The City Council on Monday unanimously ratified a 10-year, $1.5 million economic incentive agreement with medical equipment-maker Illumina, which will keep 300 manufacturing and sales employees in San Diego.
Illumina, which makes devices for genetic analysis, was recently named the “Smartest Company in the World” by the Massachusetts Institute of Technology.
“These types of economic development agreements are exactly the tools that San Diego needs to attract and retain companies such as Illumina, which employ hundreds of workers in middle-class and high-wage jobs,” Councilwoman Sherri Lightner said. “If we can be a poster child for the state to recruit jobs here, so be it – sounds wonderful.”
The company, which also has manufacturing facilities in Hayward and Singapore, was considering expanding elsewhere, including to nearby Poway and to Memphis, Tennessee, according to the mayor.
A city report says real estate costs would have been lower for Illumina in Poway.
The company, the 12th-largest provider of sales and use tax revenue to the city, will receive a $1.5 million city credit, which includes a 3 percent annual boost, in exchange for keeping its workers in San Diego for the next decade.
Company executives claimed Memphis was offering incentives to move. Councilman Mark Kersey said he heard that Memphis made an “aggressive” offer.
The rebate amount equals 70 percent of new Illumina-generated sales tax revenue for the city and 100 percent of use tax income above current levels, according to the report.
The company leases a half-dozen buildings in San Diego totaling about 560,000 square feet, and has more than 1,000 employees. The average annual salary for the jobs being retained is $63,100, said Almis Udrys of the mayor’s office.
Council members enthusiastically approved similar agreements with craft brewers Ballast Point and AleSmith last month. Udrys said no other deals are currently in the pipeline, however.
“We’re always on the hunt,” Udrys said.
City officials are employing such agreements for companies that are in San Diego’s base industrial sectors like manufacturing and tourism, are major tax revenue contributors and provide a “living” wage to employees.
– City News Service
