Biotech Firm Moving Its Base to Billerica
Financing, Tax Help Lure Firm Into Town
July 1, 2010 : The Boston Globe, by John Laidler
A drug manufacturer plans to build a 70,000-square-foot plant and corporate headquarters in Billerica with a combination of federal, state, and local financing assistance and tax breaks.
Pharmalucence, which makes eight generic drugs used in disease diagnosis, will relocate to Billerica once it completes the project, which is expected to create 150 construction jobs and 25 to 30 permanent new jobs on top of the company's existing 75 jobs.
The biotech company, which also contracts with other businesses to make their products, currently occupies 45,000 square feet of leased space in a four-building complex in Bedford.
The construction, a complete overhaul of a vacant Dunham Road building, is expected to begin in August and take 15 to 18 months. The company, which is investing $30 million in the project, including the $2.8 million it spent recently to acquire the site — anticipates up to another year to secure federal approvals, making late 2012 or early 2013 the target date for the facility to begin operation.
â€œWe're pretty excited,'' said Glenn Alto, president and CEO of Pharmalucence, which was founded in 2007 in a management buyout by three senior managers — one of them Alto — of a previous firm that had operated at the Bedford site since 1985.
In addition to housing its production facility and offices, the new building will provide space for laboratories, warehousing, and packaging.
The project is the first to benefit from the state's Recovery Zone Bond program, established last fall.
The 2009 federal stimulus law authorized two new types of bonds to boost local economic development: Recovery Zone Facility Bonds, which are federally authorized tax-free bonds that help businesses with building and equipment projects, and Recovery Zone Economic Development Bonds, which help fund local public projects that spur growth.
Both types of bonds benefit recipients through lower borrowing costs. With facility bonds, the costs are reduced because the bonds are tax free for investors.
Massachusetts was allotted $556 million for the two programs. Both types of bonds can only be used in economically distressed â€œrecovery'' areas. The state designated all its existing â€œEconomic Target Areas'' — which include Billerica — as recovery areas.
For the Pharmalucence project, a $20 million facility bond was issued on the company's behalf by MassDevelopment, the state's finance and development authority, and purchased by TD Bank.
â€œWe are thrilled to see Pharmalucence become the first project to officially move forward with the help of the new Recovery Zone Bond program. This means shovels in the ground, new construction and permanent jobs, and support for our state's vital industries,'' Kofi Jones, spokeswoman for the state's Executive Office of Housing and Economic Development, said by e-mail.
The help the firm received through the bonding program was â€œcritical,'' Alto said. â€œWe would not have been able to do this project without it.''
Also crucial to the project, he said, was the tax increment financing agreement the firm reached with the town. The deal, approved by Town Meeting in May, exempts the company for 13 years from a portion of the increased property taxes for the site resulting from its investment.
Richard Scanlon, Billerica's chief assessor, said the deal will save the company about $785,772 in taxes over the 13 years, but the town in those years will gain about $3.5 million in tax revenues from the project.
As a result of the local tax deal, the firm was also poised this week to be awarded a 6 percent state investment tax credit. Bill Waters, chief financial officer and a cofounder of Pharmalucence, said that the tax benefit, awaiting approval by a state board yesterday, would save the firm $1.8 million in state taxes.
© Copyright 2010 The Boston Globe.