State Offered Development Deal To Makers Of   Gun Used In Newtown Massacre

A Bushmaster semi-automatic assault rifle (top) and a Smith & Wesson semi-automatic rifle are turned in during a gun buyback event at the New Haven Police Academy in New Haven, December 22, 2012. (Michelle McLoughlin / Reuters)

Eight days before Adam Lanza used a Bushmaster AR-15 semiautomatic rifle to kill 26 children and women on Dec. 14 at Sandy Hook Elementary School in Newtown, state officials offered the manufacturer of the gun a development deal to move its corporate headquarters to Connecticut.

On Dec. 6, a top state economic development official sent the Freedom Group an offer for a $1 million loan at the low annual interest rate of 2 percent for 10 years — plus other incentives for the company to move its headquarters, with 25 top executives, from Madison, N.C., to Stamford.

The department withdrew the offer on Dec. 18, four days after the Newtown massacre, according to records released in response to a Courant freedom of information request.

The deal was yanked because of a combination of factors, one of them the announcement by the Freedom Group's owner — the private equity and hedge fund group Cerberus Capital Management — that it was putting the firearms maker up for sale.

But, in addition to that, "it would be naive to think that … the tragedy that occurred on the 14th of December" wasn't a big factor, said Deputy Commissioner Ronald F. Angelo Jr. of the state Department of Economic and Community Development, or DECD.

"It was a significant tragedy that was fresh on everybody's mind," Angelo said this week. "If you take that into account, along with the very unknown structure and unknown condition of the Freedom Group because of the [announced] sale of that entity by its parent, it's too much of an unknown, too much of an unpredictable" situation.

Freedom Group is a holding company for the manufacturers of widely known brands including Bushmaster and Remington Arms. Bushmaster's version of the military-style AR-15, originally manufactured in Maine, now is made at the Remington Arms factory in Ilion, N.Y.

In the three months since the Sandy Hook massacre, Democratic Gov. Dannel P. Malloy and his administration have led the call for strong gun-control measures — including a ban on the purchase of semiautomatic rifles such as the Bushmaster. The Democrat-controlled legislature is planning to pass legislation along those lines within weeks.

But prior to Dec. 14, the holding company for Bushmaster was viewed by Malloy's administration as a corporate plum worth attracting to the city where the governor was mayor for 14 years.

"The Connecticut Department of Economic and Community Development (DECD) is pleased to provide this revised letter of intent … in support of the Freedom Group's … $2,250,000 Headquarters project in Stamford, Connecticut," Angelo wrote on Dec. 6 on behalf of Malloy's DECD commissioner, Catherine H. Smith. "One of Governor Malloy's top priorities is to create a business-friendly environment that attracts investment, spurs job growth and helps industries become more competitive in the global marketplace."

"In consideration of the Company's commitment to create 25 full-time jobs in Connecticut, we are pleased to have this opportunity to work with you on a project that will relocate your corporate headquarters," Angelo wrote to Stephen P. Jackson, an executive for the Freedom Group.

Besides the $1 million, low-interest loan, other incentives in the Dec. 6 letter were Freedom Arms' possible eligibility for forgiveness of $550,000 of the loan, and for tax credits, if it delivered on its pledge to bring the 25 jobs to Connecticut.

However, on Dec. 18, Angelo wrote a one-paragraph letter to Jackson, the Freedom Group executive. He said that he was following up on a telephone conversation with a different company representative — adding that "this letter provides official notice that [DECD]'s offer of financial assistance, as outlined in our letter of intent dated December 6, 2012, is hereby withdrawn. The department will not be supporting the Freedom Group's proposed project."

Angelo said that his phone conversation with the Freedom Group representative about withdrawing the deal was an amicable one, on both sides.

Asked whether the state would consider another deal with Bushmaster after Newtown, Angelo said he could not "speculate on that at all."

"The words I choose to use [are that] I would not consider this to be an active project."

Angelo said the proposed deal emerged after the company contacted the DECD in June 2012 about the possibility of moving its corporate headquarters — not its manufacturing facilities — to Connecticut. The letter of intent did not mean that the state and Freedom Group had a deal, Angelo said, adding that there would have been more "due diligence" and further discussion before any binding terms would have been reached. That generally takes six months or longer, he said.