Gov. Easley Announces Novartis to Build in Holly Springs 07/18/06

The pharmaceutical giant Novartis will build a manufacturing facility in Holly Springs employing approximately 350 to produce flu vaccines using new technologies, Gov. Mike Easley announced Tuesday.

The manufacturing facility will go on 167 acres in Holly Springs Business Park off N.C. 55 Bypass. Construction will begin in early 2007, with the first phase scheduled for completion by late 2008. Easley said Novartis' investment would be at least $267 million and eventually could reach $600 million.

Novartis' selection of Holly Springs “sends a signal across the country” that North Carolina is primed for biotech industry growth, Easley said.

Town Manager Carl Dean said Tuesday was a historic day for Holly Springs, which has grown from fewer than 1,000 people in 1990 to more than 18,000.

“It is a tremendous milestone in the development of Holly Springs,” he said.

Dr. Joerg Reinhardt, CEO of the new Novartis Vaccines & Diagnostics division, said the company evaluated more than 15 sites across the United States before choosing Holly Springs. He cited factors including availability of infrastructure, a well-trained and educated workforce, and quality of life.

“All of these aspects, at the end of the day, gave the highest scores to North Carolina and Holly Springs,” he said.

Novartis intends to fill most jobs locally and will start recruiting for key positions next year. Additional jobs are envisioned in subsequent construction phases. The average salary will be approximately $49,000.

The company was created in 1996 through the merger of Ciba-Geigy and Sandoz. This year, it ranked second on the pharmaceutical industries list of Fortune Magazine's Most Admired Companies.

Town officials said Novartis would be an excellent corporate partner.

The competition for the manufacturing facility, with its promise of hundreds of jobs and millions in tax revenue, involved several states, was hard fought. Novartis' selection of the town followed an intensive two-year effort by Holly Springs with assistance from state and county agencies.

“It doesn't happen by accident,” said Jennifer Mizelle, the Town's Economic Development director.

Its proximity to Research Triangle Park and years of groundwork in economic development have put Holly Springs in the "path of progress," Mizelle told the Town Council on Tuesday night.

"It's exactly what we've been working for," she said. "So this is a beautiful day in Holly Springs."

Luring the manufacturing facility required an incentives package that includes $8.3 million in incentives from Holly Springs . On Tuesday evening, the Town Council was expected to approve buying 167 acres in the business park for $7.3 million and transferring ownership to Novartis. The council approved an additional $1 million spending for site clearing.

Holly Springs has received an $800,000 grant from the Golden LEAF Foundation to help fund infrastructure improvements in the business park.

The Town property taxes that Novartis pays on the first phase of construction are expected to enable Holly Springs to recoup its investment within a decade, Town Attorney John Schifano said, estimating conservatively. Without those incentives, Town officials said, there were other places ready to offer that much or more for the jobs, taxes and economic boost that Holly Springs will receive.

The governor's announcement was the culmination of five years of economic development groundwork to make Holly Springs attractive to the growing bio-tech industry.

The recruitment known until Tuesday as “Project Aardvark” took place in fits and starts, a flurry of activity followed by months of relative quiet. Mizelle began working on the project after receiving a request for information in September 2004. Since that time there have been countless phone calls, meetings and negotiations to get Novartis to build here.

“There has been a lot of vision by our elected officials,” Dean said.

Such a huge manufacturing facility will spur jobs indirectly for companies providing goods and services to it – for examples, research offices, printing operations, etc. Computer models project creation of an additional 331 jobs in companies supplying Novartis, with about 96 of those jobs going to Holly Springs in addition to those employed at the plant.

Several months ago, Holly Springs was a finalist in Bristol-Myers Squibb's nationwide search for a location to build a manufacturing facility.

“It's rare to have a town our size dealing with two projects of this magnitude in nine months,” Dean said.

Bristol-Myers Squibb expressed interest in county-owned land along N.C. 55 Bypass at the future interchange of Interstate 540. When the company decided not to locate on the site, Wake County commissioners voted 5 to 2 to proceed with plans to build a landfill there.

For years, Town leaders have become increasingly confident that Holly Springs is positioned to take off, propelled by the economic engine of Research Triangle Park . At a distance of 18 miles, Holly Springs is close, but not too close, to RTP – a short trip down N.C. 55 to more affordable land and less traffic congestion.

From the outset, Town officials understood the need to market Holly Springs to business leaders, much like companies market their brands to consumers.

“If we don't do this, no one else will,” Dean said in October 2001 as the Town commissioned a marketing study to verify there was a reasonable expectation of success. “We need to tell the Holly Springs story. It's a good one to tell.”

The Town hired Jennings Consulting to help market the 400-acre business park for technology manufacturing companies. Biotech manufacturing was shaping up as a national trend. It seemed like a good industry for Holly Springs to focus on.

“But do you have the pieces in place to make it work?” Dean asked, noting the need for the marketing study.

Jennings Consulting presented its branding study to Holly Springs ' leaders in early 2002, prompting Town officials to do the things necessary to prepare for biotechnology manufacturing.

“To help market it, the Town obtained state certification for Holly Springs Business Park . It remains the only state-certified business park in Wake County.

Town officials developed the Economic Development Web site and other marketing materials to bring Holly Springs to the attention of corporate leaders. The Town established a foreign trade zone in the park; expanded its water, sewer and transportation capabilities; and increased the Town's presence in the biotech trade world.

“We laid all the groundwork,” Dean recalled. “During that time, you don't see a lot of activity.”

Extension of infrastructure was a key part of the process.

“It's been years of work to make sure we have water and sewer capacity to keep up with residential growth and at the same time have capacity to attract an industry like this,” said Stephanie Sudano, director of the Town's Engineering Department.

A decade ago, Holly Springs began studying how best to pipe water from Harnett County to supplement the flow from Raleigh . Construction began in 2000 on a pipeline capable of carrying 10 million gallons a day. Holly Springs ' leaders super-sized the line to serve large-scale manufacturing operations like Novartis while accommodating residential growth Town-wide.

With piping capacity in place, the Town is arranging to buy more water to pull through the line.

Council member Peter Atwell called Tuesday a day of celebration and relief.

"Now we can explain all the hard work the Town - especially the Town's Economic Development Department - has put in over the last several years," he said.

Mayor Dick Sears said Novartis would have a major impact on job growth and on perceptions of Holly Springs locally and nationally.

“We welcome them as family,” he said, “and will do whatever it takes to make their transition a pleasant one and a positive one.”

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