Pfizer in Groton: With Such Effort, What Went Wrong?

The Chairwoman of the Groton Economic Development Commission said commissioners presented a plan to town leaders months ago to form an agency to manage the former Pfizer research headquarters.

They were ignored, she said.

Now Chairwoman Lian Obrey said they are exasperated by the announcement Wednesday that Pfizer, Inc. will raze the 750,000-square-foot complex known as Building 118. Obrey said commissioners also got nowhere with state officials.

“The people of Groton have got to say ‘enough’,” she said. “We need to have an outcry of people to say ‘We can’t handle this kind of loss’.”

The Idea

The commission’s idea was "Catalyze" or the "Connecticut Advanced Technology And Life Sciences Enterprise Zone", a proposed for-profit facility owner and lessee that would have run out of vacant facilities on Pfizer’s campus. The group planned to manage tenant demand for space and interest in lab equipment.

It envisioned using private investor funds and soliciting worldwide tenants, along with leveraging the expertise of the University of Connecticut, Electric Boat, the U.S. Navy, Naval Research, the Groton Air Guard, and the U.S. Coast Guard Academy.

George Mathanool, a former international banker and vice chairman of the economic development commission, Robert Frink, a former project manager for construction and technology projects, and Eric Foster, a former Federal Reserve and trade association attorney, were listed as creators of the project.

Obrey said the group was "turned away like they were just people trying to make a buck.”

“We’re supposed to be involved in these things and what we’ve tried to do has just been totally ignored," Obrey said. "And I question, why did they put us on this committee if they’re just going to ignore us?

Negotiation Breakdown

Groton Mayor Heather Somers said Pfizer broke the news to town and city officials during a conference call at 1 p.m. Wednesday that the company would raze the headquarters on Eastern Point Road.

She said Pfizer had been negotiating with a developer who had been willing to make a substantial investment, and that the state had also committed to investing in the project. She said negotiations broke down over environmental issues, logistics and parking.

Town Manger Mark Oefinger declined to name the developer, but said he had 80 million square feet of work in his portfolio and the Pfizer project would have been small to him.

City Mayor Marian Galbraith issued a statement Wednesday saying she was disappointed by the company’s choice.

“It is unfortunate that despite all of our efforts and a viable alternative, Pfizer has decided to demolish this asset and thereby eliminate a significant opportunity for economic growth in the region,” she said. “I urge them to reconsider.”

Said Groton City Councilor Keith Hedrick: “The thing we can’t do is we cannot panic.”

A Pfizer Letter

A Pfizer spokeswoman could not be reached for comment Wednesday. But a March 27 letter from Rod MacKenzie, Group Senior Vice President at the Groton site to his Pfizer colleagues, explained the situation differently.

The letter said that the company was grateful for the efforts of the governor, U.S. Rep. Joe Courtney, the state Department of Economic and Community Development, the town, the city, members of the state and federal delegations, and the local business community to find a suitable buyer or developer.

“However, despite these extensive efforts, we have ultimately been unsuccessful in finding a viable re-use for the 118 complex,” the letter said.

Macenzie wrote that the company’s Global Operations team had been “aggressively marketing” Building 118 along with five other buildings in Groton, and had shown the buildings 45 times.

He said it had made "very good progress" in the re-use of buildings on the campus and those results would be announced shortly.

MacKenzie wrote that the company needed to run efficiently, and “given the substantial operating costs associated with maintaining an empty facility and having exhausted potential alternatives, we are proceeding with plans to raze this building…”

He added that “Groton continues to be our largest R&D facility and all of you play a pivotal role. . .” in assuring the company’s future success.

Demolition Plans

Mayor Somers said the building has been stripped inside, but she was told the town wouldn’t see it physically removed until the summer, perhaps in July.

Michael B. Collins, a member of Representative Town Meeting who also serves on the City of Groton Planning and Zoning Commission, said he saw the company last fall and it was granted a demolition permit.

He said the company’s plan, if demolition proceeded, was to remove hazardous materials first, then to collapse the concrete and masonry on itself.

“When it’s going to be all done, it’s going to look like a big grassy lawn.” he said.  “In some respects, it would be better than an abandoned building that sat there for 10 or 12 years.”

But Collins said he also believes losing the headquarters will affect people's confidence.

The Ripple Effect

“The ripple effect from it is tremendous, psychologically and economically,” Obrey said. “I think there is a real fear in people that have been paying attention that eventually Pfizer will leave the area.”

She said it would filter down to smaller companies.

“That small business that was struggling, that was marginal, when they see something like this, they’re not inclined to keep going," she said. "Because they know their clientele is going down.”

Loss and the Budget

The demolition would mean a loss of about $2.1 million in taxes for Groton, which Oefinger said would probably hit in the 2015 fiscal year.

But others said it could prompt radical budget cuts immediately.

Oefinger has proposed $121.6 million budget for the coming fiscal year, an increase of .6 percent over current spending, which would require a 5.4 percent increase in the tax rate. Representative Town Meeting asked Oefinger recently how much it would need to cut to hold the mill rate at zero.

The tentative answer was about $4 million.

“We’re coming up on a budget season where we’re already looking at making cuts to the budget,” said Hedrick, who also serves on Representative Town Meeting. “I am concerned that some people might use this to try to make drastic cuts that could hurt us more than help us with taxes.”

'Unfriendly' to Business

Hedrick said the town and city must do more to help small businesses staring out.

“We are not business friendly in the city and the town. We have got to be nicer to people,” he said.

Hedrick said mom and pop operations don’t get enough help understanding the rules and regulations, and then they are rigidly enforced.

“You can’t selectively enforce the requirements, but we have to do something to get small business to want to come here,” he said.

Obrey pointed to the industrial park on Flanders Road, where businesses have been clamoring for water and utilities and have warned they may leave.

Alicia Bauer, a member of Representative Town Meeting, said she’s concerned about the other empty buildings Pfizer owns. She said Groton needs a plan.

“We may be able to work deals out with Pfizer to buy some of that land, or the state could buy it and subsidize other business coming in,” she said. Alternatively, she said if the company levels more buildings, the state could offer incentives for businesses to build to suit their needs.

“People will have fear instead of thinking, ‘How can we use that land to make our town better?'" she said. "Turn that into an asset and not a detriment to our town.”