By the time the company paid back a
The loan and grant money came as part of the state's First Five agreement with Alexion, which called for up to
The state included Alexion in the program in return for the company agreeing to relocate from
First Five was an economic development program created by the administration of then-Gov.
The First Five deal called for a 10-year term on the loan of
Watson said Alexion has paid back the state's loan and grant. The company also paid nearly
Alexion, however, which continues to have a research presence in
“Those were earned and not recoverable per the terms of the contract,” Watson said, referring to the legal agreements state officials signed with the company when it became part of the First Five program in 2012.
The tax credits are structured in such a way that any company receiving them can't use them for three years, he said. There is a 10-year-window for the tax credits to be used, according to Watson.
“It requires the company receiving the credits to make the investment up front,” Watson said. “It's a very unique tool for us to have.”
Even with Alexion relocating its headquarters to
“Additional details on these terms remain confidential,” she said.
And what did Alexion do to earn the tax credits it received? Watson said that assessment was based on meeting certain goals over two time periods:
“Given the total increase in employment and the construction costs for those periods resulted in positive net income to the state, they were awarded the credits,” Watson said.
During those two time periods, DECD issued
“What you want to do is not simply let (them) cut their taxes,” Carstensen said of tax credit deals with companies. “You want them to do something to prompt an investment in
Carstensen said one example of positive use of tax credits was the 2014 deal reached between
The deal committed UTC's
In return for those and other commitments, the state gave UTC tax credits of up to
“They view it as losing revenue rather than seeing the potential it has to grow the economy,” he said.
“There has to be accountability and the potential for long-term economic growth and the problem here was that relationship (with Alexion) was short-lived,” Klepper-Smith said.
Even though DECD was able to recover more money than it invested in Alexion, Klepper-Smith said the First Five program has done little to improve the overall economic health of
“You need to be able to increase incentives for all business, not just a few,” he said.
Carstensen said regardless of whether state officials structured Alexion's First Five incentive package correctly,
“Because of the business they're in (developing drugs for treating debilitating diseases that afflict small numbers of patients), Alexion wanted to be someplace where there are a lot of health care facilities,” he said. “
Also, current business trends have companies looking to locate in large, urban centers and
Since Alexion moved its headquarters,
Under state law, nonprofit educational institutions are exempt from paying property tax, but in Yale's lease at
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