Aliyya Swaby Photo
Premature celebration: Alexion HQ ribbon cut in 2016.
Markeshia Ricks Photo
Nemerson, shown at Alexion: New tenants will come.
It took a pharmaceutical company just over 18 months to move its headquarters into a new downtown New Haven tower with promises of up to $52 million of state help — then start packing for Boston.
The company, Alexion, announced Tuesday morning that it is moving its headquarters out of the 14-story, $100 million glass tower that opened at 100 College St. on Feb. 29, 2016. The move, expected to take place by mid-2018, is part of a companywide restructuring that will include a 20 percent reduction in its workforce worldwide.
The company, which produces drugs to treat rare diseases, will continue to do research in the building. But much of it will become vacant. And both the state’s and the city’s efforts to build a biomedical and tech economy here will take a black eye.
The company is still committed to maintaining a research “excellence” center in New Haven despite moving its HQ to Boston, CEO Ludwig Hantson stated in a release.
“Alexion’s 25 year history began in New Haven, and Connecticut remains a critical part of our future. We value our relationship with the state of Connecticut, and our New Haven-based research team is critical to growing and strengthening Alexion’s leadership in complement, which will allow us to fulfill our mission of serving patients and families with rare and ultra-rare diseases,” the release quoted Hantson as saying.
The company stated that 450 jobs will remain here, “Including employees working in the research and process development laboratories, the clinical supply and quality teams, nurse case management and a number of important enterprise business services.”
U.S. Rep. Rosa DeLauro of New Haven called Alexion’s decision “shocking and shameful.”
State economic development chief Catherine Smith issued a statement Tuesday morning announcing that Connecticut will “require” Alexion to pay back a $20 million loan and $6 million grant “with interest and penalties.”
Alexion’s Hanston “acknowledged” in a letter to Smith Monday that it does have “repayment obligations” under the terms of its agreement with the state. Alexion “will be pleased to work with you regarding the repayment process and timing,” Hanston wrote.
“Setbacks like this, though unfortunate, do not deter the department from pursuing smart policies and ventures with growing companies in our state,” Smith stated.
Short-Lived City Success Story
Alexion was born in Science Park in 1992, moved to Cheshire in 2000, then relocated its headquarters into the new downtown building last year after Gov. Dannel P. Malloy’s administration came through with over $50 million as part of its “First Five” program to entice growing companies to stay in the state. Now Alexion follows General Electric, which in 2016 announced its headquarters move to Boston, and Aetna, which announced a move to New York.
Meanwhile, the polls opened at 6 a.m. Tuesday in New Haven for a Democratic primary in which Mayor Toni Harp is seeking to hold onto her seat against a spirited challenge by Marcus Paca in part by pointing to new-economy job growth in town, with Alexion as Exhibit A.
Her economic development administrator, Matthew Nemerson, pointed out that Alexion will continue to have a research presence at 100 College, which theoretically could grow; and that the building, constructed for Alexion by developer Carter Winstanley, will continue to pay $3.8 million a year in local property taxes after they’re fully phased in.
He also expressed confidence in the prospects of finding new tenants for the building’s state-of-the-art lab facilities.
“It’s one of the most spectacular research buildings in the country,” Nemerson said in an interview. “People have been coming and looking at the lab building from around the world. …
“New Haven remains an exceptionally strong place for medical research and discovery.”
Asked if 100 College might be converted in part to market-rate housing, given downtown’s hot market, Nemerson said no, because of the specific nature of lab design.
Alexion
Soliris (eculizumab): Alexion’s controversial drug.
Gov. Malloy returned triumphantly to 100 College St. in August 2016 to proclaim that the company was already exceeding its job-creation goal, adding 500 new positions in the first months after the move. Then troubles started at the company: It laid off 210 workers in March. More troubling, Bloomberg News revealed that Alexion was the focus of multiple investigations in the U.S. and abroad for allegedly shady sales and testing practices. Three top officials, including the CFO, left the company. The CEO left, too.
Suddenly New Haven’s showpiece new-economy employer was sounding a lot like the last shattered homegrown corporate star, Higher One. Gov. Malloy came for a ribbon-cutting of a new state-assisted New Haven headquarters for that company, too, in 2012, before government investigators started revealing alleged fraud; in 2016 the one-time “unicorn” was sold for $37 million. Higher One received more than $20 million in tax credits.
Lessons For Government?
Alexion HQ. For now.
New Haven State Sen. Martin Looney Tuesday called the Alexion news “certainly disappointing.” He said in an interview that the state will need to reexamine the “First Five” agreement with Alexion to see if the state it can recover some of the money it received for the New Haven move.
Looney was asked about deals like Alexion’s, in which government spends millions luring companies which subsequently pick up and leave.
“It’s unfortunately the way things are done,” he said. “States are so anxious for economic development, that companies play one incentive off another. It’s not a healthy pattern.”
“This has nothing to do with the problems” Alexion has endured, Nemerson maintained about Tuesday’s news. “It has to do with [new] CEO living in Boston.”
He noted that GE and Aetna moved their headquarters for the same reasons: the CEOs wanted to base their companies in bigger cities amid more of a tech culture.
Indeed, Tuesday’s Alexion release explained the headquarters move this way: “Boston will provide access to a larger biopharmaceutical talent pool and a variety of life-sciences partners to further support future growth initiatives.”
There’s a lesson for Connecticut, Nemerson argued: To compete with those bigger cities, it must concentrate its tech sector in one or two cities rather than disperse through the state. Cities like New Haven
At the Mayoral debate Harp said that New Haven was the "driving force" of the economy of the State of Connecticut. But the Connecticut economy is going over a cliff. Is New Haven driving Connecticut off the cliff? It is time for the voters to throw these politicians, with the big ribbons, Big Scissors, Big Smiles, and BS out of office.