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Drugmaker must repay $120,750 in tax breaks, officials say

Canadian drugmaker Ropack Inc. is selling 155 Commerce

Canadian drugmaker Ropack Inc. is selling 155 Commerce Dr. in Hauppauge, and must pay back $120,750 in tax breaks. The photo is from June 2015. Credit: Newsday / Audrey C. Tiernan

Canadian drug manufacturer Ropack Inc. must repay $120,750 in tax breaks from Suffolk County after deciding to sell one of two buildings it purchased last year, officials said.

The repayment, of savings on mortgage recording taxes, will go to state and local governments, said Anthony J. Catapano, executive director of the county’s Industrial Development Agency, which provided the initial tax incentives.

Statewide, IDAs have been criticized for not pursuing repayment or recapture of tax breaks when companies fail to keep promises to create jobs, make capital investments and remain in the region.

Locally, several IDAs have exercised their clawback provision to recoup tax incentives. In one of the largest cases, the Suffolk IDA in 2013 sought and received repayment of $750,222 in sales taxes owed to the state and county from OSI Pharmaceuticals because the company moved out of state from Farmingdale after receiving help to expand here.

Ropack’s attorney, Daniel S. Dornfeld, said last month the company had decided it doesn’t need 155 Commerce Dr. in Hauppauge and is selling the 107,000-square-foot building to another drugmaker, Evaric Pharmaceutical.

He asked the IDA to waive the repayment, saying Ropack had made many improvements to 155 Commerce and wouldn’t make a profit on its $13 million sale.

IDA officials quickly rejected the request.

Ropack, based in Montreal, will still occupy 49 Mall Dr. in Commack to manufacture, pack and test drugs for pharmaceutical giants. The facility will be the company’s first in the United States.

Ropack is expected to employ 103 people in Commack in two years. They will earn $45,900 per year, on average, records show.

Both 49 Mall Dr. and 155 Commerce Dr. were previously used by Forest Laboratories, which announced in September 2014 that most of its local operation move to New Jersey.

Evaric, the purchaser of 155 Commerce, is a new Long Island company that aims to produce generic drugs for sale to U.S. government programs. The products have been developed by Hetero, a related business in India.

Evaric will receive a discount on mortgage recording taxes for the property, though at $105,000 it is slightly less generous than what Ropack received last year.

Evaric expects to employ 108 people at the facility in five years. Records show they will earn, on average, about $42,600 per year.

IDA officials last week turned down Evaric’s request for an increase of the $1.4 million in tax breaks over 15 years awarded to that business in July.

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