State, City Make Intense Pitch to Pfizer

The Michigan team also unveiled details of an incentive package valued at upto $635 million over a 20-year period based on the company investing $784million in four expansion projects and creating 2,100 new jobs in theKalamazoo area. The majority of the incentives offered are only available toPfizer if it maintains 8,500 jobs in Michigan, including 5,000 in researchand development.

Specifically, the incentives were offered to convince Pfizer to build outits existing Kalamazoo facilities. Officials hope to convince Pfizer of theunique assets that the current wholly integrated Pharmacia complexes enjoy,and the partnerships that the community has to offer.

MEDC officials, Southwest Michigan First and City of Kalamazoo leadersrecently traveled to Pfizer's Research and Development headquarters in NewLondon, CT, to make a detailed business case to retain and expandthe company's Kalamazoo County operations.At the meeting, the Michigan group extolled the advantages of the fourPharmacia Kalamazoo County operations to high-level Pfizer executives andspecifically discussed state and local incentives that could be offered tothe company if it decides to grow in Michigan.

After Pfizer's acquisition of Pharmacia was announced, the internationalmanagement and technology-consulting firm Booz Allen Hamilton was asked toprovide an independent analysis of the output of Pharmacia's KalamazooCounty operations, based on publicdata. The firm found that the Kalamazoo campus is the only Pharmacia site able to take a pharmaceutical compound from the pre-clinical stage to production and distribution, said Michigan officials. Research also showed that the Kalamazoo operations have issued more patentsand approved more new drug applications than any other Pharmacia facility inthe United States, the Michigan officials said.

"Booz Allen Hamilton's conclusion that Kalamazoo is a productive sitesupports our case as we represent the Kalamazoo community's interests," saidBarry Broome, CEO and executive director of Southwest Michigan First. "Theincentive package our team devised is an unprecedented community effort thatpositions Kalamazoo on the competitive edge as we seek the opportunity tocompete on new business projects at Pfizer."

The bulk of the incentive package announced today is made up of a newpharmaceutical research and development tax credit and a pharmaceuticalRenaissance Zone signed into law last year. The R&D credit provides SingleBusiness Tax Credits against qualified research expenses. The RenaissanceZone provides a virtually tax-free area to help attract a new pharmaceuticalinvestment for up to 20 years. The package also includes local taxabatements and brownfield tax credits.

Pfizer plans to achieve at least $2.5 billion in savings through thePharmacia acquisition. The company expects to make decisions on the costsavings shortly after the acquisition is finalized.