🔒Daum takes reins of DECD’s new multimillion-dollar economic development programs, incentives strategy

Alexandra Daum, in her new role as commissioner of the Department of Economic and Community Development, plans to continue the work started by her predecessor in building, sustaining and promoting Connecticut.

The 35-year-old New Haven resident who had served as deputy commissioner under David Lehman, stepped into the lead role as of the first of the year, and is awaiting legislative approval of her appointment.

Daum said her real estate background makes her a good fit to lead DECD, especially as the agency focuses significant funding on urban redevelopment.

Prior to joining the agency, Daum was the founder of a New Haven real estate investment firm, Field Properties. Before that, the Harvard Business School grad worked for commercial real estate and investment giant Trammell Crow Residential in its northern California division.

Daum — a married mother of two children who still owns a small rental properties portfolio in the Elm City — said she has her sights set on four main focus areas in 2023: small business support, corporate business performance, smart growth in downtown and Main Street areas, and tourism.

Daum said many programs launched under Lehman, some of which she spearheaded, are relatively new, and DECD wants to foster them and see them take root.

For “2023 and beyond, it’s good to have consistency and a long-term view,” Daum said in a recent interview with the Hartford Business Journal. “It’s my opinion and the opinion of many in Connecticut, hopefully, that we’re on the right track, and that the DECD has been doing the right stuff. A lot of these initiatives are new, and we want to see them settle.”

Mixed-use housing

Revitalizing urban areas as well as smaller downtowns is a multifaceted top priority, with a strong focus on boosting mixed-use and other economic development, Daum said.

Two key programs were launched recently under the Lamont administration, including the $100 million Communities Challenge grant program, which invests in transit-oriented development and other housing projects.

The program has a goal of creating 3,000 jobs with 50% of the funding going to distressed municipalities. So far, two funding rounds have occurred, with more than $80 million going to 20 cities and towns and leveraging more than $217 million in private investment.

A third round of about $18 million is scheduled to be announced in 2023.

Projects that have received funding so far include $6.3 million for a mixed-use redevelopment of the Arrowhead Cafe block near Dunkin’ Donuts Park, which aims to create a better connection between downtown Hartford and the city’s North End. The planned $17.4-million project will result in 43 apartments and 7,300 square feet of retail space in multiple buildings.

Goodwin University’s efforts to build a marina on the Connecticut River near its East Hartford campus — part of a larger mixed-use development plan — got $2 million from the program.

Part of Communities Challenge’s focus is to help address the state’s affordable housing shortage, which is seen as a significant factor contributing to the workforce shortage, Daum said. Connecticut employers reported more than 100,000 job openings throughout 2022, and the state’s high cost of living has contributed to stagnant population growth over the last decade-plus.

“The Communities Challenge program is an example of DECD directly investing in housing projects,” Daum said. “We have the dollars and we have an opinion on where to build the housing in order to make sure that it helps serve our businesses and helps them to fill those positions.”

Rollout of another new initiative — the Innovation Corridor Program — was delayed in 2022 and could come to fruition in 2023, Daum said. It promised to grant up to $50 million for transformative projects mingling community development and job creation in urban centers.

Only three “eligible” applications — from Stamford, New Haven and Hartford — were received last year, according to DECD.

In Hartford, local officials requested $48.4 million, claiming the money would leverage another $242 million in private investment to create housing and advanced manufacturing research and training centers in the city’s Parkville neighborhood.

Grant announcements have been delayed, Daum said, because the initiative had “ambitious requirements,” and DECD was “looking for a really high bar of applications.”

One of the program’s biggest hurdles is a stringent 4-to-1 ratio of private sector to public money. That means 80% of the overall project’s price tag must be secured from private investors before the state kicks in the remaining 20%.

Daum said DECD is “still working with applicants … but no one has met that bar yet.”

“It’s a high bar and we don’t want to dramatically change criteria,” she said.

Meantime, brownfield remediation funding, one of Daum’s focus areas under Lehman, also allows her agency to support funding for cleanups in areas where housing or mixed-use development is most needed.

“We’d prefer a project that is going to create more units in an area that already has good infrastructure and good transit,” she said.

Incentives strategy

Another focus area, Daum said, will be continuing to prioritize performance-based incentives for larger businesses.

Lehman retooled the state’s business incentives strategy, which eventually led to the creation of JobsCT, a new rebate program that offers tax breaks to companies that reach certain job-creation targets.

JobsCT codifies the Lamont administration’s earn-as-you-grow incentives strategy, which marks a significant change from policies under former Gov. Dannel P. Malloy, who focused on providing upfront grants to businesses that promise to add jobs.

Under JobsCT, companies in specified industries may earn rebates against their insurance premiums and/or corporation business and pass-through entity taxes based on the number of new jobs they create. There are no upfront payments, and the tax breaks don’t kick in until year three.

Businesses in the finance, insurance, manufacturing, clean energy, bioscience, technology and digital media sectors are eligible for the rebates if they create and maintain at least 25 new positions.

Daum said DECD will also focus on providing support to smaller companies via the $150 million Small Business Boost fund, which was launched over the summer and provides low-interest loans of up to $500,000 to small businesses and nonprofits.

The program will be equally funded by the state and private banks. As of December 2022, five banks had signed on to participate, and 118 loans totaling more than $16.5 million had been issued.

That is on par with the expected demand, Daum said, and DECD will continue getting the word out about the program and helping applicants.

A majority of the loans have gone to minority, women or veteran business owners, “which is a huge goal of the program,” Daum said.

A CT rebrand

Daum said she also wants to realign the state’s tourism approach.

Highlighting Connecticut’s shorelines and more rural attractions is still a strategy, but Daum said there’s just as much to see and do in bigger cities.

“Whether you’re visiting or whether you’re thinking of somewhere to live, we have this extremely wide array of environments, including some of the best suburbs and small cities in the region,” she said.

Visitors or residents might want to hit the beach or an apple orchard, but the new Parkville Market might be a top destination for others, she said, so marketing and tourism campaigns must reflect the state’s diverse offerings.

Tourism in general is also seeing a major funding boost, from around $8 million in previous biennium budgets, to now closer to $24 million, with a statewide rebranding campaign on the horizon, Daum said.