Hartford: Polyfirst can sell bonds

By JOE VANDELAARSCHOT - Daily News

April 16, 2015

HARTFORD - A two-phased expansion of Polyfirst Packaging in Hartford took another step after the Hartford Common Council on Tuesday approved the company’s sale of tax-exempt industrial development revenue bonds to fund the project.

The city will not issue the bonds — Polyfirst will — but the city is supporting the company by allowing it to use the city’s tax-exempt status to sell them. The bonds are more attractive for purchase by investors because they don’t have to pay taxes on the money they receive when the bonds are paid off.

City Administrator Gary Koppelberger said the action was a preliminary resolution for the bonds. The final resolution and approval will come some time later.

“The bonds are expected to be a maximum of $7.5 million, about $2.25 million of which is a refinancing (some company debt) at a lower interest rate,” Koppelberger said. “The final numbers will be confirmed at the approval of the final resolution.”

Council President Tim Michalak said the arrangement does not put the city at any risk and costs the city nothing to help the local business finance an expansion. The city benefits by receiving more taxes from the company after the project is completed because of the increased property value.

“The bonds are one of the oldest forms of federal tax loopholes/incentives,” Koppelberger said.

Michalak said the city does charge the company a small amount for the time and effort city employees must put in to help with the arrangement. Hartford Economic Development Corp. Executive Director Tom Hostad said he’s been told the company hopes to break ground around May 1.

“They still have a couple of permits that need to be approved,” City Planner Justin Drew said.

Polyfirst’s Chief Financial Officer Andy Garni said earlier the company hopes to add about 40 jobs when both stages are complete.

“In the first phase, we plan to construct a new building with 20,000-30,000 additional square feet of space on the east side of our parking lot,” Garni said. “In the second phase, which should begin right after the first phase is done, we plan to add 20,000 more square feet to the south end of our existing building.”

Polyfirst is one of the country’s largest producers of specialty plastic bags and plastic packaging. The company’s facility covers 50,000 square feet.

Hostad said the company has been working with the state to gain rail access so they can transport raw materials by train instead of by truck.

“I know the company has had discussions with the DOT and they’ve filed an application, but I don’t where that stands right now,” Hostad said.