Drug maker Pfizer will infuse $1 billion into New York City’s ailing economy via the acquisition of a major midtown office building and the subsequent creation of thousands of jobs. The announcement marks the largest corporate expansion in New York City in the past two years, and gives the city’s economy a much-needed boost as Mayor Michael Bloomberg scrambles to shore up a massive budget deficit.

For $400 million, Pfizer will buy and renovate 685 Third Avenue along with its renovation of an additional 2 million sq. ft. of office space it already owns in Manhattan. Pfizer, the maker of Viagra, has continuously operated in New York City for 154 years.

"During a time of economic uncertainty, we are pleased to add good jobs in New York and launch a capital investment program that will bring substantial returns to both the city and the state," says Pfizer CEO Hank McKinnell. Pfizer and its employees’ combined tax payments to New York City and New York State now exceeds $100 million a year.

In addition, Pfizer has applied for nearly $1.4 million worth of grants from New York State. It already is receiving an incentive package from the city worth nearly $46.1 million provided that 4,300 jobs are added to its Manhattan operations by 2018. The jobs that Pfizer will be bringing into New York City pay an average of $150,000 per employee.

In March, Pfizer subleased 10 floors at 685 Third Avenue from Aon, which had relocated to the building after the 9-11 terrorist attacks destroyed its offices at the World Trade Center. The California State Teachers Retirement System bought the building in December 2000 for a reported $209.8 million.