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Drug developers

Graphic by Alex Swanson YH Staff

On Jan. 19, 2016, Alexion Pharmaceuticals officially moved their headquarters into a new flagship building at 100 College Street. The structure towers over downtown New Haven, 11 stories of gleaming glass and steel rising up over the end of the Oak Street Connector. When the move is complete and the building is filled, it will hold around 1,000 employees working in a combination of office spaces and state-of-the-art R&D laboratories.

Alexion isn’t new to Connecticut: it got its start in New Haven’s Science Park, and has been headquartered in Cheshire, Conn., a half hour out of town, for the last 16 years. But its return to New Haven is significant, both for the company and the city. In 2011, as it outgrew its Cheshire office, Alexion considered its options for expansion. The central location and vitality of an urban environment made New Haven an attractive option.

But Alexion wasn’t enticed by New Haven’s culture alone: the deal was sweetened by Connecticut governor Dannel Malloy’s “First Five” initiative, an incentive program created in 2011 to bring and retain high-growth companies in Connecticut. In 2012, the company announced it was moving its global headquarters back to New Haven. “The company could have gone to various cities; we wanted to—or chose to—grow the company in Connecticut for several reasons,” said Kim Diamond, executive director of corporate communications for Alexion. “First, New Haven is kind of a central location for recruiting talent; it has access to Amtrak to be able to get to New York City and Boston, for example. And it also offers a vibrant community for our employees. It’s good to be in an academic area with Yale and other universities here. And we were just happy to be coming back to New Haven where we started 24 years ago.”

Meanwhile, the arrival of a major pharmaceutical company in the downtown neighborhood is a boost for the area between the hospital district and historic downtown area around the Green. It fills in a downtown neighborhood that had once been considered lifeless, bringing the promise of a vibrant hub of medical and technical innovation. The arrival of the Alexion headquarters parallels a wave of new high-density residential developments in the downtown district. The influx of highly-skilled medical industry workers to the district—and the possibility that some of them will move into these new luxury residences—promise the potential of a host of related restaurants, cafés, and other service industries to serve this new, active downtown population. But Alexion’s move to downtown New Haven isn’t just some new trend: it is the next logical step in nearly a century of city economic development policy. The future of New Haven is entangled in its past.

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Industrial manufacturing was the bedrock of New Haven’s economy until the late 1920s, driven by institutions like the Winchester Repeating Arms factory. However, like many cities in the Northeast, heavy manufacturing declined precipitously in the post-war period. This had dramatic consequences for the economic and social structure of the city. In the ‘50s and ‘60s, many middle class workers began moving from the city proper into the surrounding suburbs, mirroring the pattern of “white flight” that was common in many American cities. According to former New Haven mayor John DeStefano, by the time of the strikes at the Winchester plant in the late seventies, “factories had largely exited places like New Haven.”  The plant underwent dramatic downsizing in the latter half of the 20th century, closing for good in 2006.

In a drastic and ambitious attempt to halt the city’s decline in the late ‘50s, mayor Richard C. Lee began an aggressive approach of “urban renewal”, a well-intentioned but ultimately detrimental policy that fundamentally changed the character and physical geography of the city.  The Oak Street Connector is the archetypal example of New Haven’s ambitious but flawed brand of urban renewal. It branches off of the interstate and slices through downtown, separating the Green from the hospital.  Before the ‘50s, Oak Street had been a major residential and commercial zone.  Over the years, the condition of homes in the neighborhood deteriorated, with many standing vacant. Modern infrastructure and services were largely absent.

The city marked Oak Street as a prime target for urban renewal, since it was a glaring example of what they considered “urban blight.” City planners completely demolished the neighborhood, tearing down businesses and homes and displacing its residents, many of whom were poor and of color, and began constructing a major highway through the city. This would become what we know today as the Oak Street Connector. Although it was intended to knit the city back together by bringing suburban emigrants back into the city, it ended up creating an even deeper fissure. “The Oak Street Connector, which was supposed to revitalize New Haven…became this emblem of failed urban renewal policy which displaced a lot of people and created a sharp division in the town between where the hospital is and downtown New Haven,” said Chloe Taft, a Postdoctoral Associate in American Studies at Yale who focuses on American urban history and postindustrial redevelopment. “Only recently are they trying to mend the urban fabric and reconnect the city.”

