🔒CT economic development officials search for answers following LEGO’s pending exit

Connecticut economic development leaders were caught a bit off guard by LEGO Group’s Jan. 24 announcement that it’s moving its North American headquarters and about 740 jobs from Enfield to Boston by 2026.

Now, officials are hoping to develop a better early warning and prevention system.

“I honestly don’t know if there is any particular action we could have taken that would have changed the outcome, but I think we are going to do a careful postmortem and sort of self-reflection to make sure that we are thinking about what might be other leading indicators of companies that could be a flight risk,” said Peter Denious, CEO of Advance CT, a nonprofit economic development organization that works with the state Department of Economic and Community Development (DECD) to retain and recruit businesses.

LEGO appears to have charted a course out of Connecticut long ago.

The Danish company had been cutting back its presence and hundreds of jobs in Connecticut for decades. In 2000, LEGO announced it would move manufacturing from Enfield to Juarez, Mexico, leaving behind headquarters staff and an operation that packaged toy bricks imported from Europe, according to the company.

The Enfield packaging plant closed in 2007, with its functions also relocating to Juarez, according to LEGO.

In June, LEGO announced a return of manufacturing to America. It would build a modern, $1-billion, 1.7 million-square-foot factory that will employ 1,760 people — in Virginia.

That prompted phone calls from Gov. Ned Lamont and staff at DECD, the MetroHartford Alliance and AdvanceCT. All were worried about what this meant for LEGO’s 740-employee American headquarters in Enfield.

“Obviously, we were not happy over the summer about the news they were moving a manufacturing facility to Virginia,” said DECD Commissioner Alexandra Daum. “That was not a good sign, and so we were trying to stay in further touch with the company to see if that was a sign of further moves to come. So, it was on the radar, something we were keeping our eye on.”

Daum said discussions never got to the point where the state made a comprehensive incentives pitch to keep LEGO’s headquarters in Enfield.

Denious said LEGO didn’t mention plans to relocate its headquarters in conversations that followed the Virginia project announcement. Accordingly, there was no discussion about accommodations that could be made to keep the headquarters here, he said.

“We were, I think, left with the impression there was nothing imminent, there were no further changes contemplated,” Denious said of talks with LEGO in which he was involved. “I think they did share the challenge of getting folks to their Enfield location, but that was really the extent of what they shared with us over the course of 2022.”

LEGO declined an interview request for this story, but referred an HBJ reporter to the press release the company issued in January.

In that announcement, Skip Kodak, president of the LEGO Group in the Americas, praised the company’s future ability to attract and retain talent in Boston, as well as the Massachusetts city’s world-class academic institutions, skilled workforce and great quality of life.

Denious said AdvanceCT plans to continue discussions with LEGO about not only why the company moved, but how Connecticut representatives could have learned more and interceded earlier.

“The question is what can we learn? What can we do better,” Denious said. “That’s what we can take away from this. Let’s have a candid conversation. We already have but we want to continue. Let’s peel this onion. Why didn’t you give us the chance to pitch Hartford? Why not? You drew conclusions before you even gave us a shot on goal.”

New retention specialist

Two weeks before LEGO announced its planned move, AdvanceCT had some news of its own.

It hired Catherine Scangarella as its new executive vice president of business retention and expansion. Part of her job is to try to make sure companies like LEGO don’t leave the state.

There was a bit of irony in the timing of her arrival. Denious said Scangarella will be a key part of the state’s beefed-up business retention arsenal. Most recently she worked as chief business development officer for Choose New Jersey, a business recruitment nonprofit in the Garden State much like AdvanceCT.

Scangarella’s position isn’t entirely new. She is stepping into the shoes of AdvanceCT’s former vice president of partnerships, but will have a narrower focus.

Unlike her predecessor, Scangarella is not responsible for coordinating with the state’s many other municipal and state economic development entities. Those duties now fall to a subordinate.

Instead, she will spend her time keeping tabs on and interacting with businesses. In her first month on the job, Scangarella has put 1,000 miles on her Volvo S60, visiting businesses around the state.

“For business retention, the best way to be successful is to research the companies that are showing signs of growth or signs of change, then figure out which ones are the most important to meet with,” Scangarella said. “I think one of the most important things is establishing a relationship with us, so they know where to turn when they’ve got questions or needs.”

See related stories: What’s next for LEGO’s Enfield headquarters property?

LEGO’s departure draws attention to Lamont administration’s new incentives strategy