Pfizer's R&D Cuts Render Kelo v. New London Eminent Domain Case a Waste of Time
Pfizer (PFE) will close its New London, Conn., site and consolidate operations there at the nearby Groton, Conn., site in a swathe of R&D closures as the company seeks 19,500 job cuts in the wake of its merger with Wyeth.
Pfizer’s abandonment of its plans for New London render moot the U.S. Supreme Court’s decision on eminent domain in Kelo v. New London. In the case, the city of New London had sought “eminent domain” power to seize the houses of several people living in a run-down neighborhood. The land was to be transformed into Pfizer’s new facility. The city argued it needed to bulldoze blighted areas in order to redevelop them. Susette Kelo argued the government should not have the right to take her home.
The Supreme Court ruled that as long as the government’s reason for taking the land bore a “rational relation” to a legitimate purpose, then forced takings (followed by just compensation) were constitutional. Many states changed their laws to prevent such takings in the future.
The area on which Susette Kelo’s house once stood is now an abandoned wasteland, the Associated Press reported in September. (Pictured: The vacant lot on which Kelo’s house used to be, by the dr5 blog.)
Another reason Pfizer may have for abandoning New London — despite the trouble it went through the to take the site — is that a tax deal with the city runs out in 2012. Currently, Pfizer has a sweetheart deal with New London that leaves it paying $1.3 million a year in tax, about 20 percent of the assessed value. In 2012, the bill rises to $6.1 million a year.
The details on the R&D closings are, per Dow Jones:
Pfizer will consolidate research and development functions from its New London, Conn., site to its nearby research facility in Groton.
And the WSJ:
The sites Pfizer is set to close include Wyeth’s facility in Princeton, N.J., which has been working on promising therapies for Alzheimer’s disease, including one called bapineuzumab under development by several companies. The Alzheimer’s work will move to Pfizer’s lab in Groton, Conn., which will be the combined company’s largest site.
Besides Princeton, Pfizer said research also is scheduled to end at R&D sites in Chazy, Rouses Point and Plattsburgh, N.Y.; Gosport, Slough and Taplow in the U.K.; and Sanford and Research Triangle Park, N.C. Pfizer is counting as a single site labs close to each other, such as the facilities in Rouses Point and Plattsburgh, Slough and Taplow, and Sanford and Research Triangle Park. Along with the Princeton facility, those in Chazy, Rouses Point and Sanford had belonged to Wyeth.
The company is also planning to move work from its Collegeville, Pa.; Pearl River, N.Y., and St. Louis sites to other locations.
And finally: Fear the Caterer! How can you tell when Pfizer is about to do mass layoffs? The company orders a large catered lunch for staff. It’s happened twice now, a source tells BNET, most recently on Monday.
Image by Flickr user wadem, CC.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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