Chelsea: No hard feelings over Alkermes layoffs
Chelsea City Manager Jay Ash confirmed today that Alkermes Inc. is under no obligation to repay state and local tax breaks it received to build a manufacturing plant in the city, despite Alkermes' plans to shutter the plant and let go 150 workers this week.
Alkermes said it was forced to make the decision after its partner, Eli Lilly & Co., dropped plans to develop an inhalable form of insulin for diabetics (right) -- an alternative to injecting insulin -- that was being manufactured at the site.
In exchange for the decision to build the Chelsea plant, which opened five years ago, Alkermes received a reduction in property taxes from the city. Alkermes also received a break on corporate excise taxes from the state (a standard incentive available to all companies that expand). It's unclear how much money the company saved on taxes.
"The company fulfilled its responsibilities to create and maintain jobs each year it was in operation here," Ash said. "Now that the company is closing its Chelsea facility, the local property tax relief will be withdrawn."
"The state and city invested in a company with promise,'' Ash said. "While that promise has not yet been realized, the investment was a sound one, made after intense review of the company and its potential. Unfortunately, in the world of biotech, not every great idea makes it from the lab and into people's medicine cabinets."
Ash said it's unclear whether Alkermes will continue to lease the Chelsea property, but said the city is interested in continuing to work with Alkermes and other biotech companies to help them find manufacturing space.
"Alkermes took control of a building that had a million dollars of value and a roof caving in," he said. "Since then, they invested more than $20 million in the building, making it a state-of-the-art biotech manufacturing space. Given the quality of the building and its proximity to Cambridge, I would expect there would be a great deal of interest from other biotech companies in the space."
Though Ash said Alkermes' shutdown is a blow to the city's Everett Avenue Urban Renewal District, he said the state is poised to approve a new 250-unit housing development on Sixth Street and a new hotel could be built on Beech Street.
"I'm sorry to hear about Alkermes, but we don't 'put all our eggs in one basket,' " Ash said. "We've made a name for ourselves for being nimble, and therefore act to changes in market conditions, and being innovative, and therefore being able to take advantage of those changing market conditions."
(By Todd Wallack, Globe staff)
