MANCHESTER CT — The Board of Directors on Tuesday approved a tax-abatement agreement and living-wage waiver for the construction of a new headquarters for Bob’s Discount Furniture.
Since it is the weekend and the markets are closed, I doubt the commissars will mind if I take up a little space on the server farms here at iBankCoin this morning. Jeff Macke has 5 terabytes of virtual server storage specified in his contract, so fuck it, I’ll take my chances.
I had planned on starting a rant on the fiscal State of my State – Connecticut – “The Constitution State”, founded by religious lunatics who broke away from the Massachusetts Bay Colony to form a Taliban-like government that required church attendance and levied a tax payable directly to the church. In fact the Congregational Church was the Official Church of the State of Connecticut until 1818. This situation was what prompted Thomas Jefferson to write his famous letter to the Danbury Association regarding the meaning of separation of church and state.
It has taken about four centuries, but Massachusetts is now finally fighting back against the breakaway colony and has been luring away businesses from their debt-laden southern neighbor via tax incentives. The biggest prize of course being the World HQ of conglomerate General Electric Corporation which is packing up and moving to the Boston area after residing in CT pretty much forever.
Then I saw the story about Bob’s Discount Furniture and it put me in a shitty mood so Connecticut’s fiscal mess can wait for another time. So please, Dear Reader, if I am missing something here, enlighten me because it gives me Bad Feelings about the state of the union and our basic priorities as a nation.
We all know Bob. He always reminded me of that uncle who might have been a little too fond of the Sherry, the one you tried to sit far away from at the Thanksgiving table. Bob Kaufman started off selling water beds back in the 1970’s and together with his partner went on to create an enormous chain, building a huge presence through tv ads hawking cheesy leather sofas with dual power recliners, built-in USB ports and Bob-O-Pedic foam cushions. Bob is now a very, very wealthy man since he sold majority interest for $350 million – to venture capital.
Bob’s employs a couple of hundred people at it’s Manchester location and recently announced an expansion of the corporate HQ, which will bring in an additional 125 employees at an average salary of $56000. This all sounds pretty good to a Kapitalist like myself until I see the “incentives” (bribes) being given to the company in an effort to keep it in Connecticut.
“The Board of Directors on Tuesday approved a tax-abatement agreement and living-wage waiver for the construction of a new headquarters for Bob’s Discount Furniture.
The abatement, which will last seven years, will save the company $2.9 million.
The value of the currently undeveloped land on Tolland Turnpike where the facility will be built will increase to $17 million when the building is completed, according to town estimates, but over the period of time, the company will pay only a portion of the related real estate tax.
In the first three years of the abatement, the company will pay $7,285 in taxes, based on the land’s current assessment. For the fourth through seventh years, that figure rises by either 5 percent or 10 percent.”
I pay $12000 yearly property tax on my house. In fucking Norwalk.
Now don’t get me wrong, Dear Reader, as 125 jobs is nothing to sneer at. And those 125 jobs will pay the same exorbitant taxes as the rest of us toiling in this high-tax state.
But here is where the shit gets weird, and I finally come to the point of this exercise. There is a Living Wage Waiver specified in the corporate welfare, sorry tax abatement that I am discussing.
I did not even know what that meant so a little digging in The Hartford Courant urged up this nugget…17 of the new employees to be hired would not receive what Manchester’s own laws specify as a wage necessary to feed a family of four. 17 employees. For an estimated savings of $32000.
“However, the town’s living wage ordinance requires companies that receive such benefits to pay their workers an hourly wage based on 115 percent of the federal poverty level for a family of four. The rules also allow directors to waive the requirement. Bob’s sought a waiver because 17 entry-level employees of a total of 1,052 workers in the state do not make the wage specified in the ruling”.
And here is where it goes off the rails: The majority owner of Bob’s Discount Furniture is our old friend Bain Capital. This pisses me off. Maybe I am missing something. To be fair, Bob’s has a sterling record of giving back to the community via charities. Have a great weekend.If you enjoy the content at iBankCoin, please follow us on Twitter