Monday, Oct 31, 1994

Genentech Locates Major New Facility in Vacaville, CA

Bipartisan effort to locate company's new $150 million facility in Northern California succeeds; plant will initially support 300 new jobs

South San Francisco, Calif. -- October 31, 1994 --

Genentech, Inc. (NYSE: GNE) announced today that it will locate its new $150 million manufacturing facility in Vacaville, California, ending a year-long search that had included almost 50 sites in several states and in Europe. Genentech is negotiating to purchase a 100-acre site in the Vaca Valley Business Park from Chevron Land and Development Co.

"The fact that we're here today in Vacaville is a testament to the strong bipartisan leadership within the state in recognizing both the needs and the potential of our industry," said G. Kirk Raab, Genentech's president and chief executive officer. "Because of the vision of local, state and federal officials, and of business leaders, they were willing to work with us so that our home, California, can continue to share the rewards of our growing enterprise."

Governor Pete Wilson who joined in the announcement said, "This project really demonstrates that local, state and federal officials can work together with private industry and it demonstrates that California is business-friendly and ready to make major new investments."

In addition to the Governor, Raab was joined at the announcement by Assembly Speaker Willie Brown, Jr. (D-San Francisco), Congressman Vic Fazio (D-Woodland), Assemblyman Tom Hannigan (D-Fairfield), Assemblyman Johan Klehs (D-San Leandro), Senator Maurice Johannessen (R-Redding), Vacaville Mayor David Fleming, University of California at Davis Chancellor Larry Vanderhoef and Pacific Gas & Electric (PG&E) Vice President Norm Bryan.

"Genentech is a world leader in the development of new technologies and products. This project will provide the regional and Vacaville economies with a much needed boost. In addition to hundreds of construction and related jobs, the new facility will initially provide more than 300 well paying jobs and help make the Sacramento region the Silicon Valley of the biotechnology industry," said Congressman Vic Fazio.

"Vacaville welcomes Genentech as a major milestone in our economic development and as representative of the overall growth of the biotechnology industry in California," said Vacaville Mayor David Fleming.

Genentech, State & Local Officials Worked Together

Because Genentech's facility will not produce revenue until one or more of its new products are approved by the U.S. Food & Drug Administration (FDA), the city, county, state and PG&E worked together on a package of incentives to help offset Genentech's financial risk.

Genentech's decision to stay in California even though land, construction and operating costs might be less in other states, was aided in large part by a six percent investment tax credit, which applies to new biopharmaceutical manufacturing facilities, and a permanent R&D tax credit passed by the Legislature on a bipartisan basis and signed into law by Governor Wilson last year. In addition, several incentives were created:

  • Congressman Fazio and Senator Dianne Feinstein worked to secure preliminary approval for an economic development grant for Vacaville.

  • Under the leadership of Ted Dutton, the Employment Training Panel offered a $10 million training grant to meet the special needs of a high- wage, high-skill company like Genentech.

  • The city of Vacaville and Solano County agreed to adjust any property taxes on the site for the next few years.

  • TheVacaville Redevelopment Agency also waived infrastructure and permitting fees and the city is committed to streamlining and expediting the permitting process.

  • PG&E offered a historic rate relief discount in exchange for a long-term contract to provide energy for the new facility.

Vacaville also offers proximity to Genentech's technology base in South San Francisco and a skilled labor pool from the University of California at Davis, with which Genentech has a strong relationship and from which the company has historically hired many of its manufacturing employees.

Commitment to Local Community

As a "good neighbor" gesture and consistent with the company's commitment to science education, Raab made two presentations to the Vacaville Unified School District. The first was a $50,000 donation by Genentech to install computer equipment for use by teachers and students. He also said Genentech will link Vacaville high school biology teachers to its national science education program called Access Excellence, enabling them to access their peers and experts across the country. The company will also provide special training for the teachers so they can better participate in the program.

Expansion Highlights Industry Growth

Genentech is part of a burgeoning health care technology industry in California that is estimated to generate $3.7 billion in new construction and more than 100,000 new jobs in the state between 1992 and 1996. At its South San Francisco headquarters, Genentech's recent expansions include an $85 million Founders Research Center dedicated in October, 1992, a $58 million Process Science Center started this year and a $37 million manufacturing expansion completed in 1993. The company expects to complete the purchase of the land in Vacaville early next year and finish construction of the first phase of the facility by late 1997.

Genentech's most important asset is its science. The company's research has led to ten--almost half--of biotechnology-based products on the market today. Genentech is the only biotechnology company to have taken five of its own products from the laboratory to the marketplace. Genentech is traded on the New York and Pacific Stock Exchanges under the symbol GNE.

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