Lehman is confident that Connecticut can attract millennials

By Scott Benjamin

HARTFORD – State Department of Economic and Community Development Commissioner David Lehman says “structurally, one of the biggest things we need to address” is to make Connecticut, a largely suburban state, more competitive to the demands of a modern economy in which many millennials flock to large cities with innovation hubs.

“Our composition benefitted us in the 1970s, ‘80s and ‘90s when people were looking for suburbia and cities were considered dangerous,” said Lehman of Greenwich, who in February was appointed as commissioner after he left his position on Wall Street as a partner with Goldman Sachs.

Pollster Stanley Greenberg wrote in “America Ascendant,” his 2015 book, that two-thirds of college-educated millennials live in the nation’s 51 largest cities. None of those are in Connecticut.

“I think that we need to have cities with a vibrant, dynamic feel similar to New York and Boston,” said the commissioner. “I don’t think that we need one [million] to eight million people to do that. I think we can do that with some of the cities here, with some focused investment.”

For example, Lehman said that Stamford - Connecticut’s third largest municipality - has the “feel that it’s a vibrant, dynamic city,” with a diverse group of major employers, such as Gartner, Indeed, Henkel and Pitney Bowes and a raft of restaurants and night clubs.

“There is no reason that New Haven, Bridgeport and Hartford shouldn’t be the same way,” added the commissioner, who by mid-May had visited about 70 companies in the state.

Lehman noted that a survey distributed in April by the National Association of Realtors reported that 75 percent of the recent moves to the New Haven-Milford area were millennials, making it one of the top ten metro areas in the country in that category.

The survey stated that 22 percent of the population in New Haven-Milford are millennials.

It also indicated that overall millennials primarily make moves because of available jobs and affordability.

“We need to have the housing and the amenities that the larger cities have but be able, as we are capable of doing, of having them at a fraction of the cost of these more expensive places,” Lehman said.

As for creating more jobs, The Boston Globe reported in a December 2016 comparison of the Massachusetts and Connecticut economies is that “one key issue is that Connecticut hasn’t adapted to the demands of a modern economy.”

The newspaper stated that from 2000-2016, the sector of Massachusetts’ economy that employs engineers, architects, software designers, consultants and scientific researches grew by 50 percent. Over that same period that sector of Connecticut’s economy increased by just six percent.

Connecticut, which the Globe described as once being “the unrivaled economic powerhouse of New England” largely as a result of it “leveraging its proximity to Manhattan,” is now the only state in the region that hasn’t recaptured all of the jobs it lost from the 2008 recession.

Lehman said he believes there are opportunities for considerable job growth in technology, advanced manufacturing, bio-science and health care.

At a February 1 news conference, Gov. Ned Lamont (D-Greenwich) appointed Lehman as commissioner and as senior economic advisor as well as making former Webster Bank Chief Executive Officer James Smith of Middlebury, who was co-chairman of the recent state Commission on Fiscal Stability and Economic Competitiveness, and former Pepsi Chief Executive Officer Indra Nooyi, a Yale graduate school classmate, as co-chairmen of the Connecticut Economic Resource Center (CERC).

Lehman said they have been “retooling” CERC, which “will lead the state’s business retention and recruitment activities.”

Lehman said Lamont has revised the First Five Plus program that former Gov. Dannel Malloy (D-Essex), his immediate predecessor, had established in 2011.

He said the state will no longer provide funding incentives immediately to employers that are going to move to Connecticut or to existing companies that are adding many jobs.

Regarding the changes, Lehman said, “First and foremost, to the best of my research and knowledge, we were unique in terms of how we did some of these incentives.”

“Many of those incentives were where the new job were created and the tax revenue would be realized before they were awarded,” the commissioner explained. “In Connecticut they won’t be given on day one anymore but they will be given as the company increases jobs in the state.”

Lehman said the revised program is similar to the one offered in Virginia for the second Amazon headquarters.

