The state is providing a low-interest, $19-million loan to two global steel companies that are combining to create a new business, Sustainable Building Systems, and open a North Haven headquarters that could eventually employ more than 400, the Malloy administration announced Wednesday.
The company is a joint venture of the Australian-owned Weeks Group and an Arizona company, Diverse Services Group. They will produce “sustainable building panels for homes, hotels, the military, as well as other applications,” the administration said.
“Today’s announcement is about jobs,” Gov. Dannel P. Malloy said in a statement issued by his office.
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The state Department of Economic and Community Development will loan the new venture $19.1 million at 2 percent interest in three installments, beginning with $10 million. Two other payments will be pegged to the creation of jobs.
The company will receive another $5 million within two years if it has created 208 jobs. The last installment of $4.1 million will be paid if it creates another 200 jobs in the next two years, for a total of 408 positions within four years.
With private investment, the total cost of the project will be $97 million.
In a press release from the governor’s office, an official from the Weeks Group said Connecticut was “strategically located” for its new business.
The Weeks Group builds homes and manufactures steel framing products for residential and commercial construction. It has seven subsidiaries, with joint ventures in Malaysia and the United Arab Emirates.
One of its subsididaries is Steel Buildings Systems International, which will be a part owner of the new venture. DSG calls itself a leader in “energy efficient and innovative building products.”
“These two companies are bringing the principles of advanced precision manufacturing to the construction industry,” said Catherine Smith, commissioner of economic development. “It’s that kind innovative spirit and entrepreneurialism that the state wants to support with the Governor’s First Five program.”
The First Five program was created to provide economic incentives to the first five companies that contract to create at least 200 new jobs. Five companies previously have received aid, but the program has been expanded.
The headquarters will occupy 400,000 square feet of space at 297 State Street in North Haven.
Malloy characterized the project as a vote of confidence in Connecticut, where unemployment is below the national average, while still remains at a relatively high 8.2 percent.
“We know there is a growing confidence in our state’s economy because more people are looking for work. That influx in the workforce caused our unemployment rate to increase slightly last month, and it may well increase again,” Malloy said. “But let’s be clear why this is happening. It’s happening because more people are looking for work and we continue to battle national and international headwinds.”
The day’s announcement brought Republican praise for the Democratic administration. Sen. Leonard Fasano, R-North Haven, said the administration work with local officials to find a tenant for the vacant building, which had been occupied by a printing company.
“This has been a joint effort of my office, the selectman’s office, Department of Economic and Community Development and the governor to bring jobs to North Haven,” Fasano said. “More than a year ago the talks began, and today we are celebrating more than 400 new jobs that will be coming to North Haven.”