Tax incentives a factor in Virgin Pulse choice to grow in RI

By Tessa Roy
Posted 12/21/16

By TESSA ROY Rhode Island leaders convened Thursday to celebrate the expansion of Virgin Pulse, a company specializing in health and wellness technology for workplaces in the state. The company acquired ShapeUp last year, and this expansion is expected

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Tax incentives a factor in Virgin Pulse choice to grow in RI

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Rhode Island leaders convened Thursday to celebrate the expansion of Virgin Pulse, a company specializing in health and wellness technology for workplaces in the state. The company acquired ShapeUp last year, and this expansion is expected to bring 300 jobs to the state over the next three years.

The company’s decision to stay in Rhode Island occurred thanks in part to the Qualified Jobs Incentive Act passed by the General Assembly under the leadership of Speaker Nicholas Mattiello in 2013.

The Speaker said the bill “helps the state of Rhode Island attract jobs without any cost to the taxpayers” as “the credits are not granted until the tax revenue is generated.”

Mattiello acknowledged there is still more work to be done in terms of job growth but said the Virgin Pulse expansion was indicative that the state’s economy is moving in the right direction.

“You have to have a competitive environment and you have to have the tools to be competitive with other states. That’s a program that will assist us in generating more economic activity and which will be conducive to job growth,” he said.

At a press conference on Thursday, Rhode Island Commerce Secretary Stefan Pryor said Qualified Jobs would allow a “pledge back” of $2.5 million to Virgin Pulse in personal income taxes and $3.2 million in Rebuild Rhode Island tax credits. Tech and IT support, software engineering, sales and account positions, membership support and generally “an entire array of jobs” will be available to Rhode Islanders due to the expansion. The new 29,000-square-foot facility will be located in downtown Providence and employees will see a $73,000 median annual salary, Pryor said.

While Pryor didn’t name the location of the Virgin Pulse office, according to a reliable source the company is looking to locate at 75 Fountain Street in what was formerly totally occupied by the Providence Journal.

Additionally, Governor Gina Raimondo said the company’s expansion would generate an additional $10.5 million in revenues to the state and nearly $60 million of additional GDP once they complete their full hire.

Virgin Pulse president and COO David Osborne, Senate President M. Teresa Paiva Weed, Senate Majority Leader Dominick J. Ruggerio, Mayor Jorge O. Elorza and Virgin Pulse Chief Medical Officer Dr. Rajiv Kumar joined Raimondo and Pryor in the celebration of the expansion.

Osborne said the main reason for picking Providence was the ability to be in a metropolitan area that was less expensive than other options like Boston or New York. He also said he likes to hire “high potential, entry-level” individuals, so access to recruiting at area colleges and universities was important.

Asked if T.F. Green Airport was a factor, Osborne said, he knows of the convenience of Green, adding, “If it flies to Atlanta it’s great.”

The proximity to T.F. Green Airport additionally made an impact on location decisions.

“We are absolutely thrilled to be here and to expand the Virgin Pulse name. It’s a great brand [for] the state of Rhode Island and City of Providence,” Osborne said.

Providence wasn’t the original plan – Boston was the preferred option. But Kumar said the governor and her team crafted a very “customized pitch” to Virgin Pulse on why they should consider Providence. When it comes to pitching companies and businesses to Rhode Island, Governor Raimondo is “nailing it,” Kumar said.

“She actually picked up the phone and proactively reached out,” he said, adding that Raimondo asked what it would take for them to not only keep jobs in the state but to grow them as well.

Joe Paravisini, who has worked with ShapeUp for six years, said he “couldn’t be more happy” about Rhode Island and said it will allow them to continue making software that will “change the world.”

Weed said a global company like Virgin Pulse choosing Providence over anywhere else in the world “was something we can be proud of” and that the state and company are a good fit.

“I really believe that Virgin Pulse perfectly compliments some of RI’s areas of economic potential that’s been outlined and planned for,” said Weed.

Elorza seconded her sentiments and guaranteed the company would be satisfied with its decision.

“There is no reason why here in Providence and throughout the state, we can’t have these signature projects that make Providence the top talked about…city in the United States,” he said.

Previously, Raimondo had announced that Wexford/CV Properties has secured key tenants, including Cambridge Innovation Center, for their anchor property in the 195 Innovation and Design District. On Monday, Raimondo also announced that Johnson & Johnson had chosen Providence for a Health Technology Center that is expected to bring 75 more jobs. The Center also intends to apply for incentives under the Qualified Jobs Incentive Act and the First Wave Closing Fund, according to a press release from Raimondo’s office.

"Rhode Island has a strong network of educators, employers and decisionmakers that are advancing the integration of different health-related technologies," said Steve Wrenn, Global VP-Chief Applications Officer for Johnson & Johnson in a statement. "The I-195 corridor is uniquely suited to support Johnson & Johnson's new health technology center, and Rhode Island gives us access to the economic development tools and university assets we need to stay competitive in the rapidly growing health tech space. As a company with locations and options worldwide, we are very pleased with the opportunity the Ocean State provides for this new center."

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