10 things to know about Merck’s proposal to come to Austin


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Merck & Co. Inc.

The city of Austin’s Economic Development Department announced last week that pharmaceutical giant Merck & Co. Inc. has shown interest in building an information technology center in Austin.

Here are 10 things to know about Merck and its plans in Austin:

1. Merck develops medicines and vaccines. It also conducts medical research into various diseases, including cancer, hepatitis C, cardio-metabolic disease, antibiotic-resistant infections and Alzheimer’s disease, as well as global pandemic diseases, such as ebola, according to the company. Merck is based in Kenilworth, New Jersey, and has about 68,000 employees worldwide.

2. The company wants to open an information technology “hub” in Austin. Merck began opening IT hubs in 2014 in order to centralize its IT staff. The company has opened hubs in Branchburg, New Jersey; Prague, Czech Republic; and Singapore.

3. No deal has been made. Pending approval of an economic development agreement between Austin City Council and Merck, the company anticipates it could open this year in a temporary location. Construction of a long-term space, proposed to be up to 90,000 square feet in size, could begin toward the end of 2018 and be completed by 2020, according to Merck.

4. Merck says it could bring 600 new jobs to Austin, according to a proposed performance-based agreement between the company and the city. The average annual salary for Merck’s proposed Austin center is projected at $84,586, with the lowest 10 percent of employees earning an average of $54,511 annually. By 2026, the company projects its median annual salary for Austin-area employees would be $79,500.

5. Austin would give Merck up to $856,000 over 10 years, including $200 for every full-time job the company creates, according to a draft economic development agreement. The first payments from the city to Merck could be made in 2018.

6. Merck estimates it could make more than $28 million in investments in Austin, the bulk of which would be put toward construction costs. The company says an Austin IT center could create “significant contracting opportunities for local firms … as well as an estimated $2 million in annual expenditures for local services and an estimated $500,000 in annual local purchases,” according to the performance-based agreement.

Brackenridge Redevelopment

7. The company has shown interest in Austin’s downtown Innovation Zone. Merck says it is evaluating several possible locations in Austin, according to a business information form released by the city. However, priority could go to a location in Austin’s downtown Innovation Zone near the The University of Texas Dell Medical School and the soon-to-close University Medical Center Brackenridge. The Innovation Zone concept was first touted in 2014 by former Austin Mayor Lee Leffingwell and has been spearheaded by state Sen. Kirk Watson, D-Austin. Central Health officials hope the redevelopment of the UMCB campus could provide opportunities for new medical-related research and service development. Austin is not the only city Merck is considering as the location for a new IT center, although it is the only Texas city to attract the company’s interest.

8. Merck could collaborate with Dell Medical School, particularly if a partnership between the two aligns with the school’s health-related projects, including initiatives to eradicate human papillomavirus and cervical cancer, Clay Johnston, the school’s dean, said in a March 31 statement. “Dell Med is focused on our mission of transforming the ways this community gets healthy and stays healthy,” Johnston said. “While a number of details need to be worked out, a collaborative relationship with this company could create unique opportunities to fulfill our mission in different and far-reaching ways.”

9. Austin City Council will see a presentation Thursday on the proposal. A public hearing and possible council action could take place April 13, according to the city.

10. The city is seeking public comment. A comment period will continue until 5 p.m. on Tuesday, April 11. A survey and documents related to the proposal are available online at the city website. Written comments will be given to City Council on April 12, according to the city.