Berkeley is scrambling to line up state tax cuts and credits for Bayer, which is considering moving some or all of its 1,700 jobs out of town.
The pharmaceutical giant, which manufactures a hemophilia drug called Kogenate from its Seventh Street plant, will decide in a couple of months whether it will eventually move some or all of its manufacturing of the drug elsewhere, spokeswoman Trina Ostrander said.
Bayer will soon produce a new version of the drug, called Kogenate-ph, that will require retooling its plant and retraining workers, Ostrander confirmed. The company is deciding whether that could take place where the cost of doing business is lower.
Ostrander said Bayer pays the city about $7.3 million a year in property taxes. She had no figures for sales taxes.
Julie Sinai, chief of staff to Mayor Tom Bates, said if Berkeley succeeds in creating an enterprise zone in West Berkeley, Bayer would get about $13 million in tax breaks over the next 10 years.
"Bayer is a global company and every significant decision they make is based on the bottom line," Sinai said. "So we need to make sure they understand the value of being in our community with a qualified work force which creates a mutual benefit for them to be here."
Sinai said the city is not worried that Bayer would suddenly pack up and leave, but if it does move some of its manufacturing and training out of town, that would be the beginning of the end.
"The concern is if they are to contract out a portion of their processing, what does that mean for the long term?" Sinai said. "There's definitely some potential for job losses over the next decade. Our concern is that they stay whole."
To do that, Berkeley is working with Oakland and Emeryville to extend an existing Oakland enterprise zone to Berkeley.
An enterprise zone is a geographical area that helps towns with hiring and job creation by giving companies a break on sales taxes if they hire local people, and tax incentives for buying manufacturing equipment.
"It wouldn't just benefit Bayer, it benefits any manufacturing in West Berkeley," Sinai said.
In Berkeley, that area would include everything west of San Pablo Avenue, Sinai said.
The process for getting the tax credits includes winning approvals from the Oakland City Council, which already has happened, and from city councils in Berkeley and Emeryville, Sinai said. After that, state approval is required, she said.
"Once the cities approve it, the state will approve it pretty quickly and the state already has given us the preliminary OK," Sinai said.