To add insult to injury, the Oak Street Connector was never really completed. Rather than running west across New Haven and meeting up with Conn. Route 34 out by the Yale Bowl, the Connector ends abruptly after passing College Street, its highway lanes morphing suddenly into the exit and entrance ports of the massive Air Rights Garage. It is a bizarre ‘highway to nowhere’ that requires a complex system of exit ramps and city streets for cars to be able to proceed further west.

The city pursued these projects with significant funding from the federal government.  “New Haven is a model of what happened with urban renewal, and what went wrong, because it received a disproportionate amount of federal funding in the ‘50s and ‘60s compared with other cities. It had a mayor that very aggressively tried to capture that federal money,” says Taft. At the time, New Haven’s urban renewal project was hailed as the flagship for the future of urban planning; today it is the textbook example of its failure.

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Since the ‘70s, New Haven and other cities across the country have stopped pursuing this heavy-handed, top-down mode of urban renewal as a form of economic development and revitalization. There has been an increasing focus on recruiting replacements for traditional industrial employers. With heavy industry no longer a serious option for an economic base, former Rust Belt cities like New Haven have been seeking out new types of industry to take its place. In the ‘70s and ‘80s—when the economic situation of New Haven seemed most desperate—“the economy had not shifted to a new base…I think as manufacturing was declining it wasn’t clear what was going to take its place,” said Destefano. “I think by the early-to-mid nineties there was a sense of what might be taking its place, in terms of the re-emergence of urban centers that are locations for talent in the workforce.”

Increasingly, cities began to see information-based industries as good replacements to fill the economic hole left by the departure of heavy manufacturing. According to Elihu Rubin, Assistant Professor of Architecture at Yale, these information-based industries include the “FIRE” (finance, insurance, real estate) sector, but also more recently, medical, research, and educational fields—“Meds and Eds,” just like Alexion.

Many cities actively recruit Meds and Eds to their downtown cores because they are seen as the best option for stable revenue and job growth. To accomplish this, cities like New Haven have tried to create “incubator spaces” near major universities to spur the birth of medical and information technology companies, which are valuable to the economy of cities since they grow quickly and often spin off into new companies as they create new technologies. This means that capturing a single high-tech company can create many well-paying jobs and build an ecosystem of entrepreneurship. In principle, this would lead to a self-sustaining cycle of innovation and job creation—the holy grail of economic development—in the pattern of Silicon Valley or the Route 128 corridor in Massachusetts.  

Science Park at Yale was created in the 1980s as one of the first of these incubator spaces. “Well, the idea was that places like MIT had a strong connection to all these high technology industries. So why can’t we try to create a space in New Haven to have similar kinds of synergistic spinoff?” says Rubin. “But I think that was very unevenly successful.” As the Yale Daily News reports, Science Park has struggled to find tenants and remains an isolated bubble in the city. But although New Haven’s incubator may not be booming as hoped, the Meds and Eds industry seems to be thriving in New Haven nonetheless—not in Science Park, but downtown.

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This is where Alexion comes back into the picture. In 1992, Alexion was founded in Science Park by scientists with ties to the Yale School of Medicine. They aimed to develop a drug to treat a rare immune system disease. In 2000, Alexion moved its headquarters from Science Park to a suburban campus in Cheshire, Conn. This growth model has been followed over the last few decades by many major “high-tech” companies, which have located their headquarters on private campuses in the suburbs. It’s a case of the cart following the horse: these companies were hot on the heels of the white-collar workers who had moved from cities into the suburbs. Alexion’s move to Cheshire also reflected Science Park’s struggle to establish itself as a competitive med-tech incubator. DeStefano, who was mayor at the time Alexion left Science Park, commented on Alexion’s departure from the city, saying “the city was not a particularly good host in terms of being able to provide the kinds of incubator facilities and support…I think the city and the region still have a way to go in hosting these companies, especially supporting the nascent, emerging companies.”

