City cuts Vertex tax break after shortfall in jobs
Boston officials are reducing the tax break they agreed to give Vertex Pharmaceuticals for moving to the city by $3 million, or 25 percent, citing a shortfall in the number of jobs the company was supposed to create.
In a letter to the City Council, Mayor Martin J. Walsh said the city is reducing the $12.1 million in tax incentives it agreed to give Vertex to $9 million through fiscal year 2018.
The original amount was conditioned on the company relocating from Cambridge and expanding its workforce at two new buildings on Fan Pier in South Boston’s Seaport District, Walsh said.
“The project has delivered considerable benefits to the city and has served as an important catalyst for the significant growth in the Innovation District,” he said in his letter.
However, Vertex has fallen short of its commitment to bring 1,741 jobs to the site by 430, or about 25 percent, Walsh said.
“We’re committed to the Boston community and committed to continuing to grow the company as we bring new medicines to people living with serious diseases,” Vertex spokeswoman Dawn Kalmar said, noting that since the company entered into the tax incentive agreement in 2011, federal regulators approved its first cystic fibrosis drug the following year and its second last month.
In between those two key approvals, however, Vertex laid off 370 employees, or 15 percent of its global workforce at the time, including 175 people in Massachusetts, Kalmar said.
Seven other companies have similar tax increment financing agreements with the city: New Balance, Digipress, Manulife, Jurys Hotel, J.P. Morgan, Liberty Mutual and LogMeIn. None of them has changed its original agreement, city officials said.