Senate Split Over Jackson Laboratory Deal [Hartford Courant]

October 26, 2011

Excerpt from a story as it appeared on Courant.com on October 26, 2011

Sen. L. Scott Frantz, a Greenwich Republican, said he was happy that Jackson intends to come to Connecticut, noting that some board members of Jackson live in his district in lower Fairfield County.

“I think it’s just terrific that they’re interested in Connecticut,” said Frantz. “However, with a capital H, … this is no ordinary economic development deal. We have to be very, very careful about putting this many resources into something with an unclear outcome.”

Frantz said the Jackson deal is moving so fast that it is like a locomotive barreling along at 200 miles per hour down the track.

A highly successful, millionaire merchant banker in Greenwich, Frantz is deeply familiar with venture capital and taking risks in the business world.

“The higher the risk, generally, the higher the reward has to be,” Frantz said. “There is no provision for Connecticut or UConn to share in the fruits of their labor … any kind of royalty sharing.”

“Don’t go putting too much into something until you can really get your hands around the investment,” Frantz said on the Senate floor. “Economic development is a passion of mine. I’ve been involved in it for nearly 20 years in the state of Connecticut. … This will spur lots of jobs in addition to the ones that are going to be placed there by Jackson Labs. We don’t know what that ratio will be.”

Frantz said on the floor that the normal multiplier in such deals is 5.7, but the job multiplier in the Jackson case is 10. But state economic development director Catherine Smith and others say that the multiplier in this case is actually 2.

“REMI models are great, … but it’s a bit of a black art, a black science,” said Frantz, a longtime investor. Sometimes the model is correct, but “others fell flat on their face,” he said.

Farmington will be competing against 19 other states that are trying to recruit bioscience companies.

“We’re not the only ones at this. It’s a highly, highly competitive field,” Frantz said. “It’s going to take a long time. It’s 10 years before they have to be at 300 jobs.”