Biotech company moving from Cambridge to South Boston Waterfront

By adamg on Mon, 01/24/2011 - 9:26pm

The Boston Business Journal reports on a win for the Innovation District - Vertex Pharmaceuticals will move to Fan Pier in a couple years so it can consolidate what are now scattered departments into a two adjacent buildings.

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Comments

Just brilliant!

By Stevil on Tue, 01/25/2011 - 8:07am.

And maybe tomorrow the state can give all of Boston's financial services companies and big law firms tax breaks to fold up their tents and move to Cambridge. So we cut $65 million in state aid, but we can afford tens of millions of dollars to give to companies like JP Morgan, Liberty Mutual and now Vertex to create jobs they were going to create anyway (this is contingent on Vertex creating 500 jobs - it's also contingent on approval of a new blockbuster drug - in which case they will literally need 500 people just to count the money).

The person that came up with this one shouldn't just be out of a job - they should be locked up in a a padded room.

State aid?

By Alex_Toth on Tue, 01/25/2011 - 9:43am.

I didn't see any referenced the BBJ story. Sounded more like Vertex just wanted to consolidate their buildings.

The Globe has the details

By adamg on Tue, 01/25/2011 - 9:53am.

From its story today:

State and city leaders are providing Vertex with a substantial tax break and other inducements to help close the deal. Vertex’s lease will require it to pay real estate taxes on the new buildings. Boston will provide Vertex with an $11.8 million reduction in property taxes through 2018.

But even with that reduction, the new buildings will result in $58.1 million in additional tax revenues for the city over that period, Boston officials said.

The state, meanwhile, will provide $10 million in tax breaks in exchange for Vertex creating 500 additional full-time jobs by 2015.

Malarkey

By anon reply on Tue, 01/25/2011 - 9:51am.

Are you nuts? Do you have any idea how many jobs this is going to create in construction and at Vertex? The terms of the state/city aid require Vertex to hire 500 additional workers in Massachusetts. The project itself is going to jump start stalled development on the waterfront and will likely have a knock-on effect in the immediate area.

Would you rather have parking lots and no development and no new jobs for the sake of ideological purity? (The ideology being populist-rage-fueled-by-uninformed-thought, of course.)

Go ahead and shit on JP Morgan, Libety Mutual, law firms and whatever else your commie inclinations tell you are bad (but won't explain to you why). It makes you sound like a fool.

If you had bothered to read the article you would probably know that Vertex had outgrown its Cambridge spaces (10 buildings for one company) and had already sought out Fan Pier for a relocation in 2008/2009. What is wrong with keeping a successful, growing company in the state, indeed, in the same urban area?

Ridiculous.

Because it had already sought

By Cynic on Tue, 01/25/2011 - 9:58am.

Because it had already sought the Fan Pier. It's being handsomely rewarded for taking steps it already wanted to take, and which made good business sense independent of the incentives.

That's the lesson of Evergreen Solar - that while companies are generally eager to extort whatever concessions and incentives they can, they generally choose their locations based on the core logic of their business. Cases in which the incentives are decisive are quite rare.

Vertex is closely tied to the research institutions of Boston. It wasn't threatening to move out of state. This move, in fact, would have made sense without the tax incentives. So why are we paying them to act in their own best interest?

What Cynic Said

By Stevil on Tue, 01/25/2011 - 10:18pm.

They weren't going anywhere. I don't fault the companies - they are just serving their shareholders. I fault the politicians who are sacrificing our tax dollars for their own objectives. Government should make a level playing field for EVERYONE - and get the hell out of the way.

I won't go too far explaining the subtle alchemy of local politics, city finances and Prop 2 1/2 to an anon troll - but if you know how the game is played - this has nothing to do with Liberty Mutual, JP Morgan, Vertex and the rest and everything to do with clueless self serving politicians both in the corner office and on the city council.

Thanks to deals like this and many other fiscal missteps, the piper is coming - and he will not be cheap or kind.

A win for the innovation

By Cynic on Tue, 01/25/2011 - 9:54am.

A win for the innovation district? I'm not interested in winning at this price.

The state is going to spend $50 million on infrastructure to enable a large local company to move from one Massachusetts city to another. How does that make the slightest bit of sense?

Then it's going to kick in $10 million in tax incentives for job creation. The way such credits are supposed to work, to the extent they ever work at all, is that they're supposed to incentivize companies to hire locally as they expand, instead of putting the jobs out of state. But that's not the case here at all. Vertex was not threatening to move its operations; it's far too closely tied to the local research community to be able to do that. Any growth it experiences over the next five years would have come about without the tax credits. The state is simply dipping in to a readily-available pot of funds, and will eventually claim credit for any jobs that follow, even though the $10 million will have had no causal link to Vertex's future growth. If its drugs are approved, it will hire. If they are not, it won't.

Since Vertex wanted to consolidate its operations, it was probably going to move out of Cambridge soon, anyway. I'd rather see it in Boston than in the suburbs. But I suspect Vertex executives felt the same way. There's no real reason to think that any of these incentives were necessary to cinch the deal.

And, to the extent that the Fan Pier required state investment in infrastructure, it ought to have been done up front, and not granted as a favor to a particular firm. We'll never know what other firms might have committed to the site if the state had simply announced it was going to provide the requisite infrastructure.

I understand what's in it for Menino; he can claim that his administration put together the deal that anchored the development. I understand what's in it for Patrick; he can claim that his administration kept the firm in Massachusetts and created five hundred jobs, even though neither claim has the slightest relationship with reality. But what's in it for the common wealth of the Commonwealth?