The holiday season is stressful for many people, but for attorney John F. Stafstrom last November and December were a particular challenge.
The long-time Pullman & Comley lawyer led a hurried two-month-long negotiation on the financing package for the states’ $291-million Jackson Laboratory deal.
Stafstrom led a team of about four Pullman lawyers who were hired by Connecticut Innovations and the University of Connecticut to structure $191 million in forgivable loans and $99 million in grants for Jackson Lab, the Maine-based genomics research firm that is building a major campus in Farmington.
He also acted as a liaison to the state on the $290 million in bond financing needed to create the Connecticut bioscience collaboration.
A deal the size and scope of Jackson Lab would normally take about four months to negotiate, Stafstrom said, but he and his staff worked hundreds of hours a week to complete it in two months. There were numerous negotiating sessions. One conference call lasted seven hours.
Stafstrom said he even cancelled a two-week vacation he booked to Europe in order to get the deal done by Jan. 1.
“It wasn’t my most pleasant holiday season,” Stafstrom recalls with a smile. “But it’s the kind of deal you really want to be involved in. We took what was a very significant deal and pretty much closed it in 60 days. It was a very accelerated time frame.”
Stafstrom is the chair of Pullman & Comley’s public finance department and a major player in many large government bond transactions across the state.
He has represented the state, state authorities, municipalities as well as major private companies that do business with the state and seek state assistance.
It’s a large and growing clientele, particularly with the multitude of tax credit, loan and grant programs that have been started by the Malloy Administration, which Stafstrom and his firm have close ties to.
Stafstrom’s husband Dennis Murphy, for example, is the acting commissioner of the state Department of Labor. And Gov. Dannel P. Malloy’s chief legal counsel, Andrew McDonald was a former Pullman & Comley partner.
Stafstrom said both reputation and strong relationships help drive business.
“Relationships are important,” Stafstrom said. “We’ve been able to develop significant relationships with people we’ve known for a long time who are now in positions to make things happen for the good of the state. We have a high level of credibility with government officials, whether we are representing them or are on the other side of the table.”
It was that credibility that helped land Stafstrom and his team at the negotiating table for one of the most significant economic development initiatives in the state’s recent history.
The Malloy Administration announced last fall its plans to lure Jackson Laboratory to the University of Connecticut Health Center in Farmington as part of a $1.1 billion investment in the personalized medicine industry. But the deal was far from complete at the time of the announcement.
Besides needing to scrounge up political support, the complicated contract negotiations needed to be hashed out. That included structuring a $190 million loan and $99 million in grants to Jackson Lab, with many strings attached to try to ensure that Connecticut eventually gets a return on its investment.
Stafstrom and his team were hired by Connecticut Innovations to negotiate and document the deal. Meanwhile, other Pullman & Comley lawyers represented the University of Connecticut on real estate and environmental issues associated with the deal, which includes the build out of a 250,000-square-foot, state-of-the-art lab space.
Stafstrom said the negotiations were cordial, but “very extensive.” The main issues were protecting the state’s investment, determining how state funds would flow to Jackson Lab, and getting guarantees from Jackson Lab on the infrastructure build out and job creation numbers.
Negotiations were in full swing by November and an agreement was reached by Jan. 1. Malloy announced the terms a few days later.
The complicated agreement includes Connecticut Innovations securing for Jackson Lab a $145 million construction loan and a $46.7 million loan for fit-out in the new facility, both of which will be forgivable if certain hurdles are met. That includes Jackson Lab agreeing to create at least 300 jobs within 10 years, including at least 90 senior scientist positions.
The average annual wage of employees must be equal to 125 percent of the Connecticut average wage.
On the real estate side, the UConn Health Center is providing a long-term land lease to Jackson Lab to allow for the construction of the facility. When 600 jobs are created, the land will be conveyed to Jackson Lab.
Stafstrom said helping put together the deal was the hardest he has worked in 15 years.
“It was worth it because it helped make a difference in spurring bioscience and technology in Connecticut,” Stafstrom said.
Catherine Smith, the commissioner of the Department of Economic and Community Development, worked with Stafstrom on the Jackson Lab deal and said he was a key player in the negotiations.
She said the deal was complex because three different entities were involved, but Stafstrom’s listening and collaboration skills were key to getting a deal done. Smith said one of her priorities was keeping the state’s legal bills to a minimum.
When Stafstrom brought another partner from Pullman & Comley to an initial meeting, Smith said she aired concerns about the associated costs. After that, Smith said Stafstrom was the only partner involved in the deal, doing much of the work, along with some junior associates, on his own.
“He was kind of a one-man band,” Smith said. “He was really the orchestrator making sure all the different pieces fell together.”
Stafstrom is a Connecticut native. He grew up in Newington and got his law degree from the University of Connecticut School of Law. His undergraduate degree from Holy Cross in Massachusetts was in accounting and economics, but Stafstrom said he was not interested in becoming an accountant.
Business law turned out to be his real interest. After graduating from UConn he eventually landed at Pullman & Comley, which was a smaller firm at the time with 29 lawyers and one office in Bridgeport.
Stafstrom recently celebrated his 31st year at the firm, which now has 90 lawyers and offices in Bridgeport, Hartford, Stamford, Waterbury and White Plains, New York.
“It’s unusual for people to stay in the same place for that long amount of time,” Stafstrom said. “But the firm has a great atmosphere and people are supportive of each other and work in teams.”
Stafstrom said he splits time between the firm’s Hartford and Bridgeport office. He also owns a condo in downtown Hartford.
An arts fan, Stafstrom said he has season tickets to TheaterWorks in Hartford, which is across the street from where he lives.
He also stays politically active. During the recent primary, for example, he ran four precincts for State Rep. Andres Ayala, a Bridgeport Democrat who could become the first Latino in the Connecticut state senate.
On the professional front, Stafstrom said he and his team have developed a niche specialty in nontraditional public financing, particularly in tax credit programs and public-private partnership deals.
The firm, for example, helped draft special legislation to establish tax incremental financing districts — an economic development tool used rarely in Connecticut — in Stamford, Bridgeport, Southington and Windsor. They also negotiate the TIF district and do the actual bonding.
Some of the projects are now paying dividends. The Harbor Point Infrastructure Improvement District in Stamford, which issued $140 million in TIF bonds in 2009 despite the recession, recently landed hedge fund Bridgewater Associates, which plans to build a $750 million headquarters there.
Bridgewater, which is currently based in Westport, was lured to the area by a $115 million tax incentive package provided by Malloy’s “First Five,” program.
Pullman & Comley has also represented the state in negotiating at least half of Malloy’s “First Five,” deals, Stafstrom said.
Federal new market tax credits and employment tax credits are also hot right now, he added, but the next big thing could be private, public partnerships.
“We are really starting to develop an expertise in tax credits and a lot of our clients are looking to finance projects with them,” Stafstrom said.
