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Quest Diagnostics to open Marlborough lab

Facility to bring 1,200 jobs to city

In a major boost to the suburban Boston real estate market, Quest Diagnostics Inc. is planning to open a new laboratory complex in Marlborough that will bring nearly 1,200 jobs to the city over the next few years, officials said Thursday.

The New Jersey-based provider of medical testing services said it will spend more than $64 million to renovate a portion of the former Hewlett-Packard Co. complex on Forest Street. Quest has signed a letter of intent to lease 200,000 square feet for a laboratory and administrative facility to support its Northeast operations.

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The move will bring another major employer to Marlborough, which also stands to benefit from a planned office relocation by TJX Cos. into property formerly occupied by Fidelity Investments. The two deals promise to fillgaping office vacancies in the city and lift the sagging Interstate 495 real estate market, which has struggled to recover following the economic downturn.

“This is a big win for the city of Marlborough,” said Kevin Hanna, a principal with Cassidy Turley, a commercial real estate firm. “This is a very big tenant for that particular corner of the market.”

If the deal is completed, Quest’s laboratory complex will allow the company to consolidate operations in a single facility, moving ­hundreds of employees from existing laboratories in Cambridge and Worcester.

The complex, to be developed over the next couple of years, will also host new operations Quest gained through its recent acquisition of the clinical outreach laboratory at UMass Memorial Medical Center in Worcester.

Marlborough is offering Quest a 15-year tax break to help offset the costs of opening its new laboratory. Over the first few years of the tax agreement, the company will also hire an additional 246 employees to work in Marlborough. The value of the tax break has not been disclosed.

“This proposal is a significant economic development coup for the city,” Mayor Arthur Vigeant wrote in a letter to the City Council, which is scheduled to take up the tax agreement Monday night.

The company is leasing part of HP’s former building at 200 Forest St., which contains about 535,000 square feet and was vacated by the computer company more than two years ago.

It remains unclear what will happen with the remaining space in the building or the surrounding property, which includes a second 190,000-square-foot office building.

The complex, on 109 acres off I-495, was built in the early 1970s and has been listed for sale in recent years. Its early occupants included RCA Corp. and Digital Equipment Corp. The property is now owned by Atlantic Management LLC.

Quest, which bills itself as the world’s leading diagnostic testing provider, has also been pursuing tax incentives from the state’s Life Sciences Center, which offers deals to companies in return for creating jobs in Massachusetts.

“The local and state tax incentives will mitigate the generally higher costs of doing business in Massachusetts and position the company for future growth,” Timothy Anderson, a managing director for Quest, wrote in a letter to Vigeant.

For the first nine months of this year, Quest has recorded more than $5.7 billion in revenue, a 1.1 percent increase over the same period in 2011, according to its most recent financial filings.

Casey Ross can be reached at cross@globe.com.
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