Pattye Benson

Community Matters

Shire

Shire moving Chesterbrook headquarters to Boston – 500 employees expected to leave Tredyffrin

Office Chair with a Box of SuppliesSadly, we learned this morning in Joe DiStefano’s Philadelphia Inquirer column that one of Tredyffrin Township’s largest employers is moving the company headquarters from Chesterbrook to Boston.

In the Fall of 2012, Shire announced a decision to build a new large office complex on Trammel Crow property at the intersection of Rt. 29 and Yellow Springs Road, moving their 1,500 employees out of Tredyffrin to neighboring East Whiteland. Shire’s decision to relocate meant the vacancy of four large corporate buildings in Chesterbrook.

However, in May 2013, Shire reversed their decision to move their headquarters from Chesterbrook. After analyzing its ‘global footprint and its real estate presence’, Shire’s new CEO Dr. Flemming Ornskov, concluded, “We feel fine where we are.”

However, eighteen months later, comes today’s announcement that Shire’s headquarters will not only leave the Philadelphia area, it will move to Massachusetts. What is curious is the same Dr. Ornskov, now says, he prefers Boston (he has a graduate degree from Harvard) and a Shire spokesperson says, “Our strategy is to become a leading biotechnology company, and Boston is a biotech center”.

Mixed messages from Dr. Ornskov to his employees! If the move had been a relocation to East Whiteland, as was his plan originally, Shire employees would have probably have retained their local jobs and their homes (many of whom no doubt are Tredyffrin residents with children in the TE School District). Just when the Shire employees thought that they were staying put in the Chesterbrook location, they receive today’s relocation announcement. According to DiStefano’s article, more than half of the Chesterbrook employees will make the move, “Shire plans to move 500 staff — executives, research and development staff and the gastrointestinal, internal medicine and neuroscience business groups — to Lexington, Mass., near the company’s infectious-disease unit.”

Shire plans to start moving its employees in phases, starting in the first quarter of 2015, with completion by the first quarter of 2016. The TE School District has forecasted a potential increase in student enrollment from current township development projects and has held discussion on how the District will meet the increase. Inasmuch as the school board discusses potential increase in enrollment from District development projects, will they likewise discuss how the relocation of 500 Shire families out of the community may potentially decrease the District’s enrollment.

Great Economic News — Shire changes its mind, not moving from Tredyffrin Township!

Last fall, we learned that Shire was planning to move its headquarters from its current Chesterbrook location to Atwater Business Park in neighboring East Whiteland Township when their lease expired. Located in Chesterbrook since 2004, Shire planned to build a new large office complex on Trammel Crow property at the intersection of Rt. 29 and Yellow Springs Road, moving their 1,500 employees out of Tredyffrin. Shire’s decision to relocate meant the vacancy of four large corporate buildings in Chesterbrook.

Today’s Philadelphia Business Journal reports that Shire has reversed their decision to move their headquarters from Chesterbrook. After analyzing its ‘global footprint and its real estate presence, Shire’s new CEO Dr. Flemming Ornskov, concluded, “We feel fine where we are.”

Shire had a signed development agreement and plans were well underway for the company’s move to East Whiteland. According to the article, the real estate project was to construct 10 buildings totally 1.15 million square feet of office space on 110 acres. Phase one was to be four buildings at an estimated cost of $175 million. Although certainly good economic news for Tredyffrin, East Whiteland not only loses this major development project but also the financial rewards of 1,500 new employees paying earned income tax. Does make me wonder what cancelling the agreement cost Shire … but certainly a lot less than $175 million!

Beyond the obvious economic impact, Shire is a great community contributor and supporter — the summer concert series, annual fireworks, Shire Pavilion in Wilson Farm Park, Tredyffrin 300 sponsorship and the list goes on and on. Shire has been there for the Tredyffrin Township community whenever needed and it’s exciting that they are staying here!

Responding to Shire’s decision not to leave the township, Tredyffrin Towsnship Board of Supervisors Chair Michelle Kichline offered the following comment —

The Board of Supervisors is pleased that Shire has decided to remain in Tredyffrin Township. Not only is Shire a world class pharmaceutical company; it is an outstanding community partner. Shire is a long time major sponsor of our Fourth of July fireworks and our summer concert series.

The Township will continue its efforts to attract and maintain businesses, like Shire, that help improve the quality of life in our community and provide jobs to our residents.

Michelle Kichline
Chairman of the Board of Supervisors

It’s official, Shire will leave Tredyffrin for neighboring East Whiteland Township

So close, yet so far away. We have known for some time that Shire was planning to move its headquarters from its current Chesterbrook location but we now know where. According to a press release on Main Line Media News, Shire has signed the paperwork for the construction of a 600,000 square ft. office complex on Trammel Crow property at Atwater Business Park.

Shire has grown significantly since coming to Chesterbrook in 2004 and as a result, the employees are spread among four buildings. The company has expanded from 100 to 1,500 employees and apparently, there was not an option in Tredyffrin to create an adequate business complex. The opening of the new Pennsylvania Turnpike interchange is a bonus to companies that relocate to Atwater Business Park that is at the intersection of Rt. 29 and Yellow Springs Road in Malvern, East Whiteland Township. The move is expected to occur by the end of 2015.

