Vertex didn't hire as many people as it promised Boston for its new HQ, so it's giving up part of the tax break it got

Mayor Walsh says his administration and Vertex have negotiated a roughly 25% cut in a property-tax deal for Vertex because the company did not bring as many jobs to the South Boston waterfront as it had originally said it would.

In a filing with the City Council, Walsh says Vertex will now get $9 million off its property-tax bill through 2019, rather than the $12.1 million originally negotiated in 2011.

While the project helped spur the development of the waterfront area, the original deal was based on Vertex bringing roughly 1,750 jobs to its $1-billion, two-building headquarters. In fact, Walsh writes, the company is only employing 1,311 people there.

While Vertex believes it will meet its job commitment in future years, it nonetheless acknowledges that it has fallen short of the benchmark required under the agreement.

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Comments

Nice work Adam

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You were the first to post this yesterday and now the business journal has this as its top story stating " as first reported on universalhub". Thanks for staying on top if things when the "professional" media outlets (with multiple employees) can't keep up!

That's adorable!

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Keep your feeling of pride and superiority in mind when they lay you off in a couple of years. (((HUGS)))

Really.

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I used to say [email protected] like that until I got laid off from my fancy job at (insert fancy company name here).

Hi Nancy, no need to get

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Hi Nancy, no need to get hostile. I'm just excited. Been trying to get a job there for over a year. And I'm not sure what I said that makes you think I feel superior to anyone. Cheers

Great

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What is the mechanism or process by which the city (or other entity) follows up on these things?

Annual Filing

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The company has to make a filing with the state every year.

Nice to see Vertex "fessed up" although they may not have had an out.

I looked at one a few years ago for JP Morgan and from what I could tell they "fudged" twice. They closed an office or two in downtown and transferred a bunch of people/jobs over to the building with the tax credit in Southie from the leased spaces they had downtown. Then they acquired a company, put them in that office building and claimed "new jobs". I only know these things anecdotally so it's possible they at least followed the letter of the law - but there were some very suspicious anecdotes. In many cases it's like making a lemonade/iced tea combo and then trying to separate out the lemonade and the iced tea later. Over a few million bucks among billions in tax revenues the state probably can't be bothered looking at this stuff in much detail.

Perhaps a good one for the Globe investigators to pursue - but my guess is you run into privacy issues and need more records than the company could/would be compelled to provide.

Well

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business is speculative risk, unlike Gov. They don't just hire people to fill a quota.

Businesses unlike gov look for skilled employees, not people based on race, gender and who you know (though it can be a factor it's usually secondary unlike gov.). And on top of that, the local market for people with a biotech background is extremely competitive.

I'd say if they're operating in the black locally, 1,250 new hires isn't that bad. These are high paying job with employees (and the employer) contributing a lot of tax dollars to the local, state and federal level through various forms of taxation.

Simply put its a company that wasn't here locally before contributing to the economy and creating job, both directly and indirectly.

Well

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Nobody, least of all the mayor, is doubting Vertex's role in reviving the waterfront (remember when it was basically just the courthouse, some restaurants and a gazillion parking spaces?).

At the same time, hey, they signed a contract, in which they committed to bringing a certain number of jobs to the area in exchange for a tax break. They didn't meet the number they agreed to, so they have to give up part of the tax break - as called for in that contract. Contracts are good, no? The surprising part is that somebody at City Hall noticed and did something about it.

uhh that would be wrong

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They were in Cambridge. We paid them to move across the river. They needed new space anyway and they weren't going anywhere except to a different office building that still needed to be built somewhere near boston.