Rebuild Rhode Island Tax Credit Recipients
Virgin Pulse is a health and wellness tech company that provides an on-line and mobile platform, tools and resources to employers and other organizations to engage their employees and members. Virgin Pulse serves over two million employees from over 250 clients. The company’s products suite includes “Core” – a personalized health risk management program, and “Hub” – a centralized employee engagement and communication portal. Currently, Virgin Pulse operates out of a leased facility in Framingham, MA. In February 2016, Virgin Pulse acquired ShapeUp, Inc., a Providence-based technology company that specializes in healthy lifestyle support through proprietary software. ShapeUp will merge operations with Virgin Pulse and consolidate under the Virgin brand by year end 2016.
Virgin Pulse is proposing to grow the existing ShapeUp presence in Providence by creating up to 292 new jobs over the next five years. The new Virgin Pulse operation will initially consist of approximately 29,000 square feet in downtown Providence, with plans to increase to approximately 88,000 square feet in order to accommodate the anticipated growth. These 292 total new full-time jobs will command an estimated median annual salary of $73,000 for sales, client success, technology and general administrative functions. The new space, in total, will require an estimated $10.8 million investment for build-out.
The Corporation is recommending awarding the Company an incentive package consisting of tax credits under the Qualified Jobs Incentive Tax Credit Program and the Rebuild Rhode Island Tax Credits.
- The Company has entered preliminary negotiations with the building owner of 75 Fountain Street in downtown Providence.
- In response, the Corporation has negotiated an incentive package to the Company valued at approximately $6.1 million, consisting of Qualified Jobs Incentive Tax Credits and Rebuild Rhode Island Tax Credits
- Based on current salary estimates, Virgin Pulse would be eligible for annual Qualified Jobs Incentive Tax Credits of approximately $894,739 by year 2021, when all 292 full-time positions are projected to be filled. These personal income taxes would not otherwise occur in Rhode Island. The recommended term of the tax incentive agreement is five years, and the Company has indicated that it will commit to maintaining the new jobs in Rhode Island for at least the six years required. The total credits are anticipated to be approximately $2.5 million based on the projected hiring schedule.
- Based on current project estimates, Phase I of the proposed project would be eligible for Rebuild Rhode Island Tax Credits of about $1,006,416 over five disbursements. Phase II of the proposed project would be eligible for Rebuild Rhode Island Tax Credits of about $2,234,182 over five disbursements. The total Rebuild Tax Credits awarded shall not exceed $3,240,598. In addition, based on current project estimates, the Applicant would qualify for an estimated $341,798 in sales tax exemption under the Rebuild Program. Tax Credits distribution contingent upon sponsor spending.
- Based on a third-party analysis, direct and indirect economic and fiscal benefits of the proposed project include the estimated increase in annual state GDP (in 2021) of $58.9 million, the estimated associated job creation, and the gross increase of approximately $10.5 million in personal income, sales and business corporation tax revenues during the construction phase and ongoing operations during the six years following the completion of the project.