Because the relocation is literally next-door to Tredyffrin Township, the good news is that the employees that live in are unlikely to move. Initially there was discussion that Shire was considering relocation possibilities in Delaware or New Jersey in addition to Pennsylvania but in the end, the decision was made to stay in Chester County. The official statement included the following rationale Shire’s decision of the Atwater Business Park — “geographic accessibility by current and future staff, a flexible footprint that will allow us to meet future growth and changing business requirements, and a single, contiguous layout that facilitates interaction and collaboration by our staff.”

Now that Shire’s decision on ‘where’ they will move is official, the township is not only faced with the upcoming vacancy of four large corporate buildings in Chesterbrook but much more. I would be remiss not to mention the enormous community contribution and support from Shire since relocating to Tredyffrin Township eight years ago – summer concert series, annual fireworks, Shire Pavilion in Wilson Farm Park, Tredyffrin 300 sponsorship, and the list goes on and on. Shire has been there for the Tredyffrin Township community whenever needed – their departure from the township is a real loss.

Earlier this month, Philadelphia Business Journal reported that on a number of vacancies in Chesterbrook, which are addition to Shire’s current lease of 425,000 sq. ft. AstraZeneca terminated its lease on 25,000 sq. ft., Liberty Mutual Insurance ended its 25,000 sq. ft. lease early, GFK Healthcare relocated out of 50,000 sq. ft., Navteq pulled out of 40,000 sq. ft and Centocor moved from their 120,000 sq. ft. location. These companies are either already out of Chesterbrook office park or are in the process of leaving.

Tredyffrin Township needs a an economic development plan for revitalization … where’s the Tredyffrin Township Business Development Council on the corporate mass exodus from Chesterbrook? Remember their June 18, 2012 report, click here.

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Update — Since posting this article, a friend pointed out that East Whiteland Township has an Earned Income Tax. So … all those Shire employees who will continue to live in Tredyffrin Township and work in East Whiteland will pay an EIT. But because Tredyffrin Township does not have an EIT, no portion of that money will return to Tredyffrin Township but will remain in East Whiteland.

From the East Whiteland Township website:

A .5% Earned Income/Net Profits Tax became effective April 3, 1996 by passage of Township Ordinance Number 110-96. The tax requires that all persons living or working in the Township pay .5% on all individual gross earnings and net profits from businesses.

So much for the theory that companies will choose Tredyffrin Township because we have not implemented an Earned Income Tax. Here’s a major international pharmaceutical company moving its headquarters from a location without an EIT to a new location with an EIT.

  • Will it ever be the ‘right time’ to honestly and openly discuss an EIT?
  • How many millions of dollars are leaving the school district and the township annually and being paid to other townships?
  • Or is the answer to TESD and Tredyffrin Township that we just keep cutting programming, personnel, etc. etc?

Shire Considers Other Options to Chesterbrook . . . Please don’t leave!

The struggles with vacant corporate buildings and empty storefronts are no different in Tredyffrin Township than other parts of the region and across the country. In Tredyffrin, we have come to depend on a few of our corporate friends, those companies that have stepped up and helped the community over and over again.

One of those supportive, community-spirited corporate companies is Shire, an international pharmaceutical company whose headquarters are in Chesterbrook Corporate Center. Shire was instrumental in supporting the Wilson Farm Park opening, Tredyffrin 300 celebration, the annual summer concert program, etc. The list goes on and on with their community involvement to our township.

So it was very unsettling to read in the Daily Local the headlines ‘Shire considers alternatives to Chesterbrook’. Shire employs 1,100 in their corporate headquarters in Chesterbrook and leases four buildings from Liberty Property Trust, Pitcairn and Wells REIT. Shire currently leases 400,000 – 450,000 of office space in Tredyffrin. The company is in the early discussion stage on whether they should stay in Chesterbrook or find new headquarters when the first of their leases expires in 2016. Shire re-located to Chesterbrook in 2004 and signed an initial 12-year lease for their building.

The pharmaceutical giant has its global headquarter in Dublin, Ireland but according to the article; the company is committed to staying in the Philadelphia area. A representative for the company dismissed the suggestion that exploring other locations could be an attempt to “start a bidding war between competing states that would result in it receiving more government incentives.”

At this point, maybe the idea that Shire is ‘just looking’ at other options should not be reason for alarm or concern. Certainly Shire, like any company has to look at what makes good business sense. But reading this article, made me again think about the township’s Economic Development Committee – here is a case where this committee needs to move forward. I would suggest a proactive approach with Shire. Not only do Shire and its employees contribute greatly to the local economy through corporate building leases, real estate purchases by employees, etc., I would bet that this company has contributed more financially to the community through their generous sponsorships than other company in the township.

I suggest there needs to be a real push and incentive to have Shire keep its headquarters in Chesterbrook.

Economic Development Committee . . . where are you? Wouldn’t this be the time to reach out to Shire?

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