State leaders vow aid to Shire

$40.5m in incentives pledged to keep drug firm's plans on track

Rachel Adomat logs samples for analysis at Shire in Cambridge. The life sciences firm is considering a major expansion in Lexington. (David L. Ryan/Globe Staff/FILE)

Governor Deval L. Patrick and legislative leaders have quietly pledged to give Shire PLC $40.5 million in incentives to persuade the British drug company to push forward with an expansion project in Lexington that would create hundreds of high-paid jobs, The Boston Globe has learned.

In a letter to Shire drafted earlier this month, Patrick, Senate President Therese Murray, and House Speaker Salvatore DiMasi said they were committed to approving legislation by February that would provide tax incentives and other assistance to life sciences companies, including Shire.

"Shire is one of the top life sciences companies in the world and we strongly welcome and encourage its expansion," Patrick wrote in a draft of the letter obtained by the Globe.

Since last summer, Patrick has been lobbying hard for passage of a $1 billion life sciences bill that would include incentives for life sciences companies like Shire. In the meantime, some life sciences companies have pressed the state to make commitments immediately, so they can go forward with construction projects.

Last month, DiMasi suggested the state approve $40 million in interim help for Shire, Genzyme Corp., and a handful of other life sciences companies while Patrick's bill wends its way through the State House. Patrick rejected that idea, saying it's important for lawmakers to approve the entire life sciences bill quickly. Since then, however, DiMasi and Murray have agreed to pass the legislation in some form by mid-February. And state leaders have labored to reach agreements to appease companies that say they can't wait that long.

"Governor Patrick is dedicated to keeping and growing companies like Shire right here in the Commonwealth," said Kofi Jones, a spokeswoman for the governor. "Our commitment to working with Shire is clear and ongoing. We have been in continuous contact with Shire to design a proposal that will ensure their ability to expand in Massachusetts, creating good jobs at good wages."

Murray and DeMasi's offices declined to comment.

The letter to Shire drew fire from a business group that opposes the life sciences legislation.

"It's a precedent we should be very careful with," said John Regan, executive vice president of government affairs for the Associated Industries of Massachusetts.

Regan said he understands Massachusetts faces competition from other states offering incentive packages of their own. But he warned that giving tax breaks to specific companies or industries is "a dangerous road," because it could prompt other companies to wonder why they have not been promised similar help.

"Rather than getting into a bidding war, make the climate such that companies are willing to invest here," Regan said.

Earlier this year, Shire proposed spending $350 million to add 540,000 square feet to its Lexington space. The project would create 680 new jobs, paying an average $100,000 a year, over the next eight years. Shire has already said it is committed to going forward with part of the expansion. But in August, the company publicly threatened to cancel the rest of the project and build elsewhere, unless the state offered a rich enough incentive package. At the time, Shire said it was considering expanding in Maryland, North Carolina, or Rhode Island instead of Massachusetts.

Shire spokesman Matt Cabrey declined to comment on whether the company was satisfied with the state's latest offer. Susan Yanofsky, Lexington's economic development officer, said Shire has continued the process of securing permits for two new buildings - suggesting it plans to go ahead with the $210 million project - but hasn't told the town anything definitive. The town of Lexington already has agreed to give the company $7.6 million in tax breaks over 20 years, which presumably would count toward the $40.5 million. In addition to tax incentives, the state has also promised funding for public roads or other infrastructure related to the project, according to the letter.

Shire became a major force in Massachusetts when it acquired Cambridge-based Transkaryotic Therapies Inc. for $1.6 billion two years ago. As of June, it had 550 employees in Cambridge, up from 390 in 2005. Shire makes several drugs, including Elaprase for Hunter syndrome and Replagal for Fabry disease. As part of the expansion project, the company would move most of its Cambridge operations to Lexington.

Todd Wallack can be reached at twallack@globe.com.