©2016 Michigan Economic Development Corporation

Michigan and Kalamazoo Leaders Make Detailed Pitch to Pfizer

Monday, April 14, 2003

Liz Boyd

Aggressive Incentive Package Offered to Retain and Expand Kalamazoo Job

KALAMAZOO – Governor Jennifer M. Granholm announced today that Southwest Michigan community leaders and officials from the Michigan Economic Development Corporation (MEDC) have teamed up to put a full-court press on Pfizer Corporation to retain and expand its soon-to-be acquired Kalamazoo County operations.She also unveiled details of an incentive package designed to keep the pharmaceutical company in Kalamazoo County.

“Community leaders from southwest Michigan and the MEDC have made the case that keeping Pfizer operations and jobs in Kalamazoo County is a slam dunk opportunity for the company and our state,” said Governor Granholm.“We will continue to work with Pfizer to make sure they know that Kalamazoo County is ready, willing, and able to do whatever it takes to keep high-wage, high-skill jobs in this community.”

The Michigan team also unveiled details of an incentive package valued at up to $635 million over a 20-year period based on the company investing $784 million in four expansion projects and creating 2,100 new jobs in the Kalamazoo area.The majority of the incentives offered are only available to Pfizer if it maintains 8,500 jobs in Michigan, including 5,000 in research and development.

Specifically, the incentives were offered to convince Pfizer to build out its existing Kalamazoo facilities.Officials hope to convince Pfizer of the unique assets that the current wholly integrated Pharmacia complexes enjoy, and the partnerships that the community has to offer.

MEDC officials, Southwest Michigan First and City of Kalamazoo leaders recently traveled to Pfizer’s Research and Development headquarters in New London, Connecticut to make a detailed business case to retain and expand the company’s Kalamazoo County operations.

At the meeting, the Michigan group extolled the advantages of the four Pharmacia Kalamazoo County operations to high-level Pfizer executives and specifically discussed state and local incentives that could be offered to the company if it decides to grow in Michigan.

After Pfizer’s acquisition of Pharmacia was announced, the international management and technology-consulting firm Booz Allen Hamilton was asked to provide an independent analysis of the output of Pharmacia’s Kalamazoo County operations, based on publicly available data.The firm found that the Kalamazoo campus is the only Pharmacia site able to take a pharmaceutical compound from the pre-clinical stage to production and distribution. Research also showed that the Kalamazoo operations have issued more patents and approved more new drug applications than any other Pharmacia facility in the United States.

“Booz Allen Hamilton’s conclusion that Kalamazoo is a productive site supports our case as we represent the Kalamazoo community’s interests,” said Barry Broome, CEO and executive director of Southwest Michigan First. “The incentive package our team devised is an unprecedented community effort that positions Kalamazoo on the competitive edge as we seek the opportunity to compete on new business projects at Pfizer.”

The bulk of the incentive package announced today is made up of a new pharmaceutical research and development tax credit and a pharmaceutical Renaissance Zone signed into law last year.The R&D credit provides Single Business Tax Credits against qualified research expenses.The Renaissance Zone provides a virtually tax-free area to help attract a new pharmaceutical investment for up to 20 years.The package also includes local tax abatements and brownfield tax credits.

“I am optimistic with this initial discussion on expansion opportunities for Pfizer’s R&D presence in Kalamazoo,” said Kalamazoo Mayor Robert Jones. “It’ll pave the way for Kalamazoo to present a strong case for its intellectual capital.”

Western Michigan University Interim President Dr. Daniel M. Litynski, also involved in the Pfizer efforts, conveyed the importance of making a strong business case to the company.

“Our community has a rich heritage of pharmaceutical development and provides an environment where creativity and innovation flourish,” said Litynski.“The depth and breadth of the scientific and entrepreneurial talent in our community and the outstanding living environment here have enabled us to continually attract and retain talented people to our region.As a result, our community and our university can offer Pfizer a partnership that promises to be incredibly productive, and we welcome the opportunity to do so.”

Pfizer plans to achieve at least $2.5 billion in savings through the Pharmacia acquisition.The company expects to make decisions on the cost savings shortly after the acquisition is finalized.

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