City lending $1.5 million to Chesapeake Biological lab firm to relocate downtown

September 26, 1996|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

Following the mayor's charge to make Baltimore home to more biotechnology firms, city officials yesterday approved $1.5 million loan to Chesapeake Biological Laboratories Inc. to consolidate its headquarters and manufacturing facilities at a new location downtown.

The Board of Estimates voted unanimously to approve the loan, which will allow the company to buy land and make improvements to a 70,000 square-foot building in the 1100 block of S. Paca St. located in the empowerment zone.

To buttress the $11 million move, the state had approved earlier a $7 million Industrial Development Bond.

Chesapeake Biological President John C. Weiss III said the move could be complete in about 15 months and the company was expected to hire about 23 additional employees within four years.

In all, the company -- a contract manufacturer of pharmaceuticals and medical devices -- employs about 50 people at its Owings Mills headquarters and at its 15,000 square-foot facility at Seton Business Park in Northwest Baltimore.

"This is a win-win situation" for the city and the company, Weiss said.

Chesapeake Biological will save money because it is relocating into the empowerment zone, a federally designated urban revitalization program that offers $100 million in grant money and tax breaks to businesses.

The latter include tax credits of up to $3,000 for each worker living in the zone as well as credits for the depreciation of business equipment.

Sixteen-year-old Chesapeake Biological had sales of $6.1 million and a net profit of $309,000 for the fiscal year ended March 31. But just recently, the company lost nearly 40 percent of its business when Allergan Inc., a California-based medical products company, didn't renew a production contract for a surgical eye lubricant. For its first quarter ended June 30, the company reported a loss of $86,000.

"Allergan was large volume, but low profit," Weiss said.

Though he would give no specifics, Weiss said he expects to soon replace most of the revenue generated by that contract.

After Allergan pulled out, Weiss was brought in last May to rebuild the business.

Weiss worked to broker the loan deal with Baltimore Development Corp. officials, who have been trying to turn Baltimore into an attractive area for biotechnology firms and other health-related companies.

Baltimore has an uphill battle to attract biotechnology and high-tech firms, many of which are located in Howard and Montgomery counties. Howard has about 90, many of them in Columbia. Montgomery has about 110, most along the Interstate 270 corridor near Rockville and Gaithersburg.

Pub Date: 9/26/96

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