The Rio Rancho Governing Body has voted to provide incentives to bring bioscience company Nature’s Toolbox to town.
At a virtual special meeting Tuesday night, governing body members unanimously approved using $500,000 from the city Local Economic Development Act Fund to support NTx’s expansion and move to Rio Rancho from Santa Fe.
They also OK’d the first of two readings of an ordinance declaring intent to issue Industrial Revenue Bonds and an ordinance in which the city and the State of New Mexico agree to provide incentives to NTx, on the condition that it creates specified numbers of jobs by certain dates. The state has agreed to provide up to $5 million in incentives.
“I’m really excited about this opportunity coming to Rio Rancho,” said new City Councilor Karissa Culbreath, a microbiologist.
NTx was founded in 2015.
“We’re retaining them in New Mexico, and we’re helping them expand,” City Economic Development Manager Matt Geisel said.
NTx President Alexander Koglin worked on anti-bacterial treatments at Los Alamos National Laboratories before founding NTx.
At LANL, he said, he noticed current technology was hindering development and manufacture of many drugs and vaccines because it was too slow and large. Koglin wanted to create faster processes that use smaller equipment.
“We basically now have multiple platforms developed,” he said.
For example, this year with the COVID-19 pandemic, he said, NTx added an mRNA manufacturing system that works in a cleaner manner to produce better-quality material in a smaller footprint.
“With that, the price comes down and RNA treatments become more accessible and more reasonable for other applications and for a COVID vaccine, which is heavily funded by the federal government,” Koglin said.
In six to 18 months, the world will need a second-generation vaccine, Koglin said, and NTx technology could help produce one.
NTx technology decreases water use, minimizes wastewater production and cuts manufacturing time from 3-18 months to four or five days, Koglin said. It also removes the need for animal products to maintain cell cultures because it doesn’t use living organisms.
Koglin plans to move into what was the Stolar Research building at 7701 Innovation Way.
The Industrial Revenue Bond will generate up to $20 million for NTx to remodel and equipment the building. Geisel said it also requires the company to make payment in lieu of taxes to Rio Rancho Public Schools, an estimated $176,000 over the life of the IRB.
Geisel said NTx is expected to have about a $190 million direct impact on Rio Rancho’s economy over 10 years with creating 116 jobs. Also, Nature’s Toolbox plans to spend $17 million remodeling and otherwise preparing the building.
Retired engineer Michael Jackovich questioned the use of LEDA for NTx, pointing out that Stolar Research had gone out of business two years after getting incentives.
“Statistically, over 90 percent of start-ups fail,” he said, adding the money would be better spent on an established company.
If the company ceases operations within five years, Geisel said, it will have to pay back the IRB money.
With the LEDA agreement, he said, missing job goals would require Nature’s Toolbox to repay part of incentives, how much depending on how far it missed the goal and how long it had been in Rio Rancho. Also, NTx would get the incentives in portions, most coming once the company met job goals.
Mark Roper of the New Mexico Economic Development Department said the state and city secured enough collateral to get all taxpayer money back if NTx were to go bankrupt.
Jackovich later said he was glad the city had arranged clawbacks.
Stolar had paid clawbacks.
Acting City Manager Peter Wells said the city’s $500,000 comes from a fund created to support economic development, and will not impact general operations.
“Quite frankly, I can’t think of a better project or a better company to use this fund for, especially in such an exciting, growing area where the community has already shown a commitment for biosciences,” he said.
Jackovich was also concerned about biohazardous and pharmaceutical pollution via wastewater from NTx. Koglin said biohazards are toxic leftovers from biological processes, and his company produces none because it doesn’t use biological processes.