Tax break to help science firm expand

Kalamazoo Gazette
Sunday, October 21, 2007
Kathy Jessup

A pair of former Pfizer medicinal chemists who decided to stay in Kalamazoo after their work was relocated in 2003 are receiving property-tax breaks to help their start-up company survive and grow here. The Kalamazoo City Commission has approved an initial, six-year, 50 percent property tax abatement for a new, $3.2 million, 20,000-square-foot research-and-development facility in Western Michigan University's Business Technology and Research Park. It will house expanding pharmaceutical research conducted by Kalexsyn, the business name for Kalamazoo Experts in Synthesis. In addition, the city OK'd abating property taxes on an expected $814,482 in personal property -- including furnishings and equipment -- attached to that project. In the first year, the combined abatements are expected to save the company about $70,000 in property taxes. However, the new construction also means $55,000 of additional tax revenue will be collected from the project. City officials said the move is a good investment in new economic development, adding five new chemists making an average of $75,000 a year. Kalexsyn officials say they have taken advantage of the outsourcing trend in pharmaceutical research, with nearly all of the firm's $2.8 million in 2006 sales coming from out-of-state contracts. About a quarter of Kalexsyn's work is from outside the U.S. Company founders Robert C. Gadwood and David C. Zimmermann have been operating the firm in 7,000 square feet of space in the Southwest Michigan Innovation Center, a new-business incubator. This year, Kalexsyn outgrew that after a 180 percent boost in sales over the past four years. The company currently employs 23 people, including 15 chemists.