Assembly Square’s Innovation District, possible future home of TransMedics Group, Inc.
 — Photo by Bobbie Toner

By Harry Kane

The city is offering an incentive package to TransMedics Group, Inc. that would yield a whopping $74.56 million in tax revenue over the next decade if the medical device manufacturer moves its global headquarters to Somerville.

Mayor Katjana Ballantyne requested authorization to enter into a tax increment financing agreement with TransMedics that would relocate the company to Assembly Square’s Innovation District, and while the transplant professionals haven’t yet decided whether to lease in Somerville, the deal is in the works.

“That represents one of the most significant economic development opportunities our city has seen in recent years,” said Mayor Ballantyne during the City Council meeting on October 23.

TransMedics is an Andover-based medical technology company that offers organ transplant therapy for patients worldwide. The company was founded by CEO Dr. Waleed H. Hassanein in August 1998.

Their organ care system technology “is a complete, end-to-end donor organ retrieval & clinical management service” that preserves lungs, hearts and livers for transplantation, according to their website.

TransMedics utilizes a nationwide network of clinical and surgical experts. They currently have a dedicated air and ground transport logistics network, including a fleet of 22 jets, that can get to anywhere in the continental United States within two hours, explained a member of the executive leadership team during the City Council meeting presentation.

“This proposal is a vital milestone to advance our prospects,” said Mayor Ballantyne. “This proposal represents a genuine win-win, supporting good jobs and tax revenue, cutting-edge innovation and opportunity to forge a community partnership that will strengthen both Somerville’s future economy and the Commonwealth as a whole.”

Tax increment financing is a tax incentive specifically tied to the investment made by a company that is making both a capital investment and adding jobs, explained Director of Economic Development Rachel Nadkarni.

Nadkarni said that this project will bring “momentum” to Somerville’s expansion of lab science businesses.

“It is a really strong signal to the rest of the world that Somerville is part of the life-science ecosystem,” said Nadkarni.

If the deal goes through, TransMedics would receive an $18 million tax break over the next 10 years. The medical technology company would fill the entire 500,000-square-foot life-science building at 188 Assembly Park Drive.

In addition to the TIF exemptions, the city has provided permit fee waivers of $2,275,000 million.

The lab building will go through a process called tenant fit-out for customizing the commercial leased space. There are currently no interior walls and the expectation is that customizing the inside will take 1-2 years to complete.

The medical technology company would invest an estimated $175 to $225 million to fit-out for occupancy and an additional $50 to $75 million for the acquisition and installation of personal property, according to the TIF draft agreement.

The assessed value of the lab building, which is owned by BioMed Realty, is $223,664,700.

Currently, the medical technology company employs some 300 workers, but they plan on expanding to 900 permanent, full-time employees by the end of 2032. If the company fails to meet their job growth commitments, there is a clawback provision that is standard to a TIF agreement, said Nadkarni.

During the City Council meeting on October 23, the executive leadership team from TransMedics presented their vision for their future partnership with the city.

TransMedics’ presence will help Somerville become an emerging destination for life-science and healthcare innovation, create jobs and economic growth, stimulate local businesses like restaurants and contribute to the community.

As part of the package deal, TransMedics is committed to creating a long-term partnership with the community by making annual donations of $100,000 to the Somerville Public School District, $50,000 to the Somerville Fire Department and $50,000 to the Somerville Police Department.