A North Carolina-based bioscience company has won new tax incentives from the City of San Antonio after promising to build out its research facility and hire dozens of scientists.
Heat Biologics plans to open the 20,000-square-foot facility, located within the Merchants Ice complex on East Houston Street, as part of a new subsidiary named Scorpion Biologics.
Roughly two months after the county approved a similar deal, the agreement that City Council approved Thursday created a 40% tax abatement on improvements made to the property over the next 10 years — tax relief city staffers estimate to be worth slightly more than $520,000.
By state law, abatements can apply only to new investments made on a property and do not cover its existing value.
Scorpion is set to invest $24 million in the Eastside facility and to create at least 44 jobs. Those jobs, as well as the 11 to be transferred from another Heat Biologics subsidiary, pay an average salary of nearly $80,000, according to city documentation provided with the ordinance.
Mayor Ron Nirenberg praised the company for the creation of those jobs at the council session Thursday, saying Heat Biologics’ investment would be the “strongest boost” for the city’s bioscience ecosystem and could help in the recruitment of similar companies.
Heat Biologics CEO Jeff Wolf attended the meeting, where he thanked the mayor and council, as well as the city’s Economic Development Department and the area’s economic development foundation, recently rebranded as Greater: SATX Regional Economic Partnership.
“We intend to do big things in this facility,” Wolf said. “We expect to perform cutting-edge research and to manufacture drugs that have the potential to save lives in therapeutic areas that are currently untreatable, and to improve the quality of life for treatment resistant illnesses.”
Council Member Manny Pelaez (D8) called the company’s investment a “major win” for the city and especially for District 2, which covers much of the city’s East Side.
City staffers’ estimates peg the project as a net gain for city coffers in the long run. Over the next 16 years, property taxes and sales taxes related to the facility’s construction and hiring are expected to bring in $2.47 million, while associated city services to the site are expected to cost the city nearly $280,000.
The agreement also applies to the Merchants Ice complex, which has undergone redevelopment in recent years as it aims to become a hub for bioscience. The Texas Research & Technology Foundation owns the complex, where the foundation houses its startup incubator VelocityTX.
Heat Biologics, formed in 2008, first came to San Antonio with another subsidiary called Pelican Therapeutics. That subsidiary originally was in Austin, but following a tax agreement in 2017 it was relocated to San Antonio, where its 11 employees are currently working on a therapy that targets lung cancer tumors.
Pelican’s tax agreement is ending as the subsidiary is merged with Scorpion.
Earlier this year, Bexar County commissioners approved a 75% tax abatement on improvements made to the property over the next 10 years estimated as being worth slightly more than $500,000.
The facility is set to open in the first quarter of 2022.