Pfizer could lose $7 million in tax breaks
St. Louis Business Journal
November 10, 2009
By Kelsey Volkmann
St. Louis County officials are weighing whether to revoke the $7 million in tax breaks promised to Pfizer now that the drug giant is slashing 600 local jobs.
County Executive Charlie Dooley and the St. Louis County Economic Council are looking into 10-year property tax abatement and a sales tax exemption on construction materials granted to Pfizer.
"The commitment was based on 1,000 jobs being maintained out there and they are obviously not going to be doing that," said Denny Coleman, president and chief executive of the St. Louis County Economic Council. "We are reviewing our legal documents and bond documents to see what the requirements were and we will certainly exercise our rights to curtail those incentives and it may be a complete termination."
Ed Bryant, a Pfizer spokesman, said the company, the county and Monsanto, which is buying Pfizer's Chesterfield research facility for $435 million, are in negotiations.
"We are going to cooperate fully with the county and whatever needs to be done to meet our obligation," Bryant said. Pfizer had recently invested nearly $300 million in its Chesterfield facilities.
The state also gave Pfizer $2 million for job training in 2006.
Monsanto may be eligible for additional tax breaks for future growth in Chesterfield but those conversations are just starting, Coleman said.
New York-based Pfizer announced 19,000 job cuts companywide Monday as part of its restructuring following its $68 billion acquisition of Wyeth.
The company is narrowing its 20-plus research centers to five main research sites and nine specialized sites.
Pfizer has been looking to slash costs in anticipation of losing patent protection for its blockbuster cholesterol drug Lipitor in 2011, opening the door for cheaper generic knockoffs and a decline in sales.