Brooklyn Park agrees to tax breaks for Fortune 500 health care business that will renovate a vacant plant on Hwy. 610.
A $1.8 million tax subsidy deal that promises to bring 60 high-paying jobs to Brooklyn Park by 2015 — and 190 by 2023 — gained final approval from the city Tuesday night.
The City Council agreed on a 7-0 vote to give Baxter Healthcare Corp. more than $1.8 million in property tax rebates and tax increment money in return for providing 60 jobs paying $75,000 a year or more, city officials said.
The rebates will come from taxes the company will pay, said Mike Sable, assistant city manager, and the deal requires Baxter to invest $10 million by 2018 in the renovation of a vacant medical products plant that it bought.
If the giant pharmaceutical company provides the 190 high-paying jobs by 2023, it also is eligible to receive more than $10 million in state subsidies, including about $7 million in sales tax rebates on material it uses to renovate the plant, said Blake Chaffee, a spokesman for the state Department of Employment and Economic Development.
Sable said Brooklyn Park’s agreement requires that 60 jobs be in place and the $10 million in renovations be complete before the city gives Baxter any tax subsidies.
Baxter plans to begin adapting the plant this year, said spokeswoman Deborah Spak, from its Deerfield, Ill., headquarters. She said Baxter is still finalizing which medical and pharmaceutical products to make in the plant but is comfortable it will create 60 jobs by 2015.
“Projects of this sort require a strong partnership between the company and the community,” Spak said. “We have consistently demonstrated that partnership in communities in which we operate and look forward to establishing similar relationships in Brooklyn Park.”
Baxter Healthcare is the U.S. subsidiary of Baxter International, a Fortune 500 medical products company based in Deerfield. Baxter paid Genmab, a Danish company, $9.9 million earlier this year for the vacant biotechnology plant.
Baxter obtained legislative approval for the state subsidies while its name remained secret, with the proposal going by the moniker Project Fern during hearings. Gov. Mark Dayton and legislative leaders signed a letter in February offering “Project Fern” about $15 million in state aid that they committed to seek in special legislation. State officials said the secrecy is needed to lure some top companies to the state.
“It’s an exciting development along the 610 corridor,” Sable said. “We are really excited to have a strong partner [in] the state in bringing in this kind of investment.”
However, Phil Krinkie, departing president of the Minnesota Taxpayers League, said the League opposes corporate subsidies because that is “using taxpayer funding to subsidize private business, no matter what terms or conditions or promises are made.”
Mayor Jeff Lunde said he supports the Baxter agreement because it will stimulate spinoff development and spending in the region. “There is no cash up front,” he said. “We are doing a pay-as-you-go scenario for most of the incentive. We go as far as Baxter does and no farther.”
Baxter’s website says the company develops, makes and markets medical devices, pharmaceuticals and biotechnology products to treat people with hemophilia, immune disorders and other chronic and acute medical conditions. Baxter had 2012 sales of $14.2 billion and has approximately 50,800 employees on six continents.
Jim Adams • 612-673-7658
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