Secrecy surrounds Minn. subsidies for biotech firm

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Associated Press

Posted on April 16, 2013 at 3:06 PM

Updated Tuesday, Apr 16 at 3:06 PM

ST. PAUL, Minn. (AP) — Amid unusual secrecy, top Minnesota lawmakers acknowledged Tuesday that they're trying to get a major pharmaceutical company to add 200 high-paying jobs with incentives anchored by a tax break and a $5 million loan that are both gaining steam at the Capitol.

None of the state's leaders are saying which company would get the subsidies.

The tax break first surfaced Monday as a clause to a 330-page tax plan released by House Democrats. The provision offered a sales tax exemption on construction materials for a biopharmaceutical manufacturing facility that would be located in Brooklyn Park, a Minneapolis suburb. The standalone bill providing the break was held back until Tuesday, which is notable because plans are normally vetted before inclusion in the giant tax packages.

The $5 million loan, which would come in two parts, passed the House with little attention on Monday night as a piece of a broad economic development package. The Minnesota Investment Fund loan is larger than the typical awards.

Asked about the recruitment efforts, Gov. Mark Dayton refused to disclose the name of the company, citing competition from other states for the firm's expansion.

If he did, Dayton said, "they won't be a prospect to come to Minnesota anymore."

House Speaker Paul Thissen and Taxes Committee Chairwoman Ann Lenczewski said they didn't know the identity before moving ahead and pointed to a privacy clause agreed to by the administration. Lenczewski said she first heard of it about a month ago.

Thissen, DFL-Minneapolis, said he and Senate Majority Leader Tom Bakk, DFL-Cook, signed a letter committing to work on the development. Thissen said the venture was known to him only as "Project Fern."

"It's a code name," he said. "Now that it's in the tax bill we'll get more information about it and understand it."

The Department of Employment and Economic Development is spearheading the push, but agency spokesman Blake Chafee would say little.

"DEED is currently pursuing an economic development project that would bring a Fortune 500 company, significant private investment, and good jobs to the state of Minnesota," he said in a written response to inquiries. "The agency is part of a non-disclosure agreement with the company and can provide no further comment at this time."

The business trade newspaper Finance and Commerce reported last month that $14 billion-a-year medical device maker Baxter International had purchased a Brooklyn Park plant.

A spokeswoman for Deerfield, Ill.,-based Baxter didn't immediately return a phone message from The Associated Press. Lobbyists for several other major pharmaceutical companies said their clients were not the potential beneficiary of the legislation.

Documents from the Brooklyn Park Economic Development Authority reference a new buyer for the property that has been home to other biotech companies since 2004. The authority was fashioning city tax breaks to foster a two-phase expansion, which could add $300 million in space and equipment to the property. The city materials say the resulting jobs would average $75,000 in base salary plus benefits.

The state's sales tax break would depend on the company adding at least 190 jobs and making $50 million or more in capital upgrades. It would cost the state treasury nearly $1 million at first.

Neither bill names the company. But both are structured so the help would go only to a firm engaged in biopharmaceuticals or biologics. Those fields involve making prescription drugs or proteins, antibodies, nucleic acids and vaccines.

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