Doing two things at once

By JR Ross

When it comes to investing in jobs, the state of Wisconsin is still apt to look in its own backyard first.

But it’s also trying to find opportunities out of state to encourage businesses to relocate here, and state officials say a recent $1 million loan to attract Exact Sciences Corp. to Madison is a perfect example of that.

The company, which is developing a patient-friendly screening technology for colorectal cancer, is moving its headquarters and operations from Marlboro, Mass., to Madison, with plans to create as many as 150 jobs over five years.

The biotech company fits in nicely with the technology sector the state is trying to build, particularly in Madison, and it helps that there’s a Wisconsin connection in president and chief executive officer Kevin Conroy and senior vice president and chief financial officer Maneesh Arora. Both held similar positions at Third Wave Technologies prior to its acquisition by Hologic, later hooking up with Exact Sciences.

Conroy said that as he looked toward the company’s future, he decided the best place to grow it was in Madison, which he said offered many attractive incentives, including a high-quality education system and growing technology sector. The $1 million loan makes the move possible by helping to cover costs associated with the relocation, he said.

“I really believe that Wisconsin has figured out that the next generation of growth is going to come from the knowledge industry,” Conroy said. “They have made some investments. Those investments are paying off in a meaningful way.”

Deputy Commerce Secretary Aaron Olver said the state’s focus in development efforts remains on the companies that are already here, believing it is a better payoff and use of public dollars than “smokestack chasing” even though it might not attract the headlines.

Exact Sciences proved to be an attractive project in part because Conroy and Arora remained in Madison even after hooking up with Exact Sciences, and the state saw a dual benefit in being able to attract a biotech company while retaining Wisconsin-based talent.

“This is an opportunity where we’re bringing a Massachusetts company here,” Olver said. “But we’re also benefiting from the base we’ve built in attracting that company and benefiting from retaining the talent that we have in Kevin,” Olver said.

But while luring Exact Sciences has been a bright spot, it is proving to be a challenge in this economy to keep and attract companies.

Thomas Industries decided earlier this year to move its Sheboygan operation to Monroe, La. The company, which makes vacuum pumps and air compressors, debated whether to consolidate its operations in either Wisconsin, where it employed more than 300, or Louisiana, where it employs fewer than 100.

State officials won’t disclose what incentives it offered the company to stay in Sheboygan, but local officials pegged the package compiled by the state, city of Sheboygan and Lakeshore Technical College at $2.5 million. Thomas chose Louisiana anyway.

Reports surfaced this summer that Mercury Marine, an icon in the boating industry, could move its operation in Fond du Lac, where it employs 1,900, to Stillwater, Okla., as it seeks to consolidate operations.

And hopes that General Motors would reconsider its decision to idle its Janesville plant proved to be for naught when the automaker decided to locate a new subcompact line in Michigan rather than Wisconsin or Tennessee.

All three states put together incentive packages in an attempt to land the GM work, and Gov. Jim Doyle openly wondered if the state had been used solely as leverage to drive up the cost of the Michigan deal that landed the line.

Though such incentive packages are common, critics question the worth of throwing tax breaks and grants at companies, complaining such efforts are ultimately a race to create the biggest government giveaway.

On the flip side are business groups that argue the packages Wisconsin can put together simply aren’t enough to overcome a hostile business environment created by a combination of high taxes and excessive regulation, which they say has gotten worse between the stimulus package approved by state lawmakers early this year and the two-year budget put into place this summer.

Olver acknowledged the difficult economic environment facing the country, but he said the state is working to use tools like angel investor tax credits and other tax credits to build on advantages the state already has to help make it an attractive option.

“There’s no single silver bullet that leads to economic prosperity,” Olver said.
 

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