Drug firm eyes expansion

An international pharmaceutical company is eyeing Lexington as its new center of operations for genetic therapies, promising hundreds of high-paying jobs and a $394 million investment over the next four years.

But Shire Pharmaceuticals is not looking to shoulder the burden of expansion alone. Representatives for the drug firm have their sights set on a multimillion-dollar tax benefit package from Beacon Hill and a tax increment financing, or TIF, agreement from the town.

It would be the first time such a deal would be granted in Lexington, and local officials are carefully weighing their options.

Shire representatives presented the ambitious plan to the Lexington Board of Selectmen last week.

The publicly traded company, founded in the United Kingdom in 1986, researches and manufactures drugs across the globe. The division of Shire that is looking to expand to Lexington is Human Genetic Therapies, which researches treatments of rare genetic diseases. Specifically, the Lexington plant would produce at least two drugs: Elaprase, which treats Hunter syndrome, and Replagal, which is used to treat Fabry disease.

Shire currently has four sites in Cambridge, but is quickly outgrowing those locations, said Matthew Cabrey, spokesman for Shire.

Cabrey said although Shire considered four states for an expansion site, Lexington is ideal, given the current industrial park configuration, the town's educated workforce, and proximity to routes 2 and 128.

"We are in the latter stages of our due diligence process and really zeroing in on Lexington," said Cabrey. "After conversations with local and state officials, we feel that negotiations are headed in the right direction. Shire is proud to call Massachusetts home and we expect to continue to call Massachusetts home."

The company already leases one building in the Lexington Technology Park, 125 Spring St., which is part of the former Raytheon and Nitromed facility. If tax incentives are approved, Shire would build two more buildings totaling 370,000 square feet in the park. The company would keep its Alewife manufacturing site in Cambridge as a backup for drug production and sublease its three other Cambridge sites.

The usual concerns about noise, traffic, and zoning should not be issues given the site is in an industrial park off two highways, according to Cabrey. Trucking traffic would also be at a minimum because medicines are manufactured in bulk and finished elsewhere.

"We see this expansion as a tremendous opportunity for Shire, Lexington, and the Commonwealth of Massachusetts to establish a long-term partnership," said Cabrey.

Pat Sacco, the company's facilities and engineering operations manager, estimates the expansion could mean the creation of 680 new full-time jobs in Lexington by 2015, while keeping the 550 existing full-time in Cambridge. Average salary, Sacco said, would be around $100,000.

Shire projects it will spend $250 million to modify existing and construct new buildings, and $144 million on capital equipment, property infrastructure, and building mechanical systems.

The new buildings could take advantage of a TIF agreement, which gives tax breaks for redevelopment of an area. In order to be eligible for such an agreement, businesses must add jobs to the Massachusetts economy and build new facilities that increase the value of the space to the town.

Town Manager Carl Valente said Lexington has already initiated the application process for a TIF pact with the state, but ultimately it will be Town Meeting that decides whether Shire will be given a break at the local level. Valente said town officials worry that if they give the TIF to Shire, other businesses will demand it. They also hope that another business may be interested in the site and not require a tax break, Valente said.

"Our goal has been to build the commercial tax base, but the question is if we need a TIF to be competitive with a Bedford, Burlington, or Waltham. We need to ask the question if we need a TIF to encourage business to come to Lexington," said Valente. "This decision will set a precedent, and it needs to be weighed carefully."

On the state level, Shire officials say they are interested in taking up Governor Deval Patrick on his proposal to invest $1 billion in Massachusetts Life Science Initiative, which would bring more biotech jobs to the state. Shire is also seeking funding through the Massachusetts Opportunity Relocation and Expansion Programs and the Massachusetts Economic Develop Incentive Program.

Jeanne Krieger, chairwoman of the Lexington Board of Selectmen, told the Shire representatives Monday night that she is confident a deal could be reached that would benefit all parties.

"We would very much like to reduce the dependency on residential property tax," said Krieger. "This is a partnership we would very much like to pursue."

Lexington officials expect to reach a decision by the end of the summer as to whether a TIF agreement should be awarded to Shire.

Company officials said they hope to have an agreement with state leaders in a month.

Melissa Beecher can be reached at mbeecher@globe.com.