The city will award an economic development incentive grant to Xellia Pharmaceuticals to expand its manufacturing plant on Capital Boulevard in North Raleigh.
The grant requires Xellia to create 40 permanent full-time jobs with an average annual salary of $45,000 to $70,000 in the next five years as well as maintain 90 existing jobs.
The company also must make a new property tax investment of at least $100 million.
The value of the grant was not specified; it will depend on how much Xellia pays in property taxes. The company will receive a payment worth 50 percent of the paid property taxes annually for five years.
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City councilman John Odom, who represents northeast Raleigh, said the incentive ensures the area maintains high-quality jobs, but he’s skeptical of the use of incentives.
“It will be a good thing because they’re keeping the jobs up here,” he said. “But I will tell you, I’m not an incentive guy. I don’t like to do them if we don’t have to.”
The city is weighing the development of a formal economic incentive policy similar to what other Triangle governments have.
The city previously has awarded similar incentive grants to Citrix and Red Hat that were based on job creation or capital investments.
“This is in line with the others,” said James Sauls, economic development director for the city.
Red Hat, for example, must meet targets for the number of jobs in its downtown headquarters in order to receive a payment of $100,000 annually for 10 years.
Citrix was required to both meet job targets and make a $20 million investment in its downtown building. Its payment from the city also is based on a percentage of its taxes for 12 years.
Xellia specializes in the development and manufacturing of anti-infective products.
The Danish company acquired the North Raleigh plant from Fresenius Kabi, a German health care company, in July. The plant is located on Capital Boulevard just north of Thornton Road.
The plant is Xellia’s first U.S. manufacturing facility. It will expand the company’s manufacturing capacity for injectable pharmaceuticals.
“We are very pleased to be able to use this incentive to expand the site and to attract the most talented and productive employees to grow the team here further,” Xellia CEO Carl-Åke Carlsson, said in a news release.
The city council approved the incentive grant in closed session Aug. 5. Officials announced it Tuesday.
The city council’s Budget and Economic Development Committee is expected to discuss the development of an incentives policy at a Sept. 9 meeting.