State gives $24 million to keep company in Connecticut
Hartford — The fifth recipient of Gov. Dannel P. Malloy’s “First Five” program obtained $24 million in state aid Thursday with a hint of the genteel blackmail common to economic aid packages: the threat of leaving Connecticut for another state.
The state aid will help underwrite a move by CareCentrix, a fast-growing national health care company with $850 million in annual revenues, from East Hartford into two floors of a refurbished high-rise in downtown Hartford.
“Basically, this was a bet on the future job potential of this company,” Malloy said. “On a growth basis, I think it’s a pretty good investment.”
Eric Reimer
Malloy announced the award in the lobby of 20 Church St., where CareCentrix will occupy 30,000 square feet on the 11th and 12th floors of a high-rise popularly known as the Stilts Building.
The company will receive $12 million for retaining 213 existing jobs and can receive another $12 million by creating at least 290 new jobs over the next five years. CareCentrix will invest $86 million.
“First Five” is aimed at major employers pledging to create at least 200 new jobs. The previous recipients are Cigna of Bloomfield, ESPN of Bristol, NBC Sports in Stamford and Alexion in New Haven.
Eric Reimer, the chief executive officer of CareCentrix, said the company began a multi-state search for a new headquarters after outgrowing its offices in East Hartford’s Founders Plaza.
“We were going to have to move one way or another,” Reimer said.
While based in Connecticut, CareCentrix already has more employees in Florida and as many employees in Kansas, two states that were potential locations of a new headquarters, along with a third state, he said.
“We really took a very hard look and said what would be the cost of operations. How do the leases compare? How do the tax codes compare?” Reimer said. Of the “First Five” program, he said, “This again, really made Connecticut stand out.”
Malloy said the potential “loss of this company was real.”
To Reimer, he said, “I didn’t want to lose you to Kansas. And I didn’t want to lose you to South Carolina or Florida. We wanted to keep you here.”
Reimer declined to say directly if Florida, Kansas or South Carolina had offers on the table.
“We had a lot of conversations with folks,” Reimer said. “We know what our options were.”
CareCentrix is a provider of home health care that contracts with insurers to help patients remain in their homes, rather than in nursing homes or other rehabilitative facilities. Its care also can shorten hospital stays.
It is an important niche in a nation with aging population and growing health-care costs. Reimer said the company arranges services that save money, while keeping patients at home.
“The cost of a home care day is 90 percent less than the cost of a hospital day,” he said. “The nation needs to be treating people in the home, where it’s appropriate.”
The company has a network of 7,000 providers that have served 30 million people nationwide. It was founded in 1996 as part of Gentiva Health Services and became an independent company in 2008.
More recently, it has begun testing patients for sleep apnea in the home, something that often requires two nights’ stay in a medical facility at a cost of over $3,000. CareCentrix said their test is 75 percent cheaper.
It was nearly a year ago that Malloy made his initial First Five award: a package worth up to $71 million to Cigna in return for its investment of $100 million, the creation of as many as 790 new jobs and the designation of its Bloomfield campus as its headquarters.
“We finished our First Five,” Malloy said Thursday. But the program will continue as the enabling legislation allows up to 15 recipients.
Malloy said the program has retained 8,449, produced 2,640 new jobs and attracted $561 million in private investments.
If all five companies deliver on their job promises, they will receive $191 million.
The First Five
Cigna, Bloomfield: $71 million
ESPN, Bristol: $25 million
NBC Sports, Stamford: $20 million
Alexion, New Haven: $51 million
CareCentrix, Hartford: $24 million