Alexion should be a lesson to Connecticut
That’s a nice sound bite to ride out of town with, but why couldn’t the company achieve its goals here?
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 glass-encased 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.
Connecticut should rethink howit handles its deals with businesses.
Alexion Pharmaceuticals’ headquarters at 100College St. in New Haven.