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Lonza not asked for back taxes following decision to close Hopkinton site

By Gareth MacDonald+

19-Aug-2014

Lonza not asked for taxes following decision to close Hopkinton site

Lonza has not been asked to pay back taxes after abandoning plans to expand its biologics plant in Hopkinton, Massachusetts last year.

The Swiss firm announced it would shut down the recombinant protein, DNA therapeutics and vaccines facility in Hopkinton in 2013 as part of a wider cost reduction plan that also saw it cease operations at its site in St Beauzire, France.

The decision reversed a 2007 plan to expand manufacturing capacity at the Hopkinton site that would have seen Lonza construct an additional 63,600 sqft of production space and install new machinery at the site as part of a multimillion dollar investment.

Lonza’s Hopkinton change of heart also saw it lose tax breaks granted to it by the Massachusetts Office of Business Development’s (MOBD) Economic Development Incentive (EDIP) programme.

Tax incentives

Under the 2007 tax increment financing (TIF) agreement Lonza was granted property tax exemptions based on the increased value of the site on the condition that it created 300 new jobs and invested at least $70m.

Lonza announcement that it would halt this expansion, transfer work to its facility in Visp, Switzerland, lay off approximately 200 workers at Hopkinton and eventually close the facility prompted the town to revoke the tax breaks .

Media reports this week suggest that, unlike Stryker Biotech which was forced to shell out $450,000 after breaching a similar agreement, Lonza has not been asked to pay any back taxes.

This was confirmed by a company spokesperson contacted by BioPharma-Reporter.com.

 

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