Bristol-Myers Squibb will close Wallingford facility by early 2018 [NHRegister]

June 26, 2015

New Haven Register

WALLINGFORD >> Bristol-Myers Squibb will close its 982,000-square-foot Wallingford research and development facility by early 2018, the company said in an announcement Thursday morning.

About 100 jobs in the company’s early stage virology operations will be eliminated in Wallingford by the end of this year. Bristol-Myers Squibb will relocate up to 500 workers to another, undisclosed location in Connecticut, which the company has not yet announced.

In addition, roughly 200 Wallingford workers, as well as researchers from Waltham, Massachusetts, and New Jersey will be relocated to a new facility in Cambridge, Massachusetts. About 100 employees now working in Wallingford will be relocated to New Jersey.

With the jobs being eliminated from the Wallingford facility and those workers whose jobs are being relocated, the total impact on the local economy will be a loss of 400 jobs.

Frederick Egenolf, a spokesman for Bristol-Myers Squibb, said the decision to close the Wallingford facility, located on 180 acres, is motivated by two factors.

“We have decided to discontinue our research in the area of early stage virology,” Egenolf said, referring to the study of viruses and viral diseases. “Also, a decision has been made to create hubs in areas of innovation. This will put us closer to business opportunities … and our researchers closer to world-class innovation opportunities.”

Among the jobs that will remain in Connecticut for Bristol-Myers Squibb are positions in regulatory affairs and clinical trials, he said.

Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners, said that every job created in the state’s drug and pharmaceutical sector creates an additional 2.9 jobs elsewhere. Based on the number of jobs leaving the state, that would mean that the state’s economy could see 1,160 jobs lost elsewhere.

“It’s devastating because of the multiplier effect, the number of jobs are created by them being here,” Klepper-Smith said. “These are considered manufacturing jobs and they are the kind of jobs that Connecticut does not want to lose because they create the largest multiplier effect.”

Klepper-Smith said that he believes there are other reasons for the departure of Bristol-Myers Squibb apart from the one Egenolf gave for the company’s decision.

“I think that is the public face they are putting on the decision,” Klepper-Smith said. “I think that the business climate in Connecticut is definitely a factor.”

Devon Puglia, a spokesman for Gov. Dannel P. Malloy, sought to put a positive outlook on the situation with Bristol-Myers Squibb, calling it “isolated, unfortunate news as part of a restructuring,” and insisting that the state’s employment outlook is “moving forward.”

“We’re making progress not just for the next fiscal quarter, but for the next quarter century,” Puglia said. “Unemployment is now at a seven-year low — even lower than New York City’s — as just last month, we created 6,400 jobs. There are dozens of recent success stories that don’t generate headlines about companies expanding operations within or relocating to our state.”

Bristol-Myers Squibb opened its research and development facility on Research Parkway in Wallingford in February 1986, he said. The company owns the property, having purchased it in 1982 from the Travelers Insurance Co., Egenolf said.

The company’s Wallingford facility employs 900 people there, 450 of whom are contractors, Egenolf said. Bristol-Myers Squibb is the town’s largest taxpayer, according to Wallingford Assessor Shelby Jackson. It paid $2.96 million in taxes in 2014 alone.

Jackson said the company will continue to pay taxes on the property, even after it leaves in 2018. What the company’s tax bill looks like in the future depends upon what happens to the property, according to Jackson.

“The fact that they are leaving is going to have an impact on what the assessed value of the property is,” he said. “But vacant properties generally speaking are assessed at a different rate than those that are occupied. Finding another tenant isn’t going to be easy: This is a very specialized property, and it’s going to have a limited number of potential buyers.”

Mayor William Dickinson Jr. said that he “just found out about the company’s plans this morning” and that “nobody from the company or the town’s Economic Development Commission” had given him any indication that Bristol-Myers Squibb was considering closing its facility in town.

“This will have a major impact on the town and our ability to deliver services,” Dickinson said. “In addition to being the town’s largest taxpayer, they are also a big customer of our water and sewer departments. Of course, not all of those people live in Wallingford, so this will have a major impact on the area, as well.”
Dickinson said the company built a power generating facility on its Research Parkway corporate campus several years ago but still purchases some power from the town’s Electric Division.
Joe Mira, the chairman of the town’s Economic Development Commission, said officials in that office had not been contacted by the company about the possibility of the Wallingford location being shut down.

“They have always been a good corporate citizen, but this is the kind of a decision that isn’t made at the local level,” Mira said. “What we’re try to determine right now is whether we will be able to compete for the jobs that will remain in Connecticut.

Egenolf said the company did not contact Connecticut officials before making its decision. He declined to comment why Bristol-Myers Squibb officials elected not to give state or town officials any advanced warning .

The company’s Wallingford facility once housed a workforce of 1,200 people, according to Egenolf. But starting in 2007, he said, Bristol-Myers Squibb has undergone a series of changes that have reduced the number of people who are employed there.

In addition to Malloy, reaction to the news from other Connecticut political leaders was swift.

Senate Minority Leader Len Fasano, (R-East Haven) and Deputy House Republican Leader Vincent Candelora (R-North Branford), who both represent Wallingford, called the news “devastating.”

“People are losing their jobs, and many of those who may have an opportunity to keep them will be moving out of state,” the two state lawmakers said in a statement. “Clearly, economic advantages and disadvantages were considered when the company decided to close down existing locations in favor of a new location.”

U.S. Rep. Rosa DeLauro, D-3, said in a statement she was “deeply troubled” to hear the news.

“This facility’s closure will devastate these workers’ lives and those of their families, while hurting the Town of Wallingford,” DeLauro wrote. “I stand ready to help the affected workers and urge those in need of assistance to contact my office.”

Liz Verna, a principal in Wallingford-based Verna Properties and past-president of the Connecticut Home Builders & Remodelers Association, said Bristol-Myers Squibb’s decision “will have a ripple effect on the state’s housing market.”

“That’s a few hundred more people who won’t be buying new homes or who will be putting their existing homes up for sale,” Verna said. “It’s discouraging for a small business like our, it really is.”