When MassMutual moves up the road from Enfield to Springfield, adding 2,200 jobs in Massachusetts over the next four years, and adding a new $240 tower to the Boston cityscape that will employ about 500, the company will see $46 million in tax breaks that has some questioning the Bay State’s return on investment.
In the lead business story in Sunday’s Boston Globe, the newspaper described the package provided to MassMutual, announced earlier this month, as “huge for a state that has historically been tight-fisted with corporate subsidies.” It is “twice as generous as the next largest award ever handed out” under the specific state program utilized, and the largest ever state subsidy in Western Massachusetts, the Globe reported.
By comparison, the report indicated that the $120 million that helped lure GE from Fairfield to Boston was an investment in real estate to seal the deal, which should remain with the state should GE decide at some future date to depart. MassMutual, however, need only create 2,000 jobs in Massachusetts during the next few years to receive the tax break.
The move comes just under four years after MassMutual stressed its commitment to Connecticut, receiving a 10-year, $13 million tax abatement from the State of Connecticut for renovations to their Enfield location, which employed between just over 1,500 people. (On the day of the announcement in 2014, the company indicated 1,600; the Governor’s Office indicated 1,900 employees.)
For Enfield, the news isn’t great, but many of the people who live in town won’t have to relocate their families when their business address crosses the state line.
“Those people will still be part of the local economy,” Enfield town Manager Bryan Chodlowski told the Globe, adding that “maybe this facility represents a corporate headquarters for a new user.”
MassMutual has been the town’s largest taxpayer, and the largest major corporate presence since the departure a few years ago of Hallmark, which moved operations to the mid-west. Hallmark, which was the fifth largest taxpayer, decided to close its 1-million-square-foot Enfield distribution center in 2015 and eliminate 570 jobs, ending 63 years of operation in the town. The Kansas City-based company said in announcing the closure that about 40 percent of Hallmark products had shipped out of Enfield. Hallmark’s departure announcement came one year –almost to the day – after the MassMutual tax break and renovation announcement.
In 2014, MassMutual led the announcement of its Connecticut facility renovations by “Underscoring its commitment to the insurance and financial services sector in Connecticut,” as it “unveiled the more than $38 million renovation of its Bright Meadow campus, the primary location for the company’s retirement services and workplace insurance businesses.:”
Company Chairman, President and CEO, Roger Crandall said: “We now have a world-class facility to accommodate the excellent growth potential of this business, and we look forward to delivering an outstanding service experience for our customers here for many years to come.”
Connecticut Governor Dan Malloy added: “Most importantly, MassMutual’s long-term commitment to expand in Connecticut keeps 1,900 good paying jobs with good benefits here and will have a lasting impact on the state and local economies for years to come.”
The tax abatement was to come through the Urban and Industrial Sites Reinvestment Tax Credit (URA) program. Administered by the Department of Economic and Community Development (DECD), the tax credit program allows for a dollar-for-dollar corporate tax credit for an investment up to a maximum of $100 million in a project, according to an announcement by the Governor’s Office in 2014.
MassMutual, founded in Springfield in 1851, plans to bring in employees now located not only in Enfield, but in North Carolina, New Jersey, Pennsylvania and Tennessee. The company anticipate
s a workforce of 4,500 in Springfield, somewhat larger than the 3,150 currently at company offices in the city, the Globe reported. The company expects to retain offices in Amherst, Mass., New York City and Phoenix, AZ, which provide access to specific talent pools and business solutions, a company news release pointed out.
Company facilities in Springfield and Enfield were each about 60 percent occupied, a company spokesman indicated, explaining the logic behind the move. In total, MassMutual Plans to invest nearly $300 million into the Commonwealth and increase its workforce in the state by approximately 70 percent by the end of 2021, the company said earlier this month.
Was an expansion in Connecticut ever considered? “It’s not clear,” the Globe reported, indicating that a spokesman for the Connecticut Department of Economic and Community development declined to comment on whether state officials had been involved in any negotiations with MassMutual this year.
MassMutual is ranked number 77 on the Fortune 500 list with $675 billion in assets under management.