The R.I. Life Science Hub was seeded with $45 million in the fiscal 2024 state budget and now the organization is using a big chunk of that money to woo a Massachusetts biotechnology firm to Rhode Island.
Hub Chair Neil D. Steinberg says the group had been quietly negotiating for months with Organogenesis Holdings Inc. to persuade the company to move into the former Rubius Therapeutics site in Smithfield, a 122,507-square-foot building at 100 Technology Way.
To sweeten the pot, the hub’s board of directors authorized to give up to $5 million in funding to Organogenesis, a publicly traded company based in Canton, Mass., that specializes in regenerative technology. That $5 million represents half the money available in the hub’s “business attraction grant” program.
R.I. Commerce Corp.’s board of directors unanimously approved $10 million in Rebuild Rhode Island tax credits, which would require the company to create 103 jobs in Rhode Island over four years.
Steinberg says outlaying $5 million – the biggest grant that the hub is authorized to issue – is worth it for the dividends it could pay in the future.
Successfully courting Organogenesis could be a catalyst for further investment in the state by demonstrating that “Rhode Island is open for business in the life sciences and can make informed, timely decisions when opportunities arise,” he said.
The state tax credit would result in $17 million in forgone state revenue but could increase annual gross domestic product by $30.4 million by 2029, according to an analysis by Appleseed Consulting Inc., which projected direct expenditures to generate approximately $1.2 million in state tax revenues.
Organogenesis wants to sign a 15-year lease with a five-year option by mid-November with the building owner, Boston-based The Davis Cos. The agreement with the hub calls for the company to be given $2.5 million upon signing the lease and another $2.5 million when the company meets its performance metrics.
But it’s still not a done deal. Organogenesis and Davis have made clear they will not proceed unless Smithfield officials approve a property tax stabilization agreement, but at least one town leader hasn’t exactly given his backing.
Town Council Vice President John J. Tassoni Jr. says he was formally informed about the potential deal on Nov. 1, two days after it was reported by Providence Business News. Tassoni said the state pursuing negotiations without informing local officials “is no way to do business.”
But interim Town Manager Robert W. Seltzer said his office was required to sign a nondisclosure agreement. He expects to present a tax agreement to the council in the coming weeks.
Details are still being worked out, but Seltzer said these agreements typically are a property tax freeze for a set term, with annual payments increasing gradually. According to town records, Davis paid $216,000 in taxes in 2023 and is due to pay $227,362 in 2024.
Tassoni said he is open to tax relief if Organogenesis “meets all of the qualifications,” but he also noted the property had had a long and winding history.
Before Rubius, the vacant complex housed since-bankrupt Alpha-Beta Technologies and then Alexion Pharmaceuticals Inc. – each touted as economic development victories that eventually withered.
“[Rubius] was the third big company that bailed out of there and left the town of Smithfield hanging,” Tassoni said. “I am disappointed the state has not included the town in these conversations.”
Seltzer is confident a deal can be reached, bringing economic benefits to Smithfield small businesses.
“It’s a trade-off. But it would be good to see people working there again,” he said. “A facility like that really needs to be running.”
