Wednesday, March 17, 2004

States duelin' on the river

Both Ohio, Ky. fighting to lure medical firm

By Tim Bonfield
The Cincinnati Enquirer

Top medical officials from the University of Cincinnati plan to make their pitch today to keep about 500 medical-testing jobs on the north side of the Ohio River.

They will try to convince LabOne Inc. - a public company based in Kansas - that it stands a better long-term chance of cashing in on hot new advances in medical testing if it doesn't move to Kentucky.

Kentucky, though, is fighting just as hard to land the company.

"To take full advantage of the Third Frontier program, it's important that they locate in Ohio," said Dr. William Martin, dean of the UC College of Medicine. "That's the message we will be taking (today) to Lab One."

Ohio's Third Frontier Project aims to create thousands of new jobs by investing more than $1 billion in research facilities, new-product development and low-interest loans to help finance advanced manufacturing technologies.

LabOne recently paid $38.5 million to buy Alliance Laboratory Services, the biggest medical-testing lab in Greater Cincinnati and the second-biggest nonprofit laboratory in the United States.

The new owner has announced plans to spend about $20 million to move the lab from Avondale (at the former Jewish Hospital) to a new, unspecified location. The company wants the new lab - to feature the latest in automated testing systems - to serve as a hub for expanding its business throughout the eastern United States.

The new lab has touched off a recruiting battle between Ohio and Kentucky over where to build it - and which state would benefit from the jobs it may create.

The full details of the competing offers have not been made public.

Ohio officials have offered a 10-year, $4.1 million tax break through the Ohio Tax Credit Authority for the company to stay in Cincinnati.

Kentucky is trying to lure LabOne to Boone County with a 10-year, $2 million tax incentive through its Economic Development Finance Authority.

Those figures do not include other incentives that might be offered through local governments or other state programs.

UC officials told university trustees during a special meeting Tuesday that they plan to promote the chance for LabOne to become more closely involved in the research and development of new genetic and molecular medical-testing technology.

UC and Cincinnati Children's Hospital Medical Center recently received several large grants to pursue new avenues of genetic research.

Among those grants: $25 million from the Third Frontier program to develop a center for computational research at the new, $115 million research tower to be built by Children's Hospital.

The work to be done there, at UC's Genomic Research Institute in Reading or elsewhere on campus, could lead to joint ventures with lab companies to market new tests.

But because Third Frontier was intended to spur high-tech job development in Ohio, it would be harder to work with LabOne on such ventures if it was to build in Kentucky, Martin said.

Dr. Anant Bhati, chairman of UC's medical affairs committee, agreed there could be opportunities for UC and LabOne to work together. But he criticized the sale arrangement for failing to make LabOne promise to keep the lab in Ohio.

"It would have been nice to see that as part of the contract," he said.

Ken Hanover, chief executive of the Health Alliance of Greater Cincinnati, said LabOne officials would like to stay in Ohio as long as the incentives are comparable to Kentucky's offer.

As LabOne nears its decision and the offers and counteroffers fly, UC Trustee Sandra Heimann said it was important for local leaders to push Ohio officials to beat whatever Kentucky offered.

"We should be right on top of that on a daily basis," Heimann said.

"We will do what we can," said Dr. Jane Henney, senior vice president and provost for the UC Medical Center.


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