Jackson Labs can count UConn profs and contractors as employees

In return for $291 million in state subsidies courtesy of Gov. Dannel Malloy, the Jackson Laboratory must create 300 jobs – but taxpayers will pay the salaries for 10 of those employees.

According to the funding agreement that governs the relationship between Jax and Connecticut Innovations – Connecticut’s government-run venture capital firm, up to 10 University of Connecticut Health Center employees working at Jax’s Farmington lab will count toward the Maine nonprofit’s job-creation goal.

Jax will use the state funding to build the Jackson Laboratory for Genomic Medicine where it will begin a new line of research in personalized medicine. In conjunction with the lab subsidies, the state is also investing $864 million in a health center project called Bioscience Connecticut.

The UCHC employees also count toward the requirement that Jax pay its average employee at least 125 percent of the average Connecticut salary. The target is currently about $72,000.

Jax will also get credit for independent contractors and employees of “vendors, contractors, joint venture partners or licensees” who live in Connecticut and work at the Farmington lab.

Part-time employees count for partial credit. Employees must work for six months out of the year to be counted.

Over 20 years, the state will subsidize Jax by about $42,000 per job per year.

Included in the subsidy are $99 million in grants over the next decade. If the state fails to make the payments, Jax no longer has to meet its job creation requirements.

Connecticut will share in some of the revenues from research at the lab, but during the first decade Jax has the option to ask for some of the money back if amounts to a “windfall.”

At least 90 of the Jax employees will be “senior scientists,” or researchers with advanced degrees. Jax must also ensure at least 30 percent of its employees are senior scientists once employment exceeds 300.

Jax recently announced Dr. Yijun Ruan will be the Connecticut lab’s first researcher.

The lab has to give Connecticut residents preference when hiring, “except for professional scientific staff positions requiring a doctoral degree, postdoctoral training positions, and graduate student positions.”

“This policy means that when two candidates are otherwise equally qualified, Jax will give preference to the candidate who is a Connecticut resident,” the agreement says.

The lab also has to purchase from Connecticut vendors “to the extent it is cost-effective, schedule appropriate and scientifically sound.”

The state subsidy for Jax includes a $145 million facility loan and a $46.7 million furniture, fixtures and equipment loan, both at 1 percent deferred interest and forgivable after 10 years.

The funding agreement commits the state to providing $99 million in grants to Jax over the next decade. If the state fails to provide the grant at any time, all state loans to Jax are automatically forgiven.

The grant can be reduced if Jax fails to meet certain benchmarks.

Connecticut will share in proceeds from the lab’s intellectual property for 25 years. Each year, the state will get 10 percent of the first $3 million and half of revenue above $3 million.

Jax budgets for $1 million in royalties over its first 10 years of operation, which would entitle the state to $100,000. The application for funding does not include royalty projections beyond the first decade.

If Jax fails to meet certain benchmarks during its first 10 years of operation, the state can increase its share of the first $3 million in proceeds to 15 percent until Jax meets its goals.

If the royalties exceed the amount budgeted in the first decade, Jax has the option to ask for the state to return part of its share of the proceeds.

“If, during the first ten years of this Agreement, CI recognizes a windfall amount of money from the payment by Jax to CI of the Reinvestment Amount as computed pursuant to Section 12.2 hereof, upon a request from Jax, CI shall consider but shall not be obligated to remit a portion of such windfall amount to Jax,” the agreement says.

Connecticut Innovations has the right of first refusal to invest in projects that commercialize Jax intellectual property during the 25-year period.

After the loans are forgiven, if Jax decides to leave its Farmington facility, the state can purchase it at a discount. During the first year, the state gets a 75 percent discount. In the second year the state gets a 50 percent discount and then a 25 percent discount. In the fourth year, the state can buy the facility at fair value.

After 14 years, Jax can make a tidy profit on selling the facility since the state paid to build it.

If Jax falls short on job creation, but has created at least 225 jobs in 10 years, it can lease the Farmington facility for five years with an option for a five-year renewal.

zombie_woof says:

Mandating paid sick leave does burden small businesses that are having a difficult time making ends meet- especially in this economic climate. Interesting that you should characterize my statement as a lie and not as a misunderstanding of the facts. I am human and will make the occasional error- forgive me for I am not employed by the news media. Having endured an extended period of unemployment myself I can attest to the difficulty in finding work- I hardly coasted while collecting unemployment as my full time job during that period was to find permanent work and reestablish an income. The time available to research the opinions I was hearing was (and is) limited and as well I’m stuck with sources that one side or another will find reason to indict the credibility of.

Technically we’re at a rhetorical standoff… but I’m choosing to dignify your response out of appreciation of the time it took for you to create it- though I must say that the nature of your wording suggests that you are looking to draw me into some sort of flame war. Most people do not like being called liars and I’m no exception to that but I’m inclined to hesitate engaging in the type of exchange that such a retort tends to precipitate and as well to wonder why one would choose to reply as you did. Is it an indication that you feel that your argument is so weak that you have little recourse than to attempt to draw me into a verbal fistfight and effectively give my own credibility a black eye? Frankly, being a “regular Joe” I have no real credibility but I do have a presumed right to state my opinions- even if those views ultimately prove to be incorrect.

I certainly have no proof of your agenda as I haven’t the ability to get inside your head and speak for your motivations but I am moved to comment on the impression that your word choice creates. I do not know that you’re not an accomplished political insider or member of the press but if you are then in a sense your response will have a bolstering effect to the credibility of what you’re attacking to a thinking mind if that is all you have… but I absolutely must digress. My original post about burdensome mandates was inspired by what I heard on a radio talk show hosted by a former governor- having been a defendant himself. Researching recent tax legislation and mandates, I could only find one bit of data to support specific acts that burden small businesses in particular beyond the punitive tax structure we’re forced to try to exist in..

As to the credibility of what we all hear on the radio and television and read in the newspaper- my only comment is that the mainstream news media is corporate owned and as legal “individuals”, corporations are afforded the same freedom of speech that us people supposedly enjoy- though a corporate voice being exercised is analogous to using a megaphone to drown out our individual voices… which themselves seem to be purposefully kept at odds through a choreographed opinion mill that is kept in motion by the likes of Sean Hannity, Rush Limbaugh, Rachel Maddow, Keith Olbermann, as well as others. Adding to this perception, an acquaintance who did freelance work for a local newspaper that is privately owned by Newhouse Newspapers and whose editorial stance is “conservative” told of a corporate memo that was circulated to the paper a couple months ahead of the ’04 elections mandating that no major news about the wars in Iraq or Afghanistan were to hit the front page- at the cost of editorial careers if they did- this until after the election. This confirmed to me long held suspicions that our news media is hardly objective and furnishes news items that are propagandized in a manner to cultivate certain opinions, mind sets, and to foster a premise that the perceived societal ills that are perpetrated by the sum total of local and national news items can only be addressed by the incremental intrusion of an ever expanding bureaucracy- and both sides of the aisle stand to gain from that.

Di I deliberately lie when I bring an opinion here? no; but I do not hold my own opinions to be above reproach because I’m limited to sources with a credibility made questionable by the agenda that the nature of the “news” coverage reflects, and when I’m accused of being a liar it is likely expected that I’m bereft of the ability to defend myself that I’ll be drawn into something that would do in the value of anything I might contribute from that point on. which suggests that those who would resort to such tactics are aware that their own argument is weak leaving them with little choice but to draw me into something that I would lose simply by my participation.

To the point, the deal with Jackson Labs amounts to another case of corporate welfare and in the tax environment it is taking place reflects further contempt that the governor has for us suckers who are stuck with him at least until the next gubernatorial election cycle.

I humbly apologize if my theories are not correct. Again, I’m appreciative of the time and effort it took for you to reply.

Dave Johnson says:

Additional burdens on small businesses? That’s a lie and your anti-union petticoat is showing. The permanent underclass is the product of corporate piracy.

That said, $42,000/job subsidies? Beyond the pale.

Anonymous says:

It’s just more smoke and mirrors political games on the part of the Malloy administration who have effectively acted against actual job creation by making a point of burdening small businesses in this state with mandates and higher taxes. It seems as though he’s trying to create union jobs by killing non union business. Watch for private sector employment to drop. I’ve been out of work for six months and I see no relief any time soon. We’re effectively being governed by what may as well be criminals bent on concealing a permanent underclass without acting constructively to mitigate the situation creating the lack of employment.

Are you kidding me? says:

Is this a joke? Surely Connecticut didn’t promise to subsidize $42,000 PER JOB PER YEAR, and then allow those “jobs” to be people overseas and government employees we are already paying for. That would be quite literally the stupidest thing the General Assembly could do.