Updated July 28, 2016 9:11 PM
By James T. Madore firstname.lastname@example.org
Two buildings in Suffolk County will be home to about 200 new jobs in the next five years — double what had been expected — because one drugmaker is selling one of the structures to another drugmaker, officials said yesterday.
The $13.3 million sale of 155 Commerce Dr. in Hauppauge to Evaric Pharmaceutical also means the building’s current owner, Ropack Inc., will have to repay some tax breaks that it received last year from the county’s Industrial Development Agency, officials said.
Evaric is a new company that aims to produce generic drugs for sale to U.S. government programs, said Vasu Sabbella, the company’s chief financial officer. He said the products have been developed by a related business in India, Hetero.
Evaric is owned by Dr. BPS Reddy, who also serves as CEO and founder of Hetero. The Indian company has operations around the globe that employ 15,000 workers, Sabbella said.
He said Reddy isn’t new to Long Island.
Hetero owns part of Ascent Pharmaceutcials Inc., a maker of generic drugs, in Central Islip. And last year Reddy and his partners sold nearby InvaGen Pharmaceuticals to another Indian drugmaker, Cipla Inc.
Yesterday, Evaric received $1.4 million in tax breaks from the IDA, including $1.2 million off property tax bills for 15 years or a 29 percent reduction.
Sabbella thanked the IDA board for its support but asked that it increase the tax savings to match those that Reddy’s businesses received from the Islip Town IDA. He also said Reddy had considered launching Evaric in New Jersey, where he has had a business since 2007.
In its application for IDA assistance, Evaric said it would have 108 workers in five years — once the 107,000-square-foot plant receives U.S. Food and Drug Administration approval. Records show the employees, on average, will earn about $42,600 per year.
Evaric expects to report an annual profit of $8.9 million by 2022 on sales of $60 million, according to the application.
Separately yesterday, the IDA considered a request from Montreal-based Ropack to keep all of the $328,125 mortgage-recording tax reduction that it has already received.
The Canadian company purchased 155 Commerce Dr. and 49 Mall Dr. in Commack last year. Both had once been home to drugmaker Forest Laboratories before it moved to New Jersey.
Ropack had expected to use both buildings for manufacturing, packing and testing drugs for pharmaceutical giants. However, Ropack’s attorney, Daniel S. Dornfeld, told the IDA it only needs 49 Mall Dr.
Dornfeld said the sale of 155 Commerce Dr. would not impact Ropack’s previous promise to create about 100 jobs in the county. He also said the company had made improvements to 155 Commerce Dr. and wouldn’t make a profit on its sale.
Dornfeld asked the IDA to waive a required repayment of mortgage-recording tax savings on Ropack’s purchase of 155 Commerce Dr.
In an interview, IDA executive director Anthony J. Catapano said Ropack would have to repay some of the tax savings. “We are going to recapture [the savings], but the amount has not been determined,” he said. “The requested waiver is off the table.”
The IDA granted the building’s new owner, Evaric, a $105,000 reduction in the mortgage recording tax.