Alex­ion should be a les­son to Con­necti­cut

New Haven Register (New Haven, CT) - - OPINION -

At least we’re get­ting our money back.

Alex­ion Phar­ma­ceu­ti­cals’ de­ci­sion to leave the city and set up its world head­quar­ters next door in Bos­ton and take 400 jobs with it is shock­ing and sur­pris­ing — and a bit dispir­it­ing.

A big deal was made of the com­pany mov­ing its head­quar­ters to New Haven from Cheshire less than two years ago.

Lud­wig Hant­zon, the com­pany’s chief ex­ec­u­tive of­fi­cer, said the re­lo­ca­tion of its head­quar­ters is part of a larger re­struc­tur­ing that in­cludes lay­ing off 20 per­cent of the com­pany’s world­wide work­force. Alex­ion will leave 450 work­ers at its Col­lege Street of­fices.

But even with that, Alex­ion’s re­lo­cat­ing leaves a bad taste in the mouth.

It seems af­ter the tax­pay­ers of Con­necti­cut gave the com­pany $50 mil­lion un­der the state’s First Five eco­nomic devel­op­ment program in 2012 to shore up its busi­ness, as well as offer the com­pany the tax breaks it needed not to re­lo­cate its com­pany out of the state, the com­pany has de­cided New Haven doesn’t offer what it needs for it to re­main a vi­able com­pany.

It ap­par­ently for­got the state­ment its then-CEO made when first re­lo­cat­ing to the city in 2016: “We think New Haven rep­re­sents the po­ten­tial to be an ideal en­vi­ron­ment to be a vi­brant life sciences city,” said David L. Hal­lal.

The loan to the stock-traded com­pany with a $34 bil­lion mar­ket cap­i­tal­iza­tion in 2016 didn’t sit well with a lot of law­mak­ers, but Gov. Dan­nel P. Mal­loy ar­gued that com­pe­ti­tion was fierce to re­tain com­pa­nies in the biotech mar­ket.

Hant­zon said the re­struc­tur­ing is nec­es­sary to po­si­tion the com­pany for fu­ture growth, re­fo­cus spend­ing and pro­mote growth in share­holder value go­ing for­ward.

That’s a nice sound bite to ride out of town with, but we’re not sure why the com­pany couldn’t achieve its goals here in the Elm City and the Con­sti­tu­tion State.

New Haven was good enough when Alex­ion opened its $100 mil­lion, 14-story glassen­cased of­fice and lab re­search struc­ture at 100 Col­lege St. amid TV cov­er­age and front-page headlines. Con­necti­cut was good enough for Alex­ion when it was shelling over mil­lions and in­cen­tives for the com­pany to stay put when it was con­sid­er­ing re­lo­cat­ing out of state. So what changed? There is some good news. Cather­ine Smith, com­mis­sioner of the state Depart­ment of Eco­nomic and Com­mu­nity Devel­op­ment, said the state’s deal calls for Alex­ion to pay back $20 mil­lion in loans from the state, $6 mil­lion in grant money and $2.1 mil­lion in penal­ties and in­ter­est.

And Don­ald Klep­per-Smith, chief econ­o­mist and di­rec­tor of re­search for New Haven-based DataCore Part­ners, said while Alex­ion’s de­ci­sion is a set­back for New Haven, it is un­likely to have a long-term neg­a­tive im­pact on the city’s econ­omy. We cer­tainly hope not. Alex­ion’s de­par­ture should be a les­son to Con­necti­cut that hand­ing wealthy com­pa­nies mil­lions in low-in­ter­est loans and tax breaks does not guar­an­tee they will stay put.

Con­necti­cut should re­think how it han­dles its deals with busi­nesses.

FILE PHOTO

Alex­ion Phar­ma­ceu­ti­cals’ head­quar­ters at 100 Col­lege St. in New Haven.

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