Genentech has selected Hillsboro, Ore., as the site for the construction and development of a state-of-the-art biotherapeutic “fill/finish” facility. The company will use the facility for filling and packaging commercial biotechnology therapeutics. The expansion could bring potentially 300 new jobs to the area by 2015.
“Oregon offers an advantageous business environment and its single-sales factor apportionment tax policy is particularly attractive to growing companies like Genentech,” said Patrick Y. Yand, executive vice president for production operations for Genentech. “In addition, Oregon meets our needs for a high-quality available labor force and development-ready land with supporting infrastructure.”
The final stages for approval of the Genentech project are under way, the Governor said. Genentech will pursue tax relief under Washington County’s Strategic Investment Program (SIP). Under SIP, local government assesses property taxes only on the first $25 million of the company’s investment, with exemption threshold increasing three percent every year thereafter. The company would pay a community service fee to participate in the program.
Total state investment in the project would be $4.8 million, including $2 million from the Governor’s Strategic Reserve Fund, which would help the company train Oregon workers and make needed infrastructure improvements for the facility, the Governor explained.
Genenetech would locate its new campus on a state-certified approximately 100-acre site on Shute Road in Hillsboro. The company expects to break ground on the facility in late 2006, with completion in 2008. The facility is expected to be licensed and operational in 2010.
Ranked No. 1 on Fortune magazine’s “100 Best Companies to Work For” in January 2006, South San Francisco-based Genentech employs 9,500 full-time workers, 80 percent of whom have college degrees. More than 20 percent hold advanced degrees.
Reduction of corporate tax burdens under the Strategic Investment Program requires a public process that begins with hearings in Washington County. After gaining county approval, the company’s SIP application then goes to the Oregon Economic and Community Development Commission for state approval.
The Oregon Strategic Investment Program is a tax-equity program the legislature established in 1993 to encourage investment in Oregon by capital-intensive, above-average wage industries. Under the SIP, traded-sector companies who invest heavily in new real and personal property may qualify to pay lower taxes, an incentive that fosters economic growth and improves employment opportunities for Oregonians.
Exceptionally large industrial projects of $25 million or more trigger high annual property tax payments under ordinary circumstances. The Strategic Investment Program provides a financial incentive to companies whose huge investments bring disproportionately heavy property tax obligations.
The Strategic Investment Program enables Oregon to reduce the tax burden for such companies, which helps attract and keep major capital investments in the state. Under SIP, business investment in excess of $100 million is exempt from property taxes. Rural zone investment in excess of $25 million also qualifies for tax relief. The exemption threshold increases by three percent per year, over the term of the agreement.
A company must make annual payments of a community service fee, as mandated by state law, in return for property tax reductions under the Strategic Investment Program.
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