The rapid growth of Bellwater's biotech sector is starting to show up where it matters most to City Hall: the tax rolls, according to a new budget office analysis showing commercial revenue from Foundry Row's laboratories and offices climbing faster than any other segment of the local economy.
The city’s budget office, in a report presented by City Manager Marcus Whitfield, found that payroll tax withholding from Foundry Row’s biotech employers has grown by roughly 34 percent over the past two years, driven largely by hiring at Kestrel Biologics, which raised a $64 million funding round last year and has been rapidly expanding its Bellwater workforce, alongside steady growth at Ridgeline Therapeutics. Commercial property assessments in the district have also climbed as vacant industrial buildings are converted into laboratory and office space.
Whitfield told council members the additional revenue, if the projections hold, would give the city more flexibility than expected heading into budget season. “We built our earlier projections conservatively, and Foundry Row has simply outpaced them,” Whitfield said. “That gives us room to have a different conversation than the one we thought we’d be having a year ago.”
A welcome number, with caveats
Council members reacted with cautious enthusiasm. Council Member Aisha Muhammad said she hoped the additional revenue could help fund transit and housing priorities in districts that have felt left out of the city’s recovery. “Money generated by Foundry Row’s boom should help pay for the things that make the rest of the city livable too,” Muhammad said. “I don’t want this to just become an argument for cutting taxes on the same companies that are already thriving.”
Dr. Samuel Iyer, the Bellwater State University labor economist frequently consulted by the city, urged caution about treating the projection as a permanent shift. “Biotech revenue is lumpy,” Iyer said. “A single failed clinical trial or a funding round that doesn’t materialize can erase a good chunk of this growth in a single year. I’d budget as if this is a good year, not a new normal, until we see it sustained for longer.”
I’ve watched this city celebrate a hot manufacturing quarter before and then get blindsided when the jobs left for good. I’m glad Foundry Row is generating real money for the city, but I want us to bank some of this rather than spend all of it as if it’s guaranteed to repeat.
Dr. Samuel Iyer, Economist, Bellwater State University
Where the money might go
Whitfield said his office would recommend directing a portion of the unanticipated revenue into the city’s reserve fund, which has not fully recovered from spending during the manufacturing downturn two decades ago, while leaving the remainder available for council to allocate during the coming budget cycle. He declined to say how the office would split the recommendation between reserves and new spending until the formal budget proposal is presented.
Theresa Nakamura, executive director of the Bellwater Chamber of Commerce, said her members would be watching closely to see whether the council treats the windfall as a one-time bonus or a sign the city should reconsider its broader tax structure for growing employers. “Nobody in the business community is asking for a tax cut,” Nakamura said. “What we’d like is some predictability, so companies that are expanding here can plan five years out instead of wondering what next year’s budget debate will bring.”
Council Member Gary Petrowski said he intended to push for a share of the new revenue to go toward treatment funding for Cedar Hollow residents affected by the opioid epidemic, arguing the district has not benefited directly from the biotech boom despite sitting a few miles from Foundry Row. “I’m glad the number is good,” Petrowski said. “I just don’t want good numbers to become another reason my district gets skipped when it’s time to spend them.”
Council Member Luis Bettencourt, whose Foundry Row district is generating much of the new revenue, said he hoped some of it would be reinvested locally, including funding for workforce training programs aimed at closing the skills gap that biotech employers frequently cite as a constraint on further hiring. “These jobs pay well, but only if our residents can actually get hired for them,” Bettencourt said. “I’d like to see some of this money go toward training, not just reserves.”
Whitfield said the full budget proposal, incorporating the updated revenue projections, would come before the council within the coming weeks, kicking off what he expects to be a lengthy debate over how to balance new spending against building up reserves. “This is a good problem to have,” he said. “But it’s still a problem that requires discipline, not just a celebration.”
Council President Walter Kowalczyk said he wanted the council to resist the temptation to treat the projection as settled fact until at least one more quarter of actual collections confirms it. “I’ve seen revenue projections get revised downward before, and I don’t want us spending money we’re still only forecasting,” Kowalczyk said. He added that he expected the budget debate to stretch well into the coming weeks as council members weigh competing proposals for how to use the additional funds.