find billions of dollars in cuts to the federal budget to avoid automatic, across-the-board reductions, half of them to the Pentagon's budget.
The looming cutbacks, on top of reductions to the Pentagon's 2013 budget, have caused defense contractors to retrench, stop hiring or even laying off workers and postponing expansion plans.
"There is a lot of frustration and uncertainty in the market," said Pratt & Whitney spokesman Ray Hernandez.
To plan for a sequester, the Navy plans to postpone $300 million in emergency repairs to the USS Miami, a Groton-based attack submarine that was damaged by suspected arson last year.
The Army plans to cut its helicopter training by 50 percent, so pilots wouldn't be able to fly enough to meet proficiency requirements. Cutbacks at flight schools would also leave the Army short about 500 aircrews for its fleet of helicopters. That could eventually affect Sikorsky's helicopter contracts with the Army.
Paul Jackson, spokesman for Sikorsky, said the company has created "hypothetical models" to cope with a new era of austerity. But he said the helicopter manufacturer is at the mercy of Congress and the Pentagon. "We need to get some real direction," he said.
Sequestration was approved in a 2011 deal to raise the national debt limit. It was designed to be so onerous that lawmakers would rush to replace it with targeted cuts to the federal budget. But that hasn't happened.
Robert Ross, executive director of Connecticut's Office of Military Affairs, said that with sequestration looming, work on certain projects has already stopped at the Naval Submarine Base New London, including the demolition of old buildings and other plans to modernize the plant.
"Things that we would like to get done, can't get done," Ross said.
EAST HARTFORD — A poll of 500 likely state voters by the conservative Yankee Institute placed Gov. Dannel P. Malloy’s approval rating at 54 percent — the highest measured yet. However, the bad news is that voters don’t like his proposed biennial budget (see related story), and only 42 percent of voters polled would vote to re-elect him next year.
The governor’s approval rating was up three points from a year ago, when it was 51 percent, which itself represented a significant improvement from June 2011, in the wake of the tax increases in Malloy’s first budget, when his overall rating was just 42 percent.
Paradoxically, however, just 42 percent of voters say they would vote re-elect Malloy next year, with 39 percent saying they would probably vote for an unnamed Republican opponent. Nineteen percent say they are undecided. The governor’s re-elect rating has dropped five points from a year ago, when it was 47 percent.
Furthermore, voters are deeply skeptical of the governor’s budget proposal. Given basic information about the budget, 54 percent of voter respondents described it as spending too much. Voters oppose its reliance on borrowing by a three-to-one margin, 68-21 percent. They oppose exempting cars from the property tax, 52-34 percent, when informed about the proposal’s impact on municipalities.
A narrow plurality of voters support the budget’s extension of tax increases on power plants, corporations, and insurance premiums, but only by a 44-39-percent margin.
By a 2:1 margin (56-27 percent), voters say Malloy’s First Five/Next Five initiative is a poor use of taxpayer money.
The partisan breakdown of the 500 respondents was 40 percent Democrat, 28 percent Republican and 32 percent independent.
New Haven Magazine