Endo Pharmaceuticals officially broke ground Tuesday afternoon on a new headquarters in Malvern. (Don't tell anyone, but the foundation is already down.)
If anybody was unsure about the appeal of boring-but-important infrastructure to business, Endo chief executive officer Dave Holveck made it clear at Tuesday afternoon's ceremony.
"The turnpike exit was absolutely critical," Holveck said during an interview after the speeches, including that of Pennsylvania Gov. Tom Corbett.
Within walking distance, a new interchange will connect the Pennsylvania Turnpike to Route 29 and will be the first in the state to be all electronic with on- and off-ramps going in both directions. Drivers will need to use EZ Pass.
The current construction cost estimate is $50 million, with a few million more going into the design, according to Turnpike Commission spokesman Bill Capone. Tolls and other state money is paying for the project, except for the Atwater Business Park land, which was donated by the developers, Trammell Crow Co. and CB Richard Ellis Realty Trust.
An interchange there has been discussed since the 1980s, according to Capone, but ground wasn't broken until early 2011 and the hope is that it will be completed by November of this year. Endo is planning to move from its current home in Chadds Ford, Delaware County, into its new complex in December.
"For the logistics and for what we need in health care talent, more of which is in Chester, Montgomery, Bucks and Mercer County in New Jersey, being right off the turnpike was a big deal from our standpoint." Holveck said.
Endo had $1.9 billion in revenue through the first three quarters of 2011, but it will also get a $1.25 million package from the state's Department of Community and Economic Development. Press secretary Steve Kratz said the Governor's Action Team offered a $750,000 Opportunity Grant and $462,000 in job creation tax credits.
Kratz said the deal requires Endo to retain the 575 employees it has in the state and create 154 new jobs within three years. The company roster will be audited each year to see if it is fulfilling that part of the bargain, with a company executive having to sign off on the audit. Kratz said Endo has accepted the offer, but not yet submitted the paperwork for the money. After the paperwork is completed, the job-creation clock starts.
IMC Construction is making the two five-story buildings, connected by walkways, which will have 300,000 square feet of space. Endo said in a filing with the Securities and Exchange Commission that it signed a 12-year lease with three renewal options, each for an additional 60 months. Endo can add up to about 150,000 square feet through the first four years. The monthly rent for the initial year will be $466,250, and will increase by 2.25% each subsequent year.
After fielding several questions about the beleaguered Chester Upland School District and its financial woes, Corbett was asked why it made sense for the state to give Endo money, albeit with strings attached, if it is only moving within the state.
"It makes sense to keep them in Pennsylvania and to grow the jobs in Pennsylvania," Corbett said. "They had an opportunity to go other places. Across the country, states compete with each other. We compete with Maryland and the states adjoining us."