Hottest ticket in town
Stretched out in front of the DBED office were a bunch of rumpled executives, several of whom had slept on the sidewalk all night, waiting for Vulcan to arrive.
No, they weren’t trying to purchase seats on the 50-yard-line for the Ravens’ upcoming NFL season. The folks in the wrinkled suits were investors queuing up for a chance to apply for a piece of Maryland’s $6 million Biotechnology Investment Tax Credit.
Vulcan is the fellow who accepts the applications.
Maryland’s biotech incentive program already has leveraged more than $24 million in private investment since its inception in 2006. The program provides tax credits equal to 50% of an eligible investment (investors make an equal match). To qualify, companies must be less than 12 years old; be headquartered in Maryland; employ fewer than 50 people; and have a valid certificate from the state DBED.
DBED reviews the applications and issues its initial credit certifications within 30 calendar days. During the first two years of the program, the $6 million credit allocation was not exhausted for several months.
This year, Maryland upped the ante, opening the program to a larger number of investors and giving out larger shares of the creditâ€”up to $250,000 per investorâ€”on a first-come, first-serve basis. The enhanced incentive program had biotech investors flocking to the DBED office like, well, ravens.
If a recent proposal from Gov. Martin O’Malley is enacted, the ravenous appetite of investors for the popular biotech incentives may expand dramatically, and next year’s pre-dawn gathering at the DBED office could resemble a well-dressed version of a signature scene from another famous vehicle for ravensâ€”Alfred Hitchcock’s The Birds.
Gov. O’Malley recently announced the Bio 2020 Intitiative, a $1.1 billion program that would quadruple funding for the Biotechnology Investment Tax Credit by 2013, leveraging an estimated $50 million annually to biotech start-ups in Maryland.
Our guess is that the biotech incentive bonanza will spur at least one related economic development: somewhere in Baltimore, a very shrewd street vendor is preparing to ask city hall for a license to sell hot dogs in front of the DBED office.