PROVIDENCE – R.I. Commerce Corp., the state’s economic development agency, on Thursday approved a package of tax reductions and incentives potentially worth more than $9 million for Rubius Therapeutics Inc. to open a pharmaceutical manufacturing plant in Smithfield.
In return, the Cambridge, Mass.-based biotechnology company has pledged to create 160 jobs at the site with a median pay of $55,000 a year. The full-time jobs will be “high-skilled” positions in manufacturing, biotech operations and support functions, officials said.
In addition, Rubius is expected to invest $155 million over five years to renovate a 135,000-square-foot building that would house its new facility.
“This is an exciting opportunity to add more manufacturing jobs in Rhode Island,” said Gov. Gina M. Raimondo, chairwoman of Commerce RI’s board of directors.
The company intends to use the site to aid its work “pioneering development of a new class of medicine utilizing red blood cell therapeutics,” Rubius Chairman David Epstein told the board.
“It’s a completely new technology,” Epstein said, adding that its products are intended to combat cancer, autoimmune disorders and enzyme deficiencies.
Commerce RI’s board voted unanimously to approve the incentives package with little discussion.
After the meeting, Epstein told Providence Business News that Rubius plans to start renovating the Smithfield facility this summer, but he would not disclose the exact location of the site, citing negotiations.
“If all goes according to plan, we’ll take possession [of the site] by the end of July, and we’ll start retrofitting [the facility] after that,” he said.
The company, Epstein added, had considered “many places” for the plant, including those in Rhode Island and Massachusetts, but he would not be more specific.
The incentives package approved Thursday has several parts:
- Up to an estimated $3.71 million from the state Qualified Jobs Incentive Tax Credit. The program will set aside state income taxes taken from Rubius employees at the site and funnel the money back to the company at a rate of up to $7,500 a year for each job created, for up to 10 years.
- Up to an estimated $2.75 million in state Rebuild Rhode Island Tax Credits. The program will allow Rubius to recoup part of its project costs in the form of state tax reductions.
- Up to an estimated $2.7 million in state sales tax exemptions for construction materials and furnishings that the company buys in Rhode Island.
In addition, the deal includes a state Tax Stabilization Incentive agreement that will provide $180,000 to Smithfield.
Despite the tax reductions, officials noted the Rubius project is expected to benefit Rhode Island’s economy.
The operation will increase Rhode Island’s gross domestic product – the output of all goods and services – by $28.1 million a year, according to a third-party economic analysis done to calculate the project’s economic impact.
The study also found the planned facility will generate a net gain in state tax revenue of $6.34 million over 12 years, even when accounting for the company’s tax reductions.
“We are very pleased that Rubius Therapeutics is bringing its new advanced manufacturing facility to Rhode Island,” said R.I. Secretary of Commerce Stefan Pryor, whose department oversees Commerce RI.
“Rubius joins companies such as Amgen, Johnson & Johnson and EpiVax in our flourishing bioscience ecosystem,” he added. “We thank Rubius for choosing Rhode Island and look forward to the company’s success here.”
Officials said the Smithfield site that Rubius has targeted was formerly used to manufacture pharmaceuticals.
Last year, Alexion Pharmaceuticals Inc. closed a similarly sized Smithfield plant that employed about 250 people as part a company restructuring effort. Alexion had previously announced plans to expand in Smithfield.
Scott Blake is a PBN staff writer. He can be reached at Blake@PBN.com.