However, in 2013, Alexion announced it would be returning to New Haven proper, moving to a new, state-of-the-art facility to be constructed at 100 College Street downtown. This move is part of an emerging trend produced by the new urban development paradigm: aggressive recruiting of company headquarters by cities like New Haven. Rather than attempt to mold the downtown landscape from the top down in the old “urban renewal” model, cities have begun to grow them from the bottom up.

A number of major companies have already made this suburban-to-urban transition, and more are on the way. Earlier this year, General Electric announced they would be moving their campus from a suburban campus in Connecticut to the Boston waterfront, and the Boston Globe reports that the move from a suburban campus to downtown office buildings has become an increasingly popular one over the last five years among employers seeking to recruit and retain millennial workers, who want to be in an exciting, fast-paced location and don’t want to have to commute out of town.

As Med-Ed attraction becomes the core of economic development strategies around the country, cities and states have been locked in a sort of arms race to attract these coveted high growth companies, which can kick-start local economies. “It’s a great success story,” said Matthew Nemerson, economic development administrator for the city of New Haven, about Alexion’s move downtown. “It’s not without a lot of intervention, in the sense that there’s state money and federal money and the city’s working very hard to make sure they came back here.” Nemerson described the challenge of recruiting and retaining regional companies that make it big: “The first part of the equation is if a company is created in the region; if a company is created at Yale, we certainly expect to hold onto that company. That’s not what’s always happened. That has to be step one. And then step two: if you’re lucky enough to have that company become a major global player in its field, now you have to compete with the rest of the world. So that’s step two. And so we’re now on our third week of step two, and so it’s an exciting challenge, and I think the whole community is up for it.”

Alexion is returning to to a very different urban environment than the one it left 16 years ago. Its headquarters will be located far from Science Park: downtown, in the Oak Street Connector area on College Street, close to the Yale-New Haven Hospital and the Yale Medical School.  This zone is increasingly becoming a hub for Med-Ed industries, especially in the field of life science research and medicine. “I think the Med School doctors want to be near the Med School, honestly,” said DeStefano, reflecting on why the area has become such a booming hub for the healthcare industry in New Haven. “I think Science Park is a great location for startups.  But look, if your life’s in bioscience, you want to be around the Med School. That’s the waterfront for them, and you want to be on waterfront property.”

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DeStefano’s new bioscience “waterfront property” is emerging out of one of the zones ruined by old-school urban renewal policy—the Oak Street Connector corridor, which is at long last becoming a true link between downtown and the hospital. As Nemerson explains, tackling the challenge of rebuilding the Connector has been one the city has faced for decades. “A lot of this happened before the [Harp] administration was here… I think the building blocks are twofold. One is to reimagine the whole Oak Street corridor as a place that a building can go on top of. So what’s known as the whole compound crossing, and the downtown crossing, has been something that people have been trying to figure out how to do going back to the early 1990s.”

Initially, the idea was to put a mall over the top of the corridor. “Then the last administration came up with the very good idea of doing a series of platforms and bridges, which we’re right in the middle of completing,” Nemerson said. These platforms and bridges, which stretch across the sunken Oak Street Connector are creating new developable land in the Corridor, which would be ceded by the state government to the city and then from the city to the developer. The construction of the College Street grade-level platform for the 100 College Street building is just one of several planned development parcels to bridge the Oak Street Connector. This is a part of a project called Downtown Crossing that aims to reclaim the Corridor and reconnect the two sides of the city.

This project of knitting together the two sides of the city separated by the Oak Street Connector is both symbolic and functional, representing a dramatic shift in city revitalization efforts from the mid-century urban renewal period. “It’s a very deliberate project,” says Taft. “Just architecturally, it’s a mending of the urban fabric, a revitalizing of an area that was completely torn apart in the ‘50s and ‘60s and suffered as a result through the ‘70s and ‘80s.”