He said the benefit will be that “the state won’t find itself in a situation where jobs were promised and that promise wasn’t followed through on. Plus, the state is not exposed to any business risk or credit risk,” said Lehman. “The burden is rightly on the employer to create the jobs.”

Under Malloy, the state had provided considerable incentives to such companies as Bridgewater Associates in Westport, the largest hedge fund in the world, and ESPN in Bristol, the biggest cable-related enterprise in the world.

Lehman said he agrees with Lamont that it is not just that Connecticut has fewer jobs than it had in 1989, but that far too many positions go unfilled because there aren’t qualified applicants, particularly in such areas as manufacturing and the building trades.

“A degree from a technical high school or a community college in advanced manufacturing will get you an initial higher-paying job than if you had a degree in Sociology from Yale,” Lamont said last year in a phone interview with Brookfield Patch.

Lehman said, “One of the first questions from prospective employers outside the state is “ ‘Can I hire the people we need to be successful?’ “

He said the top concern from employers is addressing a state economy that contracted eight percent between 2008 and 2016, according to the March 2018 report of the state Commission on Fiscal Stability and Economic Competitiveness.

Lehman said the second most important topic is an inefficient transportation system.

Lamont has proposed establishing tolls on Interstates 84, 91 and 91 and the Schuyler Merritt Parkway to raise an estimated $800 million annually for transportation infrastructure improvements across a state with clogged highways and slow trains.

A 2015 ad-hoc committee chaired by former state Rep. Cameron Staples (D-New Haven) recommended $100 billion in improvements over 30 years.

Lehman said that extending the runway at Jack Tweed/New Haven Airport “would allow the state to become the economic engine that it could be” since “for many people” in the state’s southern corridor it can take up to 90 minutes to drive to Eugene Bradley International Airport in Windsor Locks, Connecticut's major venue.

The commissioner said the insurance and financial services industries “will continue to be a strength. We should not take it for granted. But I don’t see them as an explosive growth area from an employment perspective.”

“I think they are business areas that you’ve seen some structural head winds over the last 10 years,” Lehman said.

He said, for example, the Stamford is starting to establish a financial technology apparatus.

“The dynamic has changed,” said Lehman. “It used to be for some financial jobs you had to work in New York City and you might live in Greenwich and Stamford. Now you can do that job from Miami or Dallas.”

Since the major defense manufacturers – Igor Sikorsky in Stratford, Francis Pratt and Amos Whitney in East Hartford and Electric Boat in Groton – have recently made long-term commitments to Connecticut, the commissioner believes that “aerospace and defense spending will continue to be a tail wind for us.”

Regarding some of the metro areas in the Nutmeg State, Lehman said he is impressed with the array of companies in Stamford that have, in effect, filled some of the void after UBS reduced is operations following the 2008 financial crisis.

“The more diverse you are, the more resilient you are,” said the commissioner. “You’re not relying on one company to boost the grand list.”

Independent gubernatorial candidate Oz Griebel of Hartford said last year that New Haven’s economy had changed over the previous 20 years, partly because of the efforts of former Mayor John DeStefano and Yale President Rick Levin. Over the recent years, the university has added several new science and health projects. Yale-New Haven Hospital is the most significant hospital employer in the region.

Lehman said current Mayor Toni Harp and current Yale President Peter Salovey have established a similar relationship.

“Yale is really embracing that they and New Haven are one,” said Lehman.

He said he also is “very optimistic” about Bridgeport, the state’s largest city with 147,000 people, even though was rated as the worst municipality to live in Connecticut in a recent report by Wall Street 24/7. (Darien was rated as the best.)

“It has close proximity to New York City and New Haven, and it has some of the best real estate boat access,” Lehman said.

On another topic, the commissioner said he believes that online buying will continue to have an impact on Connecticut’s economy.

“I think you will see more distribution facilities and logistics centers,” Lehman predicted. “That trend will definitely continue.”

Amazon already has centers in Wallingford and Windsor Locks, and another, which is under construction in North Haven, will open in July.