Global Pharmaceutical Firm Merck Considering Austin For 600-Worker IT Hub

AUSTIN, TX — Merck, one of the world's largest pharmaceutical companies, is considering expanding into the Austin market to build a new technology hub that would employ 600 people, city officials confirmed on Friday.

City filings made public Friday morning provided a glimpse into those plans, an envisioned IT hub reportedly serving as anchor for the innovation district surrounding the Dell Medical School.

To achieve this, Merck would need some financial incentives from the city — inducements now solicited by even the most profitable companies seeking to expand in a tactic now commonplace — to the tune of $856,000. Such incentives would be performance-based over a 10-year period, city officials said.

Performance-based incentives hinge on goals related to hiring levels and the like, payable only when certain agreed-to benchmarks are met. Indeed, it's those 600 jobs that the company offers as a carrot in exchange for those city incentives topping $850,000, as gleaned from an advisory issued by the city's Economic Development Department said.

While these jobs would've come with the package from a company intent on building a campus in a city as thriving as Austin, companies often leverage employment to secure financial inducements from municipalities.

In Merck's case, the jobs would pay an average annual salary of $84,586, with the lowest salary listed at $54,511. Cities often are eager in agreeing to offer financial incentives when jobs are in play, as those workers provide a ripple economic impact on the communities where corporate expansion takes place stemming from worker's expenditures — purchases at retail outlets and restaurants once employees are established along with home purchases, and the like — which help bolster the tax base.

"Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for more than a century," city officials wrote in touting the potential new entrant into the market. "The company has approximately 68,000 employees worldwide and is headquartered in Kenilworth, N.J.," officials added helpfully.

Could Merck make the move to Austin on its own without the need for the $856,000 financial incentive from the city? More than likely, yes: The company reported annual sales for 2016 just shy of $40 billion, $10.1 billion in the fourth quarter alone.

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