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Agreement With City Would Keep Key Illumina Operations in San Diego

The city of San Diego plans to provide Illumina Inc. with tax rebates that should ensure the company keeps 300 middle-class manufacturing jobs in town, Mayor Kevin Faulconer announced.

The agreement is expected to be voted on by the City Council the week of July 21.

According to the city, Illumina, one of San Diego’s top biotechs employing 1,500 people locally, had been considering a variety of options to expand its manufacturing operations, including moving outside of the region and the state.

Among the terms of the proposed 10-year Economic Development Incentive Agreement, Illumina is eligible to apply increased sales and use tax revenue it generates over the course of the agreement toward a $1.5 million tax rebate from the city, which Illumina would receive after the city verifies the new revenue, according to the mayor’s office. The city will retain 30 percent of Illumina’s sales tax revenue in addition to the current level of sales and use tax generated by Illumina — roughly $1.3 million annually in the most recent year. After the $1.5 million tax rebate cap has been reached or the term of the 10-year agreement ends, the city will return to receiving 100 percent of Illumina’s tax revenue.

In exchange, Illumina will keep its existing manufacturing jobs and sales force within San Diego, at any site of its choice, during the 10-year term of the agreement, according to the mayor’s office.

“This is a perfect example of how San Diego can support middle-class jobs while also encouraging economic growth,” Faulconer said. “This agreement keeps hundreds of high-wage jobs in San Diego, ensures city residents benefit from over a million dollars in annual sales tax revenue, and strengthens our region’s leadership in biotechnology.”

“The fact that the world’s smartest company has decided to expand its footprint in San Diego speaks volumes to the quality of our biotech industry and innovation economy,” said Mark Cafferty, president and CEO of San Diego Regional EDC. “Not only do we have a mayor that values economic development and job creation, but we also have a cutting-edge company showing how much they value San Diego’s dynamic workforce, manufacturing expertise and research capabilities.”

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