SALEM — A local pharmaceutical firm has defaulted on conditions of its $450,000 loan because it failed to create enough jobs.
But Francis Smith, president of Bio-Concept Laboratories, said the struggling firm is making a resurgence after being hit hard by the recession and is repaying the loan. He also said the company expects to eventually create the 25 required jobs, nearly doubling the workforce at the Industrial Drive facility.
“We are fully expected to be back on track,” Smith said.
Smith and representatives for agencies involved in the economic development initiative went before Salem selectmen earlier this week to update them on the project.
The $450,000, obtained through the Community Development Block Grant Program, was approved by the state Executive Council in 2006. That allowed Bio-Concept to move from its 4,000-square-foot building on Route 28 in Derry to a facility several times its size at 13 Industrial Way in Salem.
But like many business sectors, the recession took its toll on the pharmaceutical industry, setting the company back, Smith said.
“Bio-Concept was supposed to create 25 jobs, but things didn’t go as planned,” CDBG consultant Donna Lane said. “They created a few jobs, but not the 25.”
She said the company was given extensions over the years, but it still could not comply.
“We’re not going to extend it anymore,” Lane said. “We’re closing it out.”
Lane addressed selectmen as did representatives for the New Hampshire Community Development Authority and the Regional Economic Development Center of Southern New Hampshire.
Laurel Bistany, executive director of the Regional Economic Development Center, said Bio-Concept had to repay the $450,000.
The pharmaceutical drug development firm had 20 employees at its Derry facility and now has nearly 30 in Salem, Smith said. But that’s far short of the 45 to 50 expected to be employed there by now.
Smith said yesterday development companies began cutting back on their research in 2008 — the year Bio-Concept moved to Salem.
“Our revenues went down by half,” he said. “The economy hit everybody.”
That also affected expansion at the Salem site, Smith said.
“There were extended delays in completing the construction,” he said.
The pharmaceutical industry is making a full recovery, Smith said. He expects to have created 25 jobs within the next three to five years, but that’s several years later than expected.
Glenn Coppleman, economic development director for the Community Development Finance Authority, said economic development projects such as the Bio-Concept proposal have usually worked out in past.
“We have a lot more successes than not,” he said.
Selectmen’s Chairman Everett McBride said it was positive news for taxpayers and the town that they wouldn’t have to foot the bill.
“There is no loss to the taxpayers of Salem,” he said.