State gives tax break to start up to locate in troubled Cambridge neighborhood

How many H1B visa holders? IBM has a real bad track record, in that respect. I'm betting 50%...

Well, if they're building the new facility west of Galileo Way, then they're technically in Area IV, which *is* a troubled neighborhood, so
*falls through open manhole*

Can I have a break from my real-estate taxes? I promise to shop in Boston for the majority of my consumer needs and patronize local restaurants and entertainment venues. Sales taxes collected from my economic activity should sufficiently offset any loss in revenue from such a break.

You don't get to be a humongous business and stay on top without taking advantage of every ill-deserved and unnecessary fisftul of cash that governments wave at you.

there is no place to get a kale & quinoa salad and a latte!

But some have questioned why a tax break is needed to draw a company to prime real estate in a neighborhood that’s been identified as the single most expensive office market on the East Coast outside of Manhattan.

Answer: perhaps to pay that outrageous rent?

IBM has agreed to sublease about 160,000 square feet at 75 Binney St. for the IBM Watson Health venture from Ariad Pharmaceuticals.

Ariad had safety problems with its Iclusig leukemia drug forcing it to downsize. This IBM deal is part of a real estate rescue mission. So, yes, a troubled neighborhood.

Other facts: The tax break works out to $5,000 per worker hired and IBM claims workers there will earn an average $141,000/year, so that's still a net positive tax income for the state.

One of the hottest areas for RE and we give a 2.5 million tax break to IBM to, what, do business in Kendall Square? I just don't understand the logic. And here I was beginning to warm up to Charlie Baker.

If you don't ask for a tax break, you won't get one. But man, this is a gift. Gotta wonder whose palms got greased on this one.

Some interesting observations from the Globe:

“My basic takeaway is that it’s very likely that IBM would have chosen this same location without receiving any tax credits whatsoever,” said Adam Langley, a senior research analyst at the Lincoln Institute of Land Policy in Cambridge. “That’s a windfall for the company that most businesses are not in a position to receive.”

On the other hand, Langley said, the cost of the incentive on a per job basis — $5,000 — is relatively low. “You’ll definitely find much more egregious examples out there,” Langley said.

“Compared to other tax breaks, it’s a relatively modest amount of money,” said Noah Berger, president of the left-leaning Massachusetts Budget and Policy Center. “The problem is that there’s no evidence that these jobs wouldn’t have been created without the tax break. . . . Ultimately, we need to keep our eye on the ball and focus on fundamentals, like making sure we have a well-educated, highly skilled workforce.”

And there are guarantees, though I wonder how often these actually get enforced:

IBM has pledged to the state that it will add 125 jobs a year, starting in 2016, through 2019. If less than 90 percent of those promised jobs materialize, a clawback provision in the tax accord would require IBM to reimburse the state.

Well-paying jobs, too:

The company also said workers there will earn an average of $141,000 a year.