Loading...
HomeMy WebLinkAbout2007-10-10 Certified Project ApplicationCertified Project Application -- Page 1 DRAFT For Discussions The Massachusetts Economic Development Incentive Program CERTIFIED PROJECT APPLICATION APPLICANT INFORMATION 1. Name and address of business(es) submitting this application (please list fiscal year end for each business): Shire Human Genetic Therapies, Inc. c/o Shire Pharmaceuticals Inc. 725 Chesterbrook Blvd. Chesterbrook, PA 19087 Fiscal Year End: December 31 2. Name and address of project (if different from above): Shire Human Genetic Therapies Inc. Lexington Technology Park Northeast Corner of Intersection of Route 2 and Route 128 (Inclusive of 125 Spring Street, 200 Patriot Way, 300 Patriot Way, 400 Patriot Way & 500 Patriot Way) Lexington, MA 02421 3. Location of ETA: Lexington, Massachusetts 4. Location of EOA: Lexington Technology Park 5. Authorization: I/We, (print) , of the business(es) applying for Certified Project designation, hereby certify that the information within this application is true and accurate, and reflects the project's intentions for job creation and investment. I/We understand that the information provided within this application shall be binding for the duration of the project certification. DRAFT — For Discussion Purposes Only Certified Project Application -- Page 2 DRAFT For Discussions (Signature) (Date) (Signature) (Date) (Additional Signatures, if necessary) (Date) DRAFT — For Discussion Purposes Only Certified Project Application -- Page 3 DRAFT For Discussions 6. Nature and Purpose of Project: Describe briefly the nature and history of the business as well as the specific expansion /growth /relocation plans: the level of new investment (with a breakdown of type of expense: construction, renovation, acquisition of equipment, etc.) and employment levels -- both current and projected. Provide time frames for both the projected total investment and job creation. As part of this narrative, please explain why the business is seeking Certified Project designation. Company Background: Founded in 1986, Shire Pharmaceuticals (Shire) is a global specialty biopharmaceutical company. Headquartered in Basingstoke, UK, Shire strives to develop and market medicines that improve the quality of life for patients and their caregivers. In 1997, Shire entered the U.S. marketplace, with Chesterbrook, Pennsylvania serving as the company's U.S. headquarters. With an impressive specialty product -line as its foundation, Shire experienced growth rates of 12% for 2006 over the prior year, with annual revenues of approximately $1.8 million. In July 2005, Shire acquired Massachusetts -based Shire Human Genetic Therapies Inc. (Shire HGT), formerly Transkaryotic Therapies, Inc. (TKT). Operating in Cambridge, Massachusetts, Shire HGT maintains expertise in the development of protein therapeutics and the commercialization of therapies for genetic and orphan diseases. From 2003 to 2007, Shire HGT's headcount nearly doubled from 320 to over 500 employees. During this same period, Shire HGT revenues grew from $9.2 million to $142.9 million. Shire HGT currently employs approximately 550 professionals in Massachusetts across all functional areas, including clinical, research and development, manufacturing, administration, and commercial. Project Description: After considering several potential locations, Shire HGT believes the Lexington Technology Park (LTP) to be an optimum location for the establishment of its office, research & development (R &D) and technical operations (manufacturing) campus. Over the next 8 years, this expansion would result in the relocation /retention of over 400 existing Massachusetts (Cambridge) jobs to Lexington while retaining approximately 150 jobs in existing Cambridge facilities. Further the project is projected to create over 600 new Lexington -based jobs, 385 of which will be created through 2009, averaging approximately $100,000 per annum. The total project cost is estimated to be in excess of $350 million, including owner improvements of approximately $70 million. The financial stimulus resulting from this expansion would generate both direct and indirect economic benefits both to the local region and Commonwealth of Massachusetts, including increased support of local businesses, restaurants, hotels and suppliers. Shire HGT's project entails the renovation and occupation of space at 125 Spring Street, 200 Patriot Way, 300 Patriot Way, 400 Patriot Way and 500 Patriot Way. The project includes the construction of two new facilities at the LTP to serve as Buildings DRAFT — For Discussion Purposes Only Certified Project Application --Page 4 DRAFT For Discussions 200 and 400. Building 400 will serve as the location for the company's technical operations (manufacturing) for the development of specialty products. The remaining facilities will be utilized for office and R &D functions. In total, the project would include the overall use of an approximate 550,000 square foot campus. Shire HGT is applying as a Certified Project under the Commonwealth's Economic Development Incentive Program (EDIP) to benefit from the 5% Economic Opportunity Area (EOA) Tax Credit. The