Lamont admin. plans to consolidate innovation investor CTNext into state agency; $450K lined up for employee severance
CTNext Executive Director Onyeka Obiocha (center) with Dan OâKeefe (right), acting commissioner of the Department of Economic and Community Development.
The General Assembly created the quasi-public economic development agency CTNext in 2016 with the aim of investing in and boosting innovative startups capable of growing jobs and building economic vitality.
Now, the Lamont administration wants the much larger state Department of Economic and Community Development to absorb CTNext, a move that would come with a workforce reduction.
A request to fold the functions of CTNext into the DECD will go before state lawmakers in the coming session, said Daniel OâKeefe, who is the acting commissioner of the DECD while awaiting confirmation by lawmakers.
CTNext is currently a subsidiary of Connecticut Innovations, another quasi-public agency that serves as the stateâs venture capital investor.
CTNext was created as part of a larger effort to create âInnovation Placesâ around the state, particularly in cities.
Its mission was to accelerate startup growth by providing access to talent, space, industry expertise, services, skill development and capital to foster innovation and create jobs in Connecticut.
CTNext has traditionally received its funding through state bonding. The consolidation will shrink the organization and shift its budget into DECDâs operations.
In 2021, the state legislature authorized $64.2 million in general obligation bonds over five years to fund CTNextâs operations.
However, funding for CTNext has not found its way onto state Bond Commission agendas for three years, OâKeefe said. Thatâs a necessary step to turn that legislative authorization into actual cash.
âI think the work matters, and I think the DECD is the right place for the work to continue,â OâKeefe said. âCTNext was set up legislatively to be a subsidiary of Connecticut Innovations. The goal would be to work with the legislature to fold it into DECD and have it form the nucleus of what will be the Office of Innovation out of our agency.â
Barring that, OâKeefe said, heâs not certain how CTNextâs operations will be funded.
OâKeefe joined the Lamont administration last July, originally in a newly created chief innovation officer role within DECD.
He was named acting commissioner following the recent departure of former DECD Commissioner Alexandra Daum, who has taken a community development post at Yale University.
OâKeefe said a newly created Office of Innovation will continue the work of supporting startups, and function much like the Office of Manufacturing, which was created by the Lamont administration in 2019, and is currently led by former manufacturing executive Paul Lavoie.
Severance pay
CTNextâs board of directors on Jan. 23 approved setting aside $450,000 for staff severance packages.
OâKeefe said he imagines four or five of CTNextâs 11 full-time staff members will join DECD after the consolidation. Some staffers would not make the transition because their roles would be fulfilled by existing DECD employees, he said.
Itâs not clear how much money the state will save with the consolidation.
OâKeefe said CTNext was originally envisioned to foster the creation of physical spaces for collaboration and innovation. After the COVID-19 pandemic, however, the mission crept heavily toward supporting networks and programs.
The Lamont administration believes that work is important, OâKeefe said, but it doesnât want to borrow money to fund those efforts.
Attempts to reach a CTNext representative were unsuccessful. The organizationâs executive director is Onyeka Obiocha, who was named to the role in 2022. Obiocha is paid $196,905 in salary and wages, according to the State Comptrollerâs Open Payroll database.
CTNextâs board of directors, on Jan. 23, also voted in a new chairman, David Steuber, previously chief of staff to former Hartford Mayor Luke Bronin. Steuber spent more than a year as a senior program manager at Connecticut Innovations, before joining the Bronin administration in 2021.
Part of Steuberâs task is to help with the transition.
âSustained pathâ
It wasnât immediately clear how much state funding CTNext has received since its 2016 inception. Its programs included pitch events that awarded winning startups prize money.
For example, Monroe-based wearable medical device maker Elidah won $20,000 at CTNextâs first mentor network pitch event.
CTNext also reportedly awarded $54,000 to five startups during a 2022 Entrepreneur Innovation Awards event.
CTNext also supported the creation of a new venture fund with the intention of financing early-stage startups led by women and minorities.
OâKeefe stressed the aim is to continue CTNextâs contributions through a âsustainableâ funding mechanism.
âI look at this as an initiative we incubated outside of government,â OâKeefe said. âAnd now what we are looking to do is take the parts that worked, and worked well, and bring them into government and set them up on a sustained path.â
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