New Haven will no longer house the headquarters of the pharmaceutical company Alexion, a business with deep roots in New Haven’s Science Park and the state’s pocketbook.
Alexion announced Tuesday morning that the company is relocating its corporate headquarters from New Haven to Boston, in light of a management shake-up and organizational restructuring. The company moved its headquarters back to New Haven in February 2016 after a 16-year stint in Cheshire, with the state pledging up to $52 million in loans, grants and tax breaks. Though the newly announced headquarters will move 400 corporate positions to Boston by mid-2018, New Haven will remain as Alexion’s research center with roughly 450 positions.
“These types of changes are difficult, and we recognize that they have a personal impact on people who have been dedicated to the mission of Alexion,” Alexion CEO Ludwig Hantson said in a press release. “While difficult, these changes were necessary to enable the company to deliver sustainable long-term performance.”
The New Haven Register initially broke the news of Alexion’s departure on Monday night — the eve of this year’s Democratic mayoral primary between Mayor Toni Harp and Marcus Paca. The newspaper featured the story the top of its front page as voters headed to the polls on Tuesday.
Mayor Toni Harp issued a statement about the news on Tuesday, saying the move seemed intended to provide Alexion’s new Boston-based CEO and its worldwide sales force with a full-service airport and other benefits that come from being located in a large city. She reiterated that New Haven would keep Alexion’s research operations and the hundreds of jobs that go with it.
“We’re told New Haven, with its top-tier workforce, will retain most of the company’s research operations and that hundreds of Alexion personnel will continue working at 100 College [St.],” Harp said in the statement.
But Harp’s Election Day message had a more optimistic tone than the one she issued in May, when the insurance giant Aetna announced the relocation of its Hartford-based headquarters. Though Hartford would retain the majority of Aetna’s workforce, just as New Haven will keep many of Alexion’s workers, Harp said in the May statement that the move from the state’s capital was “markedly disconcerting” and signaled “cause for great concern statewide.”
Gov. Dannel Malloy and then-Mayor John DeStefano announced the construction of Alexion’s headquarters in June 2012. At that time, Alexion was set to receive a $20 million loan from the state and a $6 million grant for the construction of laboratory space. In turn, Alexion would deliver between 200 and 300 jobs to New Haven.
For Malloy, the project was supposed to expand his administration’s First Five initiative that would bring large-scale business projects to the state. Alexion’s headquarters at 100 College St. was the cornerstone of the initial phase of DeStefano’s and the city’s Downtown Crossing project, which aimed to urbanize the area currently occupied by Route 34.
Now that Alexion has announced its headquarters’ departure from New Haven, state officials are calling on Alexion to return the $26 million it used in state funds. Catherine Smith, commissioner of the Connecticut Department of Economic and Community Development, said on Tuesday that Alexion must repay the $20 million loan and $6 million grant in addition to interest and penalties. The company has largely signaled that it will meet those requests.
As some Alexion workers leave New Haven and office space opens up at 100 College St. — a 14-story complex with 426,000 square feet of laboratory and office space — Harp said the building will be an attractive space for new tenants who will contribute to New Haven’s bioscience and medical research scene.
Some residents have already speculated that one of those new tenants would be Yale, which originally wanted 110,000 square feet of laboratory space at 100 College St. amounting to more than a quarter of the building. But during negotiations, Alexion wanted to use the entire building, so Yale allowed Alexion to lease all of the space. As a result, Yale found laboratory offices elsewhere, said Vice President for New Haven and State Affairs Bruce Alexander in an email to the News.
Now, the University will only seek space at 100 College St. if one of Yale’s schools requires more room, Alexander ’65 added.
“When Alexion asked for all the space, we satisfied our needs in other buildings in order to accommodate them,” he said. “We would take space in their building now only if there happened to be a current need for it from one of our schools.”
Regardless of which tenant replaces Alexion, some realtors and nonprofit administrators are hopeful that the relocation will not have large enough effects to cause long-term ripples through New Haven’s retail and housing markets. Mark Abraham ’04, executive director of DataHaven, a nonprofit organization focused on collecting and interpreting data for New Haven and other Connecticut cities, believes Alexion’s move may allow another firm to bring workers to 100 College St. more quickly than its previous occupant could have.
“I think [100 College St.] should fill with other workers or firms, possibly even more rapidly than Alexion could have filled it, given the overall trajectory [at Alexion],” Abraham said.
Two blocks away from Alexion’s headquarters, Metro Star Apartments has brought hundreds of apartment-units to the Crown Street area with several new complexes, such as Metro 260, Metro 297, Metro 303 and Metro ARTLab 280 Crown. Developers and nearby retailers in this up-and-coming city block believed Alexion workers would make up a large cohort of tenants and customers, given apartment-unit price points and location.
Chris Fleming, the CEO of Compass Furnished Apartments, which leases units in the Metro ARTLab 280 on Crown Street, said he believes the departure of Alexion’s core workers will not deter the “vibrant business community” developing in the area, he said.
“We’re confident that that community and New Haven will be able to thrive and develop and attract additional business,” Fleming said.
Abraham echoed that opinion, saying he is not concerned about the demand for new apartments in the city, since New Haven’s housing market is constrained and since having 100 fewer jobs in the short term is insignificant on its own.
Still, Alexion follows Aetna, General Electric and Pfizer as companies moving their operations away from the state in the past years, a problem Connecticut has continuously had to deal with.
Abraham attributed the corporate exodus to the lack of a large, international airport operating in the state and expansive talent pools existing elsewhere, such as in New York City, Chicago, Boston and Los Angeles. Republican lawmakers, in turn, have claimed that Connecticut’s income, property and sales tax rates are causing the departures.
Alexion was founded in 1992.