WILMINGTON, MA — On Monday night, Wilmington Selectmen unanimously endorsed a Tax Increment Financing (TIF) agreement between the town and Analog Devices.
Analog Devices, which is the town’s largest employer, is looking to expand in Wilmington with the construction of a 174,000 square foot three-story LEED certified office building, construction of a 52,000 square foot HUB building, a 215,000 square foot three-story parking garage, and renovations to existing buildings. The total investment is estimated at nearly $157 million.
Any new construction, however, is contingent on the company and town coming to terms on a Tax Increment Financing (TIF) agreement.
Under a TIF, the town continues to collect 100% of existing real estate tax revenue, but allows for a tax exemption based on the increased assessed value due to property improvements. The tax incentive is a discount on projected future taxes during the life of the proposed TIF.
Under Analog Devices’ initial proposal, the company’s property taxes on planned new construction would be reduced by approximately $17.9 million over the next 20 years.
The key terms of the final agreement, as relayed by Town Manager Jeff Hull, include:
- Tax relief of $4.3 million based on value from new construction only with a maximum duration of eight (8) years whichever comes first;
- $700,000 to be waived in building permit fees which would be charged on this new construction; (Based upon building construction cost estimates provieded by Analog and their consultant, the town estimates the town revenue from building, electrical and plumbing permits to be $1,180,4803. The Town would forgo $700,000 in building permit fees as part of the TIF.)
- TIF to begin in the year in which there is taxable value from construction on the property;
- Analog commits to create 50 new jobs over five (5) years;
- Analog committees to relocate 450 employees from their Chelmsford and Norwood facilities to the newly expanded Wilmington campus;
- Analog commits not to file for a property tax abatement during the life of the TIF;
- Analog commits to invest $167 million in their Wilmington campus;
- Schedule for an annual percentage on new construction to be:
- 95% reduction in taxes on value of new construction in Year 1
- 90% reduction in taxes on value of new construction in Year 2
- 85% reduction in taxes on value of new construction in Year 3
- 80% reduction in taxes on value of new construction in Year 4
- 75% reduction in taxes on value of new construction in Year 5
- 60% reduction in taxes on value of new construction in Year 6
- 50% reduction in taxes on value of new construction in Year 7
- 50% reduction in taxes on value of new construction in Year 8
Details of the agreement were successfully hammered out between Analog Devices representatives and the Town’s TIF group, which consisted of Selectman Mike McCoy, Selectman Kevin Caira, Finance Committee member John Doherty, Planning Director Valerie Gingrich, Town Assessor Karen Rassias, Assistant Town Manager Denise Casey, and Jeff Hull.
“The original 20 years and 17 million was really aggressive, but [this agreement] is something I’m more comfortable with,” said Selectman Mike McCoy. “Analog is the largest employer here in the community. There were talking about moving the company. This is a win situation for everybody…. We’re not getting divorced, we’re getting remarried.”
“I agree it’s a win-win situation for residents and Analog,” added Selectman Kevin Caira. “I think it’s a great deal.”
“This is an excellent agreement for the town and Analog Devices,” concurred Selectman Ed Loud. “Keeping [Analog] in town was important.”
“I was a little hesitant at the beginning, but after doing some research, I think this can benefit all residents,” agreed Selectman Greg Bendel. “The