NH House Ways and Means Committee members hear from Kamen on ARMI

Entrepreneur’s sales pitch seems to change some state reps’ minds on proposed tax break

At its hearing last week, the NH House Ways and Means Committee seemed a little leery of a bill that would give a tax break to businesses and student loan forgiveness to employees associated with the Advanced Regenerative Manufacturing Institute, the initiative taking shape in the Manchester Millyard.

And when the hearing continued on Tuesday, that skepticism continued. “The state will be bombarded with every new development asking for tax credits, each one telling us they might go to California,” said Rep Jordan Ulery, R-Hudson.

But later, the committee members walked two blocks down Concord's North Main Street to hear Dean Kamen, the inventor, entrepreneur and mastermind behind ARMI, make a pitch for the initiative while being treated to a modest lunch at the offices of Rath Young & Pignatelli, the firm lobbying for the initiative.

“Holy cow,” Ulery said, as the size of the project began to dawn on him. “Now I see how it works.”

“I will do what I can to make this successful,” said the committee’s chair, Rep. Norman Major, R-Plaistow, immediately after the presentation.

This meeting was not supposed to be “dealing with legislation,” explained lobbyist David Collins when introducing Kamen to the very committee that will soon be voting on Senate Bill 564. The bill, which easily passed the Senate and has the full support of Gov. Chris Sununu, would exempt ARMI-affiliated companies from 10 years of businesses taxes and fund a $5 million bond to help pay off the student loans of those who work in the industry for five years in New Hampshire.

Skepticism at hearing

Tuesday’s hearing started with the testimony of Dan McGuire, a former state representative and an ardent foe of any targeted tax breaks.

“It’s wrong for a business to put that kind of pressure on the state of New Hampshire,” he said. “To me, it’s a bad sign that they are bothering with it.”

There seemed to be more sympathy for his point of view than that of Department of Business and Economic Affairs Commissioner Taylor Caldwell, who called ARMI “the greatest single opportunity to bring this generation’s manufacturing back to the state.”

Some lawmakers questioned the bill’s constitutionality. Others worried that the state would be promoting businesses that fail.

“Another industry is going to come forward with a similar proposal. What if we say no?” said Rep. Paul Henle, D-Concord. “We need some kind of yardstick.”

“I won’t ask for any additional industry tax exemptions for five to eight years,” blurted Caldwell. “How is that?” Though he later said, “I was kind of joking.”

Kamen’s pitch

At the lunch, Kamen seemed to speak directly to these concerns by emphasizing what a unique opportunity ARMI is.

But told the story about how he was approached by a company that could “magically make cells grow up to do whatever they want … ‘Oh I want to be a lung.’ ‘I want to be a kidney.’”

The problem, he said, was they were doing it one organ at time – not enough to keep up with the growing demand. There are 400,000 people on the organ transplant waiting list, he said, and a quarter of them will die waiting. And even those who receive a donated organ face a significant risk of rejection and have to compromise their immune system, with deadly consequences. And the treatment of chronic conditions while they wait actually costs much more than the transplant.

“We needed to get this out of the petri dish and into manufacturing,” he said.

And that’s why the U.S. Defense Department awarded ARMI an $80 million grant.

Since then, ARMI has attracted commitments of $213.5 million, from dozens of companies, including Merck, Rockwell Automation, MilliporeSigma and Advance Solutions, which has plans to move from Kentucky to New Hampshire and create 80 jobs.

It has attracted 26 universities and research institutes, including Harvard, Yale, Dartmouth and the University of New Hampshire (the Manchester Millyard campus is devoting two floors to train people in the industry.) It is working with UNH Law School to tackle the ethical and legal issues involved.

It is developing 3-D printing of cardiovascular tubing, working with drug companies so they can test real organs, setting up a system to automate processes, and hiring some top-notch officials from the Food and Drug Administration to smooth approvals by the agency.

Things have progressed so quickly, said Kamen, “that the risk that this isn’t going to work is damn close to zero,” he said.

The only risk now, he said, is that the industry will be enticed to leave New Hampshire to go to a state that offers bigger financial incentives.

Kamen said he knew New Hampshire didn’t have much money to spend, but asked the governor if he could “come up with some clever enticement.”

That enticement came in the form of SB 564, said Kamen: promising companies that if they move to the state they would face “the burden” of paying taxes at first and to help “smart, educated workforce” with student loans “if they come here and live here for a while.”

“Whatever the state does,” he said. “I hope it does it very quickly.”

Manchester could become the “Silicon Valley of regenerative medicine. It would be awesome, and it should be here,” said Kamen.

He warned, however, if the state doesn’t do anything, “there will still be a massive regeneration industry, but it won’t be here.”