Nationwide Children’s Hospital officials said they hope their plans for a new gene-therapy manufacturing company will be bolstered by a tax break.
At a Columbus City Schools Board of Education meeting Jan. 21, they made the case for a 15-year, 100% abatement for Andelyn Biosciences, a new, for-profit subsidiary.
The abatement would exempt the company from paying an estimated $1.3 million that would be owed annually to Columbus City Schools. The 15-year total would be about $19.7 million.
New revenue from property taxes and income taxes shared with the city, meanwhile, is projected to total about $4.7 million during that 15-year period, and they still would be collected.
Mary Kay Irwin, the hospital’s school health-services director, and Libbey Hoang, its vice president of planning and business development, highlighted the hospital’s ongoing free programs in Columbus schools, including school-based health centers, asthma therapy, preventive-health initiatives for teens and behavioral-health services.
Hospital officials have agreed to expand such student services if the tax abatement is approved, Irwin said.
They currently operate the programs at a net loss of $3.2 million, she said. The pledged expanded services would increase that amount to $3.5 million, she said.
“Our partnership is strong, and we’re making a difference in children’s lives together,” Hoang said.
Columbus school board members are expected to vote on the tax deal at their meeting Tuesday, Feb. 4.
Before it’s official, however, the abatement also would require Columbus City Council approval.
The plan is for Andelyn’s permanent home to be built on Ohio State University’s West Campus.
If construction were to start this year, the 100,000-square-foot, $64 million facility would open in 2023, hospital officials said. The company would launch in the hospital’s Abigail Wexner Research Institute this summer.
The goal is to manufacture gene-therapy products for the biotechnology and pharmaceutical industries, focusing on so-called “orphan treatments” for rare conditions that aren’t profitable for large pharmaceutical companies.
Andelyn would not produce products – and as a result, it would not generate income – for about five years, despite having a payroll. That is why the abatement is necessary, Hoang said.
“It’s a risk, but we feel it’s necessary to get some of these rare disorders to commercial treatment,” she said.
When fully functional, Andelyn would employ more than 200 people, with an average annual salary of $77,000. More than half of those jobs could be filled with an associate’s degree.
Board members emphasized the need to recruit locally.
“What’s important to me is that residents of Columbus, the parents of our students, are the ones that are getting the jobs,” said James Ragland, a school board member. “We have a tremendous poverty issue within Columbus City Schools.”
Because Nationwide Children’s Hospital is a nonprofit, it doesn’t pay taxes on its other properties. The land on which it wants to build Andelyn is exempt from taxes because it is owned by Ohio State.
The Columbus City Schools teachers union has opposed tax abatements for wealthy businesses, which harm the district by diverting funds away from students, its members have said. Abatements were a major issue during contract negotiations last year.
Columbus Education Association president John Coneglio said the union’s stance always has been that abatements should go to companies that actually need them.
“I don’t think Nationwide Children’s Hospital would be making a spinoff, for-profit company if it thought it was going to lose money,” Coneglio said.