New York City has been long-linked to its financial ties and it appears the state and local governments have committed to diversifying industries in a significant way. For years the state has seen young biotech and life science companies leave the Empire State for more established environments found in Boston or San Francisco. This flight pattern may soon be halted, thanks to some serious funding commitments.
During the month of December various government officials in New York pledged to commit over $1 billion to the development of the biotech and life sciences industry within New York. This directly rivals the $1 billion in funding Massachusetts announced in 2007; $650 million of which has been invested or committed already. New York Governor Andrew Cuomo unveiled a plan known as “LifeSci NYC” which pledges $650 million in funding for young life science companies to fully develop within New York while the New York City Economic Development Corp. has released a $500 million 10-year commitment to biotech within New York City. The New York City Economic Development Corp.’s plan hopes to create 16,000 new jobs within the New York City area and will be funded over a 10 year stretch, with much of the funding being released in the form of tax credits for the development of wet lab space within the city.
While the recent funding announcements are a significant step, they certainly aren’t the first major move made within the state of New York. The last 10 years in New York have shown developments such as the opening of The Alexandria Center for Life Sciences in New York City which houses powerhouse companies such as Pfizer Inc., Roche Holding AG, and Eli Lilly. An array of incubators, accelerators, and co-working spaces have also popped up including Audubon Business and Technology Center, Blueprint Heath’s next program, Entrepreneurship Lab Bio and Health Tech NYC, Harlem bio space, numerous WeWork locations, the list goes on and on. Venture Capital firms have also taken notice, with large investments made into the city through their collaboration and partnership with academia, government and the private sector.
While changes of this magnitude will take a while to come to fruition, it should certainly serve as a warning to cities such as Boston and San Francisco that competition will be increasing. Much of the benefits companies are attracted to in Massachusetts are the large availability of labs and funding. If New York is able to effectively provide companies with these tools, companies may begin to stay put in the Empire State or move there.
With Massachusetts’s 10-year plan phasing out in 2018, it is certainly time to consider the next step. Will companies that began or moved here leave to take advantage of what New York now has to offer? Will another Massachusetts life sciences initiative be on the heels of this 10-year plan? Only time will tell if Massachusetts will continue to wear the crown as the industry hub in the coming of years.
To learn more about these government-sponsored tax incentives and how they may benefit your biotech or life sciences company, please contact firstname.lastname@example.org.
Author: Robert Traester, CPA
To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.