CORRECTION: A previous version of this story misstated that the incentives were required to bring in $3.9 million in payroll tax. This was not accurate. The relevant lines have been edited. We apologize for the error. –LINK nky editorial, July 10, 2024.
The Covington Board of Commissioners heard a presentation on development incentives with an LLC subsidiary to biotech company Thermo Fisher Scientific, PPD Global Central Labs, at their meeting Tuesday night. The incentive agreement was placed on the consent agenda for next week’s meeting, meaning it will likely pass.
The agreement was for job creation incentives at a 146,000-square-foot industrial building behind the Latonia Commerce Center on Winston Avenue.
Located on West 38th Street, the building was the first industrial facility to come to Covington in decades.
Local developer CovCor, whose principal is Josh Niederhelman, agreed to build the facility on-spec (i.e., without any pre-established tenants) last year after the city commission approved an $18 million industrial revenue bond agreement. Last June, the City of Covington, along with CovCor, hosted a ground-breaking ceremony for the project, the construction of which carried a price tag of $17.6 million.
Thermo Fischer was unveiled as the facility’s first tenant last month, along with a set of state-based development incentives. The company will move its sample management and biorepository operations into a 65,000-square-foot space within the building. In addition, the company also plans to expand its Highland Heights-based central laboratory operation, bringing over some of the positions from Highland Heights in the process.
“[CovCor] were looking to Thermo Fisher because they needed to expand,” said Covington’s Business Attraction Manager Susan Smith to the Latonia Business Association on Monday.
Smith gave a brief overview of the city’s efforts to attract a business to the site at the meeting in Latonia. She also gave the presentation about the incentives at Tuesday’s meeting. At Monday’s meeting, she said that she had been working with Niederhelman on finding a tenant since last fall.
“Here it is, like BOOM, not long after it was built there is a big tenant that needs this type of space,” Smith went on to say on Monday, expressing the city’s feeling of vindication in investing in the facility, even though it was built on spec.
The incentives that came before the commission on Tuesday were meant to match the incentives offered by the state as mandated by law.
The company has been operating in Highland Heights since 2002. The city expects to add 252 jobs to Covington as a result of the development, 118 of which will be preexisting jobs pulled from Highland Heights and 134 of which will be newly created. Only 69 of those potential new jobs (created over 10 years) will be eligible for incentives, and the people employed must be Kentucky residents. Thermo Fisher’s business at the industrial center represents a capital investment of $47.8 million, and the average salary of the jobs brought to the new facility, according to Smith’s presentation, will be $72,384 plus benefits.
The incentive is performance-based, so the company gets nothing if it fails to create said jobs and draw in at least $3.9 million in payroll. The number of jobs required for the incentive is based on a graduated scale over its 10-year lifespan. If the company meets the benchmarks, it gets a reimbursement equal to 1% of the city’s 2.45% payroll tax rate. Exact figures are broken down in the table below.
Mayor Joe Meyer said he was pleased that the company had decided to come to Latonia, where he grew up.
“Fisher Scientific is a life sciences company that will invest $48 million and bring 250 jobs to Latonia with a salary of more than $72,000 each,” he told the Latonia Business Association on Monday.
On Tuesday, the other commissioners were in favor of the incentive, describing it as “wonderful” and “fantastic.”
“It will be a terrific expansion and addition to Latonia,” said Meyer on Tuesday. “We think it will do really, really well out there.”
Representatives from Thermo Fisher attended Tuesday’s meeting but declined to comment, directing LINK nky to the company’s dedicated communications team.
“Our central lab plays a vital role in helping our customers make timely, efficient and informed decisions about their clinical trials and ensure patient safety,” Thermo Fisher Scientific Analytical Services Division said in a press release following the announcement of the state incentives. “Our expansion will enhance their ability to advance life-changing research. We are excited to expand into Covington and grow our operations in Highland Heights as a vital part of our global labs capabilities serving our customers.”
Kenton Hornbeck also contributed reporting to this story.