company is also seeking a Tax Increment Financing (TIF) Agreement with the Town of Lexington. The incentives provided through the EDIP would enable this project to move forward and allow Shire HGT to reduce its overall project costs. The project is expected to commence in 2007. Job Creation: The following chart details the positions projected to be created by the proposed project, including anticipated payroll over an 8 year period. Up to 550 existing jobs would be retained in Massachusetts, with the creation of over 600 Lexington -based jobs over 8 years. DRAFT — For Discussion Purposes Only Certified Project Application -- Page 5 DRAFT For Discussions Capital Investment: The following chart details the project's proposed capital investment and timeline over a 5 year period. Op erations Technical 2007 2008 2009 2010 2011 (Project Investment) Real Property Investment (Land and $16M $25M $54M $53M $11VI Building) Furniture, Fixtures, & Equipment(FFE) $OM $OM $31VI $1M $1M Manufacturing Machinery & Equipment $OM $OM $9M $13M $4M Lab Equipment ( "experimental" R &D) $OM $OM $2M $21VI $2M ITlnvestment $OM $OM $21VI $11VI $1M Incremental R &D / Office investment $16M $25M $70M $70M $91VI Cumulative R &D /office investment $16M $41M �$111M $181M,- $190M ., DRAFT — For Discussion Purposes Only Certified Project Application -- Page 6 DRAFT For Discussions Justification for Certified Project Designation: Shire HGT's project would retain approximately 550 jobs in the Commonwealth of Massachusetts. Shire HGT estimates the creation of over 600 new full -time positions over 8 years, approximately 385 of which would be crated through 2009. In order to complete the expansion, the company will invest approximately $350 million, including owner improvements of approximately $70 million. The direct and indirect statewide economic benefits are estimated to exceed $2 billion over the project's first 5 years. The Town of Lexington would specifically benefit from the project through incremental property tax revenues generated (estimated in excess of $38 million over the first 20 years, inclusive of a TIF), state - committed funding for required public infrastructure improvements, new job opportunities for Town residents, and annual payments in lieu of tax by Shire HGT to support local initiatives. The EDIP, in existence since 1993, assists companies in reducing costs associated with expansion projects. Certified Project approval is necessary in order for Shire HGT to grow its business while maintaining its competitive standing. Shire HGT's project is in accordance with the mission of the EDIP, which is to assist in the creation and retention jobs in the Commonwealth. In terms of both job creation and capital investment, this proposed expansion rivals, and in most cases exceeds, projects throughout the Commonwealth that have been designated as Certified Projects over the last 15 years. 7. Is this business new to Massachusetts? Yes X No If no: • Where are the existing Massachusetts facilities? Currently, Shire HGT leases approximately 315,000 square feet of space in Cambridge, Massachusetts. 1) 700 Main Street, Cambridge, MA 02139 2) 185 Alewife Brook Parkway, Cambridge, MA 02139 • Will this project require /trigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. No 8. Is this project an expansion of an existing business? X Yes No If yes, check the appropriate box: at existing location at new location in same municipality X at new location in different municipality DRAFT — For Discussion Purposes Only Certified Project Application -- Page 7 DRAFT For Discussions 9. Job Creation In order to qualify for Certified Project Status, the governing statute and regulations require the creation of new, new, permanent full -time employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. 10. Certification for Abandoned Buildings -- Does the proposed project involve the renovation and reuse of an abandoned building? X Yes No Unsure If yes or unused, please answer the following questions: (a) How long has the building been vacant? (If know, state date) Patriot Partners purchased the LTP, including buildings 125, 300 and 500, in December 2002. The tenant at that time, Raytheon, remained in all three buildings until the following dates: - Building 125 (June 2003) - Building 300 (November 2003) - Building 500 (September 2003) Of the three buildings, only Building 300 has been vacant for more than 2 years since it was exited by Raytheon. (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. Since the end of November 2003 to present, 100% of Building 300 has been unoccupied. The LTP Conference Center, 70,000 square feet of which was part of Building 300, was demolished in 2005 through 2006. Building 300 was 260,000 square feet total at the time Raytheon vacated the premises, and now stands at 190,000 square feet. Shire HGT's proposal includes a lease of 100% of Building 300 upon the building's renovation. 