In the first of a series of discussions between the city of Ann Arbor and pharmaceutical giant Pfizer Inc., City Council members debated last night with company officials about possible benefits and problems with the company"s possible consolidation and expansion of their Ann Arbor laboratories.

The University and Pfizer, a global corporation focusing on the research and development of new drugs, reached a $27 million agreement for a 55-acre parcel of land near North Campus two weeks ago. The agreement was later approved by the University Board of Regents.

The deal would allow Pfizer to relocate current employees to its primary Ann Arbor facilities at Huron Parkway and Plymouth Road. The company also hopes to expand that facility to allow for space for an additional 600 jobs.

Pfizer Global Research Development employee Sue Zimbelmann told the council the situation between Pfizer and Ann Arbor is unique. "Many of our other sites are not in a position where they have to acquire land to grow," she said.

There are still some kinks both on the side of the company and on the side of the city that must be worked out before Pfizer starts the expansion.

The biggest issue facing the possible agreement is a tax break Pfizer has proposed to the city. The company is asking for a 50 percent abatement on the potential $800 million it said it may invest over the next six to 12 years.

The abatement would decrease the company"s cost of doing business in Michigan and is the key to future relationships between Ann Arbor and Pfizer.

If the abatement is not approved, Pfizer would be forced to look at land and proposals in other areas, said David Canter, the senior vice president of Pfizer Global Research and director of the Ann Arbor Laboratories. "The frustration is that if we continue to invest and then suddenly we cannot build any further without knocking down something that is already there, it is just an endless vicious circle," Canter said. "I would have to look seriously at alternative options, and they do not necessarily involve the city of Ann Arbor."

Canter wouldn"t comment on whether the alternative options would involve the complete relocation of Pfizer from Ann Arbor and added that Pfizer"s current economic contribution to the area would greatly increase if the abatement is approved.

The benefits of the company"s expansion, Canter said, include $450,000 per year in additional property taxes and additional capital circulating in the local economy that would stem from the additional 600 jobs.

Dan Matthews, from the Plante & Moran accounting firm, estimated that over the next 15 years, the additional jobs could result in a total economical impact of more than $200 million.

Matthews added the figure was a grossly conservative estimate. But council members argued that despite benefits, there will be costs, including problems which currently have no proposed solutions, such as increased traffic and property values.

"The city is pretty much built out," said Councilwoman Jean Carlberg (D-3rd Ward).

Councilman Stephen Hartwell (D-4th Ward) said nobody on the council is jumping to conclusions about the benefits and costs of the proposed plan.

"As far as I know, no one has really formed a strong opinion in any way," he said.