New Jersey officials, including Governor Chris Christie, have cheered Bayer HealthCare Pharmaceuticals' decision to consolidate operations in that state--a move that comes thanks in part to $35 million in grants.
The company says it plans to consolidate its NJ locations in Wayne, Morristown and Montville into one new complex and move its Tarrytown, NY, operation there too. The move will keep 1,000 jobs in the state and add up to 500 more, according to an announcement from Gov. Christie. Bayer says it's considering sites near its current New Jersey locations; however, it hasn't yet decided. One possibility is a former BASF complex of nearly a million square feet in Mount Olive.
However, at least one pundit is wondering if it's worth it. "Pharmaceuticals remain such a terrifically profitable business, it's hard to swallow that New Jersey needed to offer so much to retain Bayer," writes Philly.com columnist Mike Armstrong.
Financial incentives have become the name of the game in pharma plant location and retention decisions. Massachusetts, for example, awarded $24 million in tax breaks to 30 life sciences companies, part of a program that began in 2008. As part of the deal, the companies have committed to creating 1,000 new jobs in The Bay State in 2011.
And it is a commitment, at least in Massachusetts. Companies that come up short are expected to pay back. That's what happened to Genzyme, which was unable to meet its 200-job quota. It paid back $6 million.