11. Local Employment -- What actions will you take to recruit employees from among residents of the ETA? Shire HGT will work with community -based organizations affiliated with the Town of Lexington and the local Workforce Investment Board (WIB), as appropriate and necessary, in order to meet its recruiting and employment needs. DRAFT — For Discussion Purposes Only Certified Project Application --Page 8 DRAFT For Discussions Additionally, as appropriate, Shire HGT will advertise for employment positions through appropriate local media outlets. Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full -time jobs for residents of the municipality /Economic Target Area; and Shire HGT is fully committed to increasing its revenue into the future. Shire HGT's headcount nearly doubled from 320 to over 500 employees from 2003 to 2007, demonstrating the company's growth capacity. By establishing a campus at the LTP, Shire HGT would have the space to pursue its 10 year growth strategy and achieve its job creation projections. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full -time jobs for residents of the municipality /Economic Target Area. This project would result in the creation of over 1,000 new jobs to the local ETA. Shire HGT is working to achieve a leadership position in the development, manufacture and global commercialization of protein therapies for genetic diseases. The company has demonstrated solid employment and revenue growth over recent years, which is anticipated to continue as the project commences in the ETA. 12. Affirmative Action -- Does the business have an Affirmative Action /Equal Employment Opportunity Plan or Statement? X Yes No See attached. If no, describe the business' hiring policies and practices. 13. Agreement Between the Business and Area Banks -- Describe briefly the business' local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business' deposits to fund loans to local businesses? Shire currently has relationships with US based banks including: • Bank of America which participates in the Massachusetts Capital Access Program, • Citi Bank DRAFT — For Discussion Purposes Only Certified Project Application -- Page 9 DRAFT For Discussions • US bank • Wachovia 14. Economic Benefits of Project Certification -- Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. For example, describe the anticipated state and local tax benefits, municipal road or infrastructure improvements, assistance for local job training programs, the impact of local permit streamlining and other benefits anticipated if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e., reduction of blight, reuse of abandoned buildings, clean up of contaminated property, job training, provision of day care, any contributions to the community etc.) likely to accrue to the area as a result of Certified Project designation. Due to the significant investment by Shire HGT in terms of both job creation and capital expenditures the Town of Lexington, Middlesex County and the Commonwealth of Massachusetts all stand to gain significant economic and fiscal benefits from this project. Specifically, the total economic output at the state level generated during the first 5 years of the project, including the construction period, is estimated to exceed $2 billion. Additionally, over $780 million in economic output is anticipated to be generated in indirect activities other than the direct operation of the Shire HGT campus. With respect to employment, Shire would retain approximately 550 employees in the Commonwealth, while creating over 600 new positions over the next 8 years. It is estimated that these employment levels may generate up to $40 million of state personal income tax through 2014. Additionally, the following benefits relate specifically to the ETA: - An estimated $38 million of incremental property tax revenue, inclusive of an agreed upon TIF, to the Town of Lexington over the next 20 years through the construction, renovation and occupation of the LTP, inclusive of an agreed upon TIF; - State - committed public infrastructure funding for intersections in need of improvements to sustain higher traffic volumes; - Multi -year $400,000 worth of contributions by Shire HGT to the Town of Lexington to support the local library and educational -based initiatives; and - Over 1,000 new direct jobs in the Town of Lexington, creating employment opportunities for residents of the ETA and additional economic activity for local construction suppliers, vendors, and retail establishments. Shire HGT's expansion to Lexington would put the ETA in the best position to benefit from the investment through the following economic benefits: - Localized direct spending impacts; DRAFT — For Discussion Purposes Only Certified Project Application -- Page 10 DRAFT For Discussions Localized indirect spending impacts; Localized job creation; and Taxes generated from property placed in service. Shire HGT's commitment to corporate citizenship would assist the company in maintaining its reputation as a world -class specialty biopharmaceutical organization. Shire HGT's participation with charitable and local organizations, including donations, sponsorships, and support of employee volunteerism, would enable the company to focus on enhancing the lives of children and families through the products it creates and its connection with the local community. SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS 1. Will the business own or lease /rent the facility? X Own X Lease /Rent If leasing /renting, please identify the developer /landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. Patriot Partners 141 Spring Street Lexington, MA 02421 -7860 If owning, will the business fully occupy the space? Yes X No If no, does the business intend to lease /rent the remaining space? While Shire HGT expects to ultimately occupy all of the space within the LTP, it is considering the potential to lease a portion of the space, provided that the term of years for any such lease will not interfere with Shire HGT's ability to use all space as needed. 2. Describe how the various tax benefits and other economic incentives that will result from Certified Project designation will be allocated among the business(es) developing the project (i.e., a developer or landlord) and the business(es) intending to purchase, lease or rent space at the facility (i.e., tenant or tenants). The benefits of the TIF and EOA Credit will be utilized by Shire HGT. SUPPLEMENTAL INFORMATION 1. Name(s) of the business(es) intending to take advantage of the state tax incentives: Business Name: Shire HGT DRAFT — For Discussion Purposes Only Certified Project Application --Pagel 1 DRAFT For Discussions Federal Employer Identification #: 04- 3027191 Address: c/o 725 Chesterbrook Blvd. Phone: 484 - 595 -8550 Fax: 484 - 595 -8154 Contact Person: Dan Ostien Type of Organization (check all which applies): X Corporation X For - Profit S -Corp Business Trust Partnership General Partnership Individual Non - profit Limited Partnership Level of Interest: X 5% Investment Tax Credit X 10% Abandoned Building Tax Deduction (if applicable) X Local real estate tax incentive beneficiary 2nd Business Name (if applicable): Federal Employer Identification #: Address: Phone: Fax: Contact Person: Type of Organization (check all which applies): Corporation For - Profit S -Corp Non - profit Business Trust Partnership General Partnership Limited Partnership Individual Level of Interest: 5% Investment Tax Credit 10% Abandoned Building Tax Deduction (if applicable) Local real estate tax incentive beneficiary * * *If there are more than two businesses intending to take advantage of these state tax incentives associated with this project, please provide the above information for all such businesses. 2. A -- If a corporation, please list the names and addresses of the officers and directors of said corporation, and any person and /or corporation with a financial interest of five percent or greater in said corporation. Board of Directors DRAFT — For Discussion Purposes Only Certified Project Application -- Page 12 DRAFT For Discussions Dr. James Cavanaugh, Chairman Matthew Emmens, Chief Executive Officer Angus Russell, Chief Financial Officer and Executive Vice President, Global Finance Robin Buchanan, Non - Executive Director The Honorable James Grant, P.C, C.M, Q.C, Non - Executive Director David Kappler, Non - Executive Member Patrick Langlois, Non - Executive Member Dr. Jeffrey Leiden, Non - Executive Member Kate Nealon, Non - Executive Member Dr. Barry Price, Non - Executive Member Ronald Nordmann, Non - Executive Member Executive Management — Corporate Responsibility Committee Matthew Emmens, Chief Executive Officer Angus Russell, Chief Financial Officer and Executive Vice President, Global Finance Tom Anderson, Vice President, US Commercial Operations Wayne Eppinger, Vice President, Global Procurement Services Leonard Fasullo, Senior Director, Global Environmental Health and Safety Dr. Jo Ferdinando, Senior Vice President Global Pharmaceutical Sciences and R &D Projects Operations John Freeman, Managing Director, Commercial Anita Graham, Chief Administrative Officer Marianne Mortara, Human Resources Director Jessica Mann, Senior Vice President, Global Corporate Communications David Reese, Senior Director, Corporate Facilities and Real Estate Management Sylvia Gregoire, President, Shire Human Genetic Therapies Caroline West, Senior Vice President, Chief Compliance and Risk Officer Theresa Heggie, Vice President and General Manager, Shire HGT Europe B -- If a partnership, please list the names and addresses of all partners, and include the proportionate share owned by each partner. C -- If a business trust, please name all members and beneficiaries of said trust. 3. Please provide the name, address, phone number and contact person for any organizations which may own or control the applicant organization, or who are affiliated with the applicant business organization. Shire Plc Matthew Emmens, Chief Executive Officer Hampshire International Business Park Chineham Basingstoke Hampshire DRAFT — For Discussion Purposes Only Certified Project Application -- Page 13 DRAFT For Discussions RG24 8EP UK Tel: +44 1256 894 000 Fax: +44 1256 894 708 Shire Pharmaceuticals Ltd John Freeman, Managing Director Hampshire International Business Park Chineham Basingstoke Hampshire RG24 8EP UK Tel: +44 1256 894 000 Fax: +44 1256 894 708 4. Certificate of Good Standing -- Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a Certificate of Good Standing, please see Attachment I of this application. XXX — Shire DRAFT — For Discussion Purposes Only