February 11, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Pfizer is considering expanding in three locations, one in Andover, Mass., one in Grange Castle, Ireland, and the third in Chesterfield, Mo.
Currently, Andover is attempting to work out a possible Tax Increment Financing (TIF) plan to entice the company to expand in the area. Pfizer currently employs about 1,000 people in the area, and the building project is expected to cost around $200 million and add up to 200 jobs.
“You are talking about hundreds (100-200) of additional people,” said Mary O’Donoghue, chairwoman of the Andover Board of Selectmen to the Eagle Tribune. “Even if 10 or 15 of them end up living in Andover, there are economic benefits of people trading and people coming into town on a daily basis.”
TIFs generally offer companies property tax exemptions in hopes that the company’s presence will create jobs, increase property values and improve economic development for the area. The Selectmen have established the TIF, but not many details are included as they negotiate with Pfizer.
“We are always looking to promote economic development, however, it has to make financial sense to learn more about the location and plans for the expansion,” Andrew Flanagan, Andover’s town manager, told the Eagle Tribune.
In July 2015, Pfizer indicated it was expanding its lease agreement with a subsidiary of Massachusetts Institute of Technology, which could create a unified Pfizer campus in Kendall Square, which is in Cambridge, Mass. As part of that expansion, Pfizer will lease 500,000 square feet at 610 Main Street in Kendall Square, which will continue to be research and development space.
Because of the merger between Pfizer and Allergan , quite a bit of restructuring of one sort or another is expected. On Monday, the company announced more details about its restructuring plans and executive team.
Among those plans include the creation of a new operating division, Global Specialty and Consumer Brands. It will be made up of Pfizer’s Consumer Healthcare unit and Allergan’s ophthalmology and aesthetics business, as well as Botox Therapeutic and Cosmetic.
In addition, Pfizer will restructure into two distinct business units, Innovative Products and Established Products. Innovative Products will be made up of Global Innovative Pharmaceutical and the Global Specialty and Consumer Brands. The Established Products business will be made up of the Global Established Pharmaceutical businesses, including all legacy Hospira operations.
In Andover, the Andover Economic Development Council indicated that there are several factors that Pfizer is taking into consideration besides taxes, including finding qualified labor and materials, constructions costs, and the “speed, ease and predictability of project permitting and tax incentives.”
If the deal goes through in Andover, Pfizer is expected to spend $200 million overall, with $50 million for machinery and equipment expansion, and the rest for construction. Andover expects Pfizer’s expanded presence would bring in $3.9 million in property taxes annually, with a total campus tax generation of $6 million.
