Idexx has announced plans for a $100 million expansion that would bring 500 more jobs to Westbrook. In exchange, the company is asking for tax breaks from the city and state.

The deal could be likened to a prenuptial agreement, which still has to be approved by the Westbrook City Council.

“This cements their relationship with Westbrook,” said Council President Brendan Rielly. “Essentially, Idexx and Westbrook are getting married.”

Idexx Chief Executive Officer Jonathan Ayers said the company signed a purchase and sale agreement last week for the building it now leases in the Five Star Industrial Park on Eisenhower Drive.

“We’re moving from a tenant to a homeowner,” Ayers said. He did not disclose the exact terms of the sale, though he estimated the cost to purchase and renovate the existing building at $40 million.

Idexx purchased the building from its landlord, S.R. Weiner, a Massachusetts retail development company that formerly owned the Maine Mall and has developed the Kohl’s and Shaw’s shopping plaza in Westbrook as well as shopping centers in South Portland, Freeport, Biddeford, Brunswick, Augusta and all throughout New England.

Idexx occupies 350,000 square feet in its building now. The company will add to that space by moving into a 130,000-square-foot space previously occupied by Sanmina SCI in the same building. The space became available after Sanmina announced in 2004 it was closing its Westbrook operations. Idexx plans to dedicate the new space to manufacturing, research and development labs and office space.

Additionally, the company has signed a seven-year lease for a 55,000-square-foot building in the nearby Colonel Westbrook Industrial Park. Idexx Vice President of Worldwide Operations Laurel LaBauve said space would be used as a training center for new employees as well as a customer service call center.

Idexx Laboratories is an international company that develops and manufactures diagnostic, detection and information systems for veterinary, dairy and water testing.

Idexx, which has 40 locations in North America, Europe, Asia and Australia, does the bulk of its research and development in Westbrook. In 2004, it developed a test for mad cow disease that is used throughout Europe, and Gov. John Baldacci recently named the company Maine Exporter of the Year.

The decision to stay in Westbrook ends a long process for Idexx, which has been looking for room to grow for a long time. It also ensures the company will be staying in Westbrook, something that has not always been certain. A little more than five years ago, it appeared the company would be returning to its roots in Portland, only to decide in late 2000 to remain here.

Idexx, which started out on Fore Street in Portland in 1984, moved its corporate headquarters to Westbrook in 1991 when it outgrew its space in Portland. The company, which has been growing rapidly, adding 550 new jobs in the past five years, has been looking to expand for some time.

In 2000, it appeared Westbrook was going to lose Idexx to a new home in Portland’s Bayside area. In November 2000, the company decided to back away from that move, and stay in Westbrook.

David Shaw, who was Idexx’s president and chief executive officer then, told the American Journal at the time that Portland presented an attractive option, but the company ultimately decided a move to Bayside simply wasn’t feasible.

Recognizing the importance of Idexx to the city’s economy, Westbrook officials have been working with the company for quite some time to find a way to help Idexx expand in the city. In 2000, shortly after the company announced it would not be moving to Portland, the city even presented a plan for the company to move downtown to several buildings on and around Main Street. Mayor Bruce Chuluda said the proposal to move the company downtown fell through when Idexx decided it did not want to move downtown, and elected to stay in the industrial park.

Big plans for Westbrook

After hearing the news last week that Idexx would be staying in Westbrook, employees were happy to know the company planned to remain in the city. Chris Lewis, a finance manager who has been with Idexx for eight years, said he was glad to hear the news.

“I think it’s great,” said Lewis, who lives in Gorham. “I am a Maine guy, and from my perspective, this cements Idexx’s commitment to Maine.”

Idexx’s plans for Westbrook stretch beyond the buildings it is occupying on Eisenhower Drive and off Spring Street. Ayers said the company also owns a 12-acre plot of land directly across the street from its headquarters on Eisenhower Drive. He said the company’s future plans for that land, which it purchased in 1997 for $275,000, include potentially building a 150,000-square-foot office building on that site, though he did not have a timetable as to when construction would begin on that project.

In order to ensure Idexx remains in Westbrook, the city is looking to provide the company with a tax break to help it pay for the expansion. Under the 20-year tax increment financing agreement, which still needs to be approved by the City Council, the city will return two-thirds of all property taxes generated from the new investment.

Idexx estimates that its investment will generate approximately $15 million in new taxes over the life of the agreement. Under the terms of the proposed agreement, this means the city would receive $5 million in new taxes and return $10 million to the company.

Westbrook Tax Assessor Elizabeth Sawyer said Idexx now pays the city approximately $1 million between real estate and personal property taxes. Under the tax increment financing agreement being considered by the council, the city would still collect that same amount. The only money returned to Idexx would be from the new taxes.

“This is a great deal for Westbrook taxpayers,” Sawyer said. “It’s a win-win situation for the city.”

Besides the proposed municipal tax break, Idexx will be receiving tax breaks from the state. Westbrook Director of Economic and Community Development Erik Carson said the state and Idexx are still working out the details of the tax breaks.