The organization of the project is very different than traditional urban renewal as well. Rather than using huge federal grants to impose broad-reaching, top-down alterations to a large part of the landscape at once, the Downtown Crossing project is moving in stages and with the participation of actors at many levels. “There are so many different layers here, right? Because first you have to have federal money for the TIGER grant to sort of change some of the highway system, and there was state money to incentivize building the building, and I think there was also state money to help the company move, and there was city money to deal with a lot of the bridge work and a lot of the exit ramps,” said Nemerson. “I don’t even know exactly the whole package, but it changed many times, and there was this amazing cooperation and collaboration between the federal government, the state government, and the city government.”

According to an April 2012 New Haven Independent article, the agreement at that point involved the city, state, and federal government and the Parking Authority all contributing several million dollars each to create the grade-level platforms to be the site of the development. The developer, Winstanley Enterprises, contributed a significantly smaller amount of $500,000 towards preparing the property. Once the property was ceded from the state to city and city to developer, the developer would invest an estimated $100 million into building the 100 College Street building and parking garage, and would be responsible for creating the streetscape and public space around the building.

The significant role played by Winstanley Enterprises in the Downtown Crossing revitalization project reflects the national trend of the increasing participation of the private sector in economic development projects. “The urban renewal programs that created the Oak Street Connector, that was a federal program from the late ‘40s until 1974 when it officially ended that was giving huge subsidies directly to cities to do these kinds of large scale redevelopment projects,” said Taft. “Since the ‘70s, the federal funding to cities has declined precipitously—so that every city in the United States is dependent on private funding to have any kind of economic development. And often they are dependent on private funding for social services that were once funded by the government. And so that’s why every city economic development program is so keen on offering these kinds of incentives and getting corporate headquarters to relocate.”

Nemerson noted this challenge as well with regards to funding affordable housing projects. “We’re trying to figure out creative ways to replace money that might not be there in the future from the federal government, where a lot of the affordability money has come from historically.” This gives private corporations significantly more power in determining the direction of cities like New Haven. “This type of development that’s driven by city incentives to get private investment to relocate—you’re leaving a lot up to the goodwill of the corporations,” said Taft. “The corporations pull a lot of the strings here.”

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In truth, Alexion’s move won’t impact most people who live in New Haven.  Without significant, long-term investments in education and job training programs, bringing in high-tech companies like Alexion, even if they grow and create more jobs, will not provide meaningful job opportunities for most long-term New Haven residents with anything less than a master’s degree. Nemerson was frank about this. “There’s no connection between a company moving from one place to another and jobs being created.” Rather, he stressed, the hope of this new model of economic development is that bringing back high-skill, white-collar jobs will create a multiplier effect that will in turn benefit the broader workforce.

The idea is that if employees like those at Alexion with high salaries live and work in downtown New Haven, they will spend a significant portion of their income on the service industry. In this way, the expansion of higher paying jobs for young professionals will trickle down to other economic sectors which don’t have restrictive skills requirements. “We see openings of a lot of CrossFit centers and gyms, new restaurants, and new art galleries,” said Nemerson. “And so we assume that’s because there are customers for those services nearby. Companies like Alexion tend to employ a lot of people who end up being customers of those services.”

The scale of this multiplier effect will depend, in part, on whether or not these high-skill, high-income professionals move to New Haven or its suburbs. Will Alexion employees relocate downtown, into the newly-built luxury residential buildings that seem to anticipate their arrival? “That’s certainly what we’re counting on,” said Nemerson. Diamond, the Alexion representative, said that although the vibrancy of downtown was a draw for the New Haven location, another major draw for the short move to New Haven was that employees could choose not to relocate their families. Rubin sees the construction of a parking garage at 100 College, right beside the pre-existing Air Rights Garage, as an indication that many Alexion employees may stay in the suburbs. “the office and lab building at 100 College are as important as the large parking garage built behind it,” Rubin said. “How many of the Alexion building’s new users will be commuting to New Haven alone in a car? And how many will decide to live downtown, where a lot of new housing is in the works, and populate the scene?”
Regardless of Alexion’s true effect on the local economy, it is at the vanguard of a movement that will transform the New Haven cityscape as we know it. High-tech, white-collar jobs will continue to return to the city center, and as the new paradigm of urban economic development continues to take hold, New Haven will grow up, not out, bringing new life to downtown.  

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