Connecticut's State Bond Commission voted 8-2 on Tuesday to provide a controversial $35 million package to Greenwich hedge fund AQR Capital Management LLC.
The funding consists of $28 million in loans and a $7 million grant-in-aid under Gov. Dannel Malloy's First Five Program, which assists large-scale business projects. It will backstop the first phase of AQR's 10-year, $72 million expansion plan.
Malloy defended the move, which comes amid the state's dire budget struggles.
"We're not giving money to anyone. We are investing in a company," he said. "This is an investment not unlike the investments that we made a number of times on the agenda for manufacturing and for other business development."
Earlier this year, the commission provided a $22 million package to the world's largest hedge fund, Westport-based Bridgewater Associates. AQR has roughly $172 billion in assets under management. Founded in 1998, AQR moved to Connecticut from New York in 2004. The firm intends to retain 580 jobs and create up to 217 new ones within two years, according to Malloy.
The shadow of General Electric's departure for Boston and Bridgewater's threatened move to Westchester County, N.Y., hovers over Connecticut. In addition, Hartford-based insurance behemoths Aetna Inc. and Travelers Cos. also spoke out against the state's business climate during the last two budget sessions.
Connecticut would forgive $13 million if the company retains 797 jobs for two years after it creates first-phase new jobs. Connecticut would forgive a further $15 million should it add another 189 jobs within five years and retain the total jobs for two years thereafter.
The interest rate for the loan is 2% for 10 years.
According to Malloy, 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.
State Comptroller and commission member Kevin Lembo voted against the deal.
"For me, it's not necessarily 'is this the right deal or the wrong deal?' but rather, I think, a recognition that we are at a place where it's not this and that," he said. "We don't get to do it all and we're going to have to make some hard decisions. So under the banner or this or that, I'm going to have to vote no on this.' "
State Sen. Michael McLachlan, R-Danbury, also voted no.
"Let me ask you," Malloy said during a feisty exchange with reporters at the state capitol in Hartford. "If the company was to pick up and move, would that be a good thing? Or if any company picks up and moves, doesn't that get wide coverage?"
The bond panel also signed off on $140 million the legislature approved in September to keep defense contractor and Lockheed Martin unit Sikorsky Aircraft in the state, and $75 million to renovate the state office building and build a parking garage in Hartford. In addition, it cleared $30 million for microgrid projects intended for weather resilience.