The city of Bend has agreed to extend a pharmaceutical company’s three-year tax breaks for an additional two years, and the company, Patheon Development Services Inc., plans to invest $5.7 million and create 22 jobs.

The City Council voted unanimously Dec. 16 to extend the enterprise-zone tax breaks on business machinery, equipment and building improvements, provided Patheon creates jobs at its Bend plant that provide total compensation equal to 150 percent of Deschutes County’s 2014 annual average wage. That works out to $58,649, according to a summary presented to the City Council.

Patheon, which bought Agere Pharmaceuticals in March, plans to increase revenue from its Bend unit by 40 percent in the coming year, according to the summary. The company also plans to invest $5.7 million in new equipment and plant improvements. The tax breaks would cost the city about $16,000 in revenue per year in personal property taxes, the summary states.

Patheon also plans on creating at least 22 new jobs, Bend Community Development Director Carolyn Eagan told the council Dec. 16.

“For me,” Eagan said, “the trade-off seems more than good enough to get these jobs in our community.”

The tax abatement applies only to new equipment and improvements, and not to real property. Deschutes County will collect its share of the tax on personal property.

Patheon, based in Durham, North Carolina, bought Agere for $26 million, according to a Patheon filing with the Securities and Exchange Commission. The Bend unit, at 62925 NE 18th St., occupies a biopharmaceutical niche by creating more efficient ways to deliver drugs in the human body.

Vance Cooper, a project manager at Patheon, said the company, with 8,000 employees worldwide, is a contract manufacturer that works for other pharmaceutical companies.

The city had granted two previous, concurrent tax exemptions to the company when it operated as Agere, which was founded in 2008. The previous agreements were based on $2.9 million in investment by Agere and a commitment to 18 new employees, according to the city. The company now employs 52 full-time workers.

Patheon must meet the terms of the existing agreements to qualify for the extension, according to the terms outlined by the city.

Tax abatements for businesses in Bend are possible through enterprise zones created by Oregon Legislature. In Bend, the zone covers the commercial and industrial areas along Third Street, with pockets on both the east and west sides. A total of 27 companies participate in the zone, Eagan said.

“This is the only incentive that the city of Bend really has to offer businesses,” Eagan said at the council meeting.

— Reporter: 541-617-7815, jditzler@bendbulletin.com