Martin Seifert's East Granby company Nufern is nearing completion of a multimillion-dollar expansion that will be financed in part by tax incentives offered through the state's newly created Bradley Development Zone.
East Granby technology manufacturer Nufern has been a heavily recruited company in recent years.
Martin Seifert, the president of Nufern, which produces optical fibers and fiber lasers, said economic development officials from at least four states and Canada have aggressively tried to lure the firm away from Connecticut with lucrative tax incentive deals.
But, at least for now, it appears Connecticut has trumped those offers.
Nufern has become the first company in the state to receive preapproval for the various tax incentives being offered to companies that expand in the newly created Bradley Development Zone near Bradley Airport.
Nufern, which is nearing the completion of a 30,000-square-foot addition to its Airport Park Road facility in East Granby, quietly received preapproval for the program from the state last fall, and will finalize its deal once the project is completed, possibly in the next few weeks.
Nufern's multimillion-dollar expansion will trigger the hiring of about 40 new employees, including scientists, engineers and assembly line workers, as the company consolidates its operations in the Nutmeg State and prepares for future growth. A location in Maryland was recently closed, Seifert said.
Without the tax incentives, which will include property tax exemptions and a corporate business tax credit, Seifert said he's not sure if his company would have stayed in Connecticut.
"Without the development zone, Connecticut would have difficulty attracting industrial development," Seifert said. "The incentive packages from other states were very lucrative."
Nufern's expansion is a win for Connecticut, but more importantly, a signal that the highly touted Bradley Airport Development Zone is finally gaining some traction.
A second company, Suffield-based Metal Finish Equipment & Supply Co., has recently applied to the program. It is looking for development zone tax incentives to help finance a 12,500-square-foot expansion of its facility on Kenny Roberts Memorial Drive, sources say.
Metal Finish, which produces industrial machines for steel product manufacturers, plans to more than double its space to make room for additional equipment, according to Patrick McMahon, the economic development director in Suffield. The company also plans to add up to seven new jobs over the next two years.
Richard Rush, a Metal Finish executive, could not be reached for comment.
The Bradley Development Zone, originally established by lawmakers in 2010, didn't actually go into effect until last October. It encompasses four towns surrounding Bradley International Airport, including East Granby, Suffield, Windsor Locks and Windsor.
Many economic development experts say the region offers one of the strongest areas for economic development in Connecticut — anchored by one of only two major airports in New England.
Oversight over the program has already switched hands from the state Department of Economic and Community Development to the newly created quasi-public Connecticut Airport Authority (CAA).
Karen Jarmoc, a CAA board member, said the airport authority has been working diligently over the past few months creating the program's policies and procedures, and is now prepared to go full steam ahead in marketing it.
She said the airport's quasi-public role will mean it can process applications more quickly, which should create a more efficient program. Businesses looking to expand in Connecticut have always raised concerns about the slow regulatory process in the state, so the quicker decisions can be made the better, she said.
"We want this to be very successful," Jarmoc said.
The zone allows new or renovated buildings to be eligible for property tax exemptions equal to 80 percent of the assessed value of the improvements.
The exemption is available on the assessed value of machinery and equipment that is part of the development or renovation of a building. Businesses will also be eligible for a 10-year corporate business tax credit beginning in 2013.
Undoubtedly, the Bradley region already serves as an economic engine for Connecticut, contributing billions of dollars in economic activity and playing home to some large companies including Hamilton Sundstrand and Alstom Power.
But the potential for further growth is significant.
According to a recent study, the Bradley Airport Development zone has 11.8 million square feet of commercial and industrial use, but it can accommodate an additional 16.6 million square feet of commercial development. Also, existing properties within the zone can accommodate 3.6 million square feet of additional commercial or industrial uses.
McMahon, the economic development director in Suffield, said he has begun to market the development zone more aggressively now that it has a strong footing.
He said the towns surrounding Bradley Airport have a good mix of buildable land and existing infrastructure that would be attractive to various types of companies including manufacturers, warehouse distributors, and research and development firms.
The area's proximity to the airport is always a selling point along with its immediate access to Interstates 91 and 84, and proximity to downtown Hartford and Springfield.
He said the zone will likely create new jobs, attract new capital and increase tax revenue in the long-run, even though companies are receiving property tax exemptions for a five-year period.
The state, however, will reimburse towns up to 50 percent of property tax revenues that are lost as a result of the tax breaks, McMahon said.
"After five years, if we brought new development to town we are all going to benefit," McMahon said.
Seifert, the Nufern CEO, said Connecticut is a difficult place to do business, so having incentives in place for companies looking to grow or move here is important.
Nufern is investing millions of dollars with its recent expansion, which is being fueled by a contract the company won in 2009 to assist in a billion dollar upgrade of the Navy's fleet of Trident-bearing submarines.
Nufern's technology is replacing heavy, mechanical gyroscopes used by the submarines with lighter ones built around optical fibers.
The one concern Seifert said he does have with the development zone tax incentives is that final approval for them isn't granted until after a project is completed.
"It's a little awkward," Seifert said. "In other states, incentives are locked in before you have to turn the first shovel. That is something the state might want to look at."