ALBANY - Long Island biopharmaceutical companies are planning multimillion-dollar expansions that could create more than 500 jobs and pave the way for what experts hope will be a cluster that will attract more firms, jobs and talent to the region.
Six companies that plan to invest $147 million in Long Island and $25 million in New York City will receive state grants and tax credits totaling $13.7 million if they meet investment, job retention and creation goals, the Cuomo administration announced Tuesday.
The companies -- OSI Pharmaceuticals/Astellas, Hi-Tech Pharmacal, LNK International, NBTY, Contract Pharmacal and Forest Laboratories -- are using a combination of state and local economic development assistance to carry out an array of expansion plans. The initiatives, some of which were announced earlier this year, will help the companies retain more than 5,800 jobs and create 544 full-time jobs on Long Island, the administration said.
The projects come at a time when unemployment has swung back up on Long Island, rising to 7.1 percent in June from 6.7 percent in May, according to the state Labor Department. The Island lost 6,800 jobs during the 12 months following June 2010, a 0.5 percent drop, according to the department.
Gov. Andrew M. Cuomo said this marks the sixth time in the past eight months that the state has agreed to a project to boost the pharmaceutical industry on Long Island. Cuomo touted the development as a sign the state's economy is on the upswing.
"The expansion of the biopharmaceutical industry on Long Island will retain and create thousands of jobs for New Yorkers," Cuomo said in a news release.
Most of the aid will come in the form of tax credits under the Excelsior Jobs Program administered by the Empire State Development Corp.
"Since the demise of the defense industry on Long Island in the early '90s, everyone has been talking about biopharmaceutical companies, biotech, as the next logical cluster on Long Island," said Jim Morgo, chairman of the Suffolk County Industrial Development Agency.
Cold Spring Harbor Laboratory and Brookhaven National Laboratory create new technologies, but they don't always stay on Long Island, Morgo said. "You've got this research coming out, but so often the research gets commercialized in other parts of the country. . . . It makes a lot of sense to have [local] commercial enterprises that can produce the products that the research leads you to," he said.
Subsidies are needed on Long Island to create jobs in this industry because companies can locate to less expensive parts of the country, he said.
Biotech companies tend to locate close to one another because it gives them a pool of qualified people to work for them, said Pearl Kamer, chief economist at the Long Island Association and a board member at Broad Hollow Science Park at Farmingdale State College.
"They will be an anchor for fledgling bioscience companies, incubator companies which will in turn grow and generate even more jobs," Kamer said.
The projects are:
OSI Pharmaceuticals/Astellas plans to complete a 40,000-square-foot expansion to its facility at Broad Hollow Science Park. The project will retain 113 existing jobs and create 24 new jobs and can qualify for up to $1.8 million in tax credits. Naoki Okamura, chief executive of OSI/Astellas, said the Farmingdale facility "has become the company's small-molecule oncology research center."
LNK International will be eligible for up to $2 million in tax credits for its $13.5 million investment in new machinery and equipment at its Hauppauge facility that will create a projected 135 jobs.
Hi Tech Pharmacal plans to add 40,000 square feet and 125 new jobs to its Amityville offices and will be eligible for grants totaling $1.5 million. Hi Tech currently employs 275.
NBTY , a vitamin maker, will convert a warehouse in Amityville into a protein-bar manufacturing plant. The project will add 200 jobs to NBTY's current 2,400. The state is providing a $750,000 capital grant.
Contract Pharmacal plans to expand its manufacturing operations of over-the-counter drugs and dietary supplements, retaining 453 jobs and adding 60 over the next five years. It will qualify for $2.6 million in grants and tax credits. The Suffolk County IDA earlier this year announced backing for the project.
Forest Laboratories , also in a move signaled earlier this year, will invest $40 million to consolidate its Suffolk County operations and retain 679 jobs on Long Island. The state is offering $5 million in grants and tax credits. It also received Suffolk County IDA assistance.