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Teamwork landed Bristol-Myers

Government, business, colleges came together as a sales force

Three months after Rod Jané started running the state's modest Office of Business Development, his phone rang: A major drug company wanted to locate a new factory somewhere in the world, and Massachusetts was on the list of potential sites.

The mystery firm required a huge chunk of land, 80 to 100 acres, and had a voracious appetite for water and power. It would be operating six massive bioreactors and needed to build towers more than 100 feet high. It even had a code name: Project Hummingbird.

And it needed an answer in a week.

Thus began a process that would take eight months, countless meetings, and urgent phone calls from Governor Mitt Romney on down through the ranks of state officials. State House leaders put their weight behind proposed legislation that would allow the company to cash in $33 million in tax credits before it started paying taxes. The town of Harvard, where the factory would be located, agreed to waive its height limit.

This week, the campaign paid off when pharmaceutical giant Bristol-Myers Squibb Co. said it had chosen the Massachusetts site and would sink $660 million into a new factory at the former Fort Devens.

The deal marked the first successful test of a new state effort to stitch government, business, and university leaders together into one sales force to bring new jobs to Massachusetts.

``I don't know if this has ever happened before," said House Speaker Salvatore F. DiMasi, who promised legislative support for the customized tax credit and a $34 million bond issue for infrastructure. ``At least since I've been speaker it hasn't. This was a very unique experience."

The deal still hangs on some final negotiations, including how much rent Bristol-Myers Squibb will pay its landlord, MassDevelopment. Already, however, state officials say that the industry grapevine has been buzzing because of the deal and that they are receiving fresh inquiries from biotechnology and high-tech firms that once avoided Massachusetts.

Bristol-Myers Squibb plans to break ground in September on the manufacturing plant, a high-tech drug-making facility that will create protein drugs, such as the newly approved Orencia for rheumatoid arthritis, by brewing them in vats of living cells. It will eventually employ 550 people, with room for expansion.

The company's decision to build here was welcome news for a state that has experienced a steady manufacturing exodus for more than 20 years. Since July 2000, it has lost one-quarter of its manufacturing jobs, about 105,000.

Jané took charge last July in the Office of Business Development, an eight-person operation reporting to Ranch Kimball, state secretary for economic development, that fielded requests from firms interested in locating or expanding in Massachusetts. Jané began building up a network of development groups, university leaders, and others who could swing into action when the state needed to woo a major corporation.

So by the time his phone rang in October, with a drug company nosing around for good deals, Jané knew whom to call. He sent off the state's response, including a report on its workforce from the University of Massachusetts, and blueprints of potential sites big enough to accommodate the project.

When word came back that the client was interested in Devens, Jané began to assemble the cast needed to pull off the deal.

At a Dec. 1 meeting held at Devens, he showed company executives a PowerPoint presentation extolling Massachusetts's advantages over other states competing for the project.

Thomas M. Finneran, president of the Massachusetts Biotechnology Council, brought executives from the other companies with large drug-making operations in Massachusetts and sent them into a private room with Bristol-Myers Squibb executives to talk about recruiting. On less than a week's notice, a panel of college leaders gathered to describe their bioengineering programs.

The state has courted other firms, but in interviews yesterday participants in the Bristol-Myers Squibb process said the meeting was unprecedented.

In the end, three competitors remained: Rhode Island; New York, where Bristol-Myers Squibb already produces small quantities of biotechnology drugs; and North Carolina, which has emerged as a fierce competitor for biotech jobs.

The governor's office persuaded legislative leaders to agree to a $34 million bond issue that would pay for the company's water, sewer, and power needs. Harvard's Board of Selectmen said it would waive the town's height requirement for the towers the plant needed. Two key sticking points remained: the cost of labor, and what kind of tax incentives the company would get.

To defuse the labor issue, Finneran, Kimball, and two state labor leaders sat down over lunch at the Marliave, the venerable restaurant near the State House, and pitched the deal. The labor leaders said they could work out a proposal with tightly controlled overtime costs and an agreement to prevent strikes or work stoppages.

No one knew exactly what other states were offering for cash incentives, although everyone assumed North Carolina would pay more than Massachusetts for bragging rights to a new drug plant.

In the end, DiMasi said, the governor's office came to him and Senate President Robert E. Travaglini with a proposal. The state already offers a tax credit to companies that build in Massachusetts, letting them take 5 percent of their investment and knock that dollar figure off their tax bill. But Bristol-Myers Squibb would have little or no initial tax burden and wouldn't benefit.

DiMasi and Travaglini agreed to tweak the state law: Starting with this deal, companies making a big enough investment could take the money early, in lieu of a tax break.

``Then we said: `Try to make that the last offer. Don't give them anything else,' " DiMasi said.

Although DiMasi expects some resistance to the idea of cutting a tax deal on behalf of a $50 billion worldwide corporation, he said, ``It's helping us change our image across the county, and I think that's an extremely important investment for us to make."

The Massachusetts Taxpayers Foundation, which frowns on large-scale cash incentives to win new business, said yesterday that it considers the state's package sound.

``It's very different from the kinds of huge giveaways that other states have done," said Michael Widmer, the group's president.

When the decision finally came down, in a phone call Thursday from Bristol-Myers Squibb's chief executive to Romney, the company cited the state's highly-trained workforce and readiness to get a technically demanding plant up and running quickly. It is expected to open in 2009 and produce its first drugs in 2011.

Finneran said that in his political and lobbying career, he hadn't seen any effort on this scale.

``This was really a situation where everyone contributed to this victory," he said.

``I teared up when I called my wife yesterday, I really did," he said. ``And then I had to get off the phone. I had 20 other calls to make."

Stephen Heuser can be reached at sheuser@globe.com.

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