A tech company announced last August it would hire 250 people to staff an office in Waterbury. But in recent months, it quietly canceled those plans.
The development comes even though the company, MTX Group, was in line to receive the largest-ever award from a controversial state economic incentive program. Details of that award remain secret.
MTX — which was founded in Albany, N.Y. in 2018 and is headquartered in the Dallas region — declared last year that it was “committed” to creating 250 jobs in Vermont over a five-year period, with the creation of a “Northeast regional office” in Waterbury. In December 2021, state officials approved an incentive package worth $6.3 million. The firm would have received the money if it followed through on its pledge to create new jobs in the state.
“Due to changes in market conditions, MTX restructured earlier this year and will not be opening an office in Vermont at this time,” said Amy Desler, MTX’s director of communications, in a brief statement to Vermont Public. “We look forward to continuing to contribute to the state and local economy.”
The company went as far as to lease over 18,000 square feet of office space in Waterbury in a complex along Route 100, which was formerly occupied by Keurig Dr Pepper. For months, a sign with MTX’s logo has sat on the edge of the property, facing Route 100. But that office space is now being subleased, according to Tony Blake of V/T Commercial, the listing agent for the space. The owner of the office complex did not return requests for comment.
About two months ago, Jamie Stewart, the executive director of the Central Vermont Economic Development Corporation, said he reached out to the company to discuss a workforce training program which he expected to set up for MTX’s prospective employees in Vermont. That’s when he said MTX, which primarily works on IT projects for state and local governments, informed him that they no longer planned to open a Waterbury office.
Stewart said company officials told him they were “reevaluating where they were taking their expansion.”
“Of course it's unfortunate," he said. "If you look at the jobs that we were talking about here, these were incredibly high-paying jobs."
“Of course it's unfortunate. If you look at the jobs that we were talking about here, these were incredibly high-paying jobs.”Jamie Stewart, Central Vermont Economic Development Corporation
But records show there were signs that MTX’s commitment to Vermont was shaky well before it sought taxpayer-funded incentives.
MTX officially dissolved its business in Vermont this week, when it filed an article of dissolution with the Secretary of State’s office. The company’s registration with the state, however, had lapsed 18 months ago, when it failed to file a routine annual report, according to a spokesperson for the Secretary of State’s office. MTX’s registration was listed as “terminated” in March 2021, months before it announced its Waterbury expansion plans and before it applied for millions of state dollars from the Vermont Employment Growth Incentive (VEGI) program.
On Aug. 11, the company asked the state to cancel its $6.3 million award from the VEGI program, according to Abbie Sherman, the executive director of the Vermont Economic Progress Council (VEPC), which oversees VEGI.
It’s unclear whether MTX received any money from its VEGI award. Companies that are approved for VEGI make claims for funds to the Department of Taxes, but only if they meet growth targets laid out in their VEGI application. But under Vermont law, details about company-specific VEGI claims, payments and applications can not be made available to the public.
Sherman and a tax department official both declined to say whether MTX made a claim for a VEGI payment or whether it received any funding.
“People usually don't get paid if they don't create the jobs,'' said state Economic Development Commissioner Joan Goldstein. “And so, although we're disappointed, we do think the safeguards are within the program to protect taxpayer funds.”
MTX’s $6.3 million incentive was the highest single award given final approval by VEPC in the VEGI program’s 15-year history, according to VEPC records. Goldstein said it's rare for a company to receive final approval for a VEGI award and not follow through with its growth plans, but she said she would not question VEPC’s decision to approve MTX for a large incentive.
“At the time, there was seemingly a commitment [from MTX] to being in Vermont, growing in Vermont, and of course, we welcome that,” Goldstein said. “They went as far as getting a lease, so everything was made for all the right reasons. Let's put it that way.”
The VEGI program has been criticized, most notably by state Auditor Doug Hoffer, for its lack of transparency. Rep. Emilie Kornheiser, vice chair of the House Ways and Means Committee, said MTX’s case again raises questions about the secretive nature of the program and whether VEGI is an effective way to entice businesses to Vermont.
“We need to really examine deeply the assumptions behind [VEGI]: The idea that businesses move because of, you know, one incentive, rather than the larger social, financial, workforce ecosystem,” Kornheiser said. She added that she plans to re-introduce legislation next session that would add new transparency measures to VEGI, among other reforms to the program.
When it first announced its Vermont plans last August, MTX officials had glowing words for the Green Mountain State. A company press release quoted company co-founder Nipa Nobel, who is married to CEO Das Nobel and said her husband would be on-site to welcome and train Vermont employees.
“Vermont creates an unbelievable gravitational pull with Das' vision for communities,” Nipa Nobel said in the release. “Das fell in love with Vermont and Vermont will admire his actions in helping residents thrive."
In an interview withSeven Dayslast year, Das Nobel said he was considering buying a second home in the state. In that interview, he also said MTX would have opened an office in Vermont with or without state incentive money.
That assertion flew in the face of a central requirement of VEGI: Awards are approved on the condition that a company’s growth would not happen, or would be substantially different, “but for” the state incentive. Days after the Seven Days article was published, Nobel wrote a letter to the editor in the Waterbury Roundabout claiming MTX’s planned expansion “would not have happened without the incentive.”
“We need to really examine deeply the assumptions behind [VEGI]: The idea that businesses move because of, you know, one incentive, rather than the larger social, financial, workforce ecosystem."State Rep. Emilie Kornheiser
Prior to announcing plans to open an office in Vermont and applying for VEGI, Nobel gave money to several top elected officials during the 2020 election cycle, including a $2,000 gift to Gov. Phil Scott’s campaign and $2,000 to the campaign of then-Attorney General TJ Donovan.
MTX calls itself a “global technology consulting firm that enables organizations to modernize through digital transformation.” The company experienced exponential growth during the early part of the pandemic. In the spring of 2020, the firm won a $295 million contract with the state of Texas to run the state’s contact tracing program, beating out other, more established companies including IBM and AT&T, according to CBS News. The Houston Chroniclereported the deal received bipartisan criticism, due in part to a hasty bid process. The company also snagged a $46 million contact tracing contract with New York City later that year.
MTX has also worked with the state of Vermont. Since 2019, it’s held a state contract worth up to $15 million. State agencies and departments can tap into that contract for a wide variety of digital services, including mobile app development, web development and “cybersecurity incident response,” according to the contract. Most notably, MTX assisted the Department of Labor with its pandemic unemployment program, helping shore up a beleaguered system that struggled as unemployment claims skyrocketed in the spring of 2020. The state contract MTX holds is currently out for bid, and submissions are due this Friday.
Vermont was not the only place where MTX announced plans to expand last year, as the tech firm appeared to be on a path of exponential growth. Shortly after its Vermont announcement, itdeclared plans to create 250 jobs in Albuquerque, New Mexico. That was followed by a release in October touting plans to create another 250 jobs in Rhode Island.
An Albuquerque economic development official did not respond to requests for comment, but it appears MTX has yet to follow through on its Rhode Island plans. Jennifer McGee, a spokesperson for Rhode Island Commerce, said the company has not opened an office in the state.
“Like many technology companies, they are evaluating their expansion strategy because of the COVID pandemic,” McGee said in an email to Vermont Public.
In another sign the company may be scaling back around the country, MTX ended a deal with FC Dallas, a Major League Soccer team, to have its logo on the team’s jerseys. According to theDallas Morning News, the company signed a seven-year sponsorship deal with FC Dallas two years ago. Instead, the logos will come off the team’s jerseys at the end of this year.
“People usually don't get paid if they don't create the jobs. And so, although we're disappointed, we do think the safeguards are within the program to protect taxpayer funds.”Economic Development Commissioner Joan Goldstein
Back in Vermont, Jamie Stewart, the economic development official for central Vermont, said in retrospect, MTX’s plans for the state may have been overly ambitious, but he still welcomed the potential opportunity at the time.
“Anytime you have a company that is projecting that level of growth, you're always concerned that they may be overshooting, that they may be planning for things that they will have difficulty accomplishing,” Stewart said. “But at the same point, if it could have been us to get those jobs, if they had occurred here, the benefit that we would have seen for the population of Vermont would have been incredibly strong.”
While dozens of tech jobs from MTX won’t be coming to Waterbury, Stewart and other economic development officials noted that there are other promising business plans in town. Namely, another tech company, this one with roots in Vermont, broke ground last week on a 22,000-square-foot office complex near Route 100, not far from where MTX had planned to move.
The company, Ivy Computer, has been in Vermont since 1986. It makes software for the waste management industry, and Stewart said the company plans to significantly grow its workforce in the coming years.
“That's an incredibly good story for Waterbury and that region,” Stewart said. “So I think we'll be just fine.”
Have questions, comments or tips? Send us a message or get in touch with reporter Henry Epp @TheHenryEpp:
_