Carson said the state would likely be providing what is known as an employment tax increment financing agreement. Under that agreement, the state will refund a percentage of the company’s state taxes if the company creates at least 15 new full-time jobs.

“Obviously, they’re going way beyond that,” said Carson.

Carson said other tax breaks being discussed by the state and Idexx include a jobs and investment tax credit, where the state gives a tax break to allow the company to purchase new equipment. Carson said this tax break is based on the creation of at least 100 new jobs, which is well under the 500 new jobs Idexx is proposing to add.

The state is also likely to allow Idexx to tap into a program designed to provide money for employee training. Carson said the program gives companies $800 for every new employee hired, with the money earmarked for employee training and retention programs.

Chuluda said it is important for the city and the state to enter into a partnership with businesses like Idexx. “In today’s world, featuring global markets and the loss of jobs to overseas locations, these kinds of partnerships are necessary, if not essential,” Chuluda said.

Westbrook State Rep. Tim Driscoll said the news of Idexx’s expansion is a shot in the arm, not just for Westbrook, but also for the entire state. “Maine’s new economy is beginning right here in Westbrook,” said Driscoll. “This expansion means that good-paying technical and professional jobs will allow our children to stay and work in Maine, and Westbrook will continue to move forward in a positive business environment.”

Councilors question communication

While Council President Rielly said he supported the tax increment financing agreement, he was critical of the administration for not informing the council about the agreement until the day before it was made public. Since the council is responsible for voting on the agreement, Rielly said the council should have been included in the negotiations with Idexx.

“It’s unfortunate, because the councilors are the ones that have the authority to grant the TIF, not the mayor, not the city administrator and not the economic development person,” he said.

Rielly said he did not want to micromanage the negotiations, he just felt the mayor and administrators should have kept councilors informed as to the progress of discussions between the company and the city. “When this agreement started to take form and was clearly heading towards something that was going to happen, they should have brought the council in,” Rielly said.

Rielly was not the only councilor critical of the administration’s timing. Councilor Michael Foley said he would also have liked the council to be more involved in the talks with Idexx. “I thought that was a quick thing put on us,” he said. “I think they should involve the council in everything they do.”

Foley said he had a problem with the timing of the agreement only. He said he thought the tax break was necessary to keep Idexx here, and in the long run, the city would greatly benefit from having Idexx. “I think it’s a good thing for this community,” he said. “You can’t do business in Maine without things like this.”

City Administrator Jerre Bryant said the administration tried to keep the council apprised of what was going on, but when reports about Idexx’s plans were leaked to the media two weeks ago, the process sped up considerably, and there was no time to let the council know what was going on.

“Under normal circumstances, they would have been updated earlier,” Bryant said. “After the story ran, suddenly the scheduling accelerated very quickly, and we got together with the council as soon as we could.”

Bryant said the city has been holding “exploratory” discussions with Idexx about a possible expansion for some time. But the discussions regarding a possible tax increment financing agreement had only been going on for the past month to six weeks.

The tax break was a significant factor behind Idexx’s decision to stay in Westbrook. Because Idexx is a publicly traded company, Ayers said the company has to make sure it is getting the best deal possible for its shareholders.

“We have an obligation to our shareholders to be competitive,” Ayers said.

Baldacci said Idexx’s decision to stay in Westbrook benefited the entire state. “It’s a great day in the state of Maine,” he said. “It reflects well on all of us and what we’re doing to attract new jobs and businesses here.

Rielly said he wanted to see the city use Idexx as a stepping stone to aggressively attract more businesses to the city, especially other bio-tech businesses similar to Idexx. “If this leads to other businesses coming here, then it’s going to be a great success,” he said.

The 500 new jobs created by the Idexx expansion will be good ones, Ayers said. He estimated the median salary at the company was $50,000, which is 50 percent higher than the state average.

The quality of the workforce in the area was a big selling point to Idexx and Ayers said the jobs created by the company’s expansion would create more opportunities for Mainers. “The workforce we have in Maine is second to none,” he said.

Jack Cashman, commissioner of the state’s department of economic and community development, agreed that Maine’s workforce was a selling point. “People in Maine know how to work for a living,” he said. “The best thing we have going for us is the work force.”

Assistant House Majority Leader Robert Duplessie said he hopes more companies like Idexx will recognize the quality of Maine’s workers and relocate here. “As we create more opportunities for biomedical research and development, we will ensure that companies like Idexx have the human resources available to grow,” Duplessie said. “There is no better work ethic in this country than the people of Maine, and we must continue to ensure that we move with the pace of information and technology.”

Ayers said while he realizes there is some risk in making such a large investment, he is looking forward to Idexx continuing to grow and prosper in Westbrook. “We’re very excited about making this commitment to Westbrook,” he said. “We feel very good about our future here.”

Lewis said he has found Idexx to be a great place to work. “It’s a good company,” he said. “There are a lot of great people here, a lot of good Maine talent. Everyone takes their job seriously and they’re great at it.”

Headquartered in Westbrook since 1991, Idexx employs over 3,000 people in 45 locations in 17 states and 13 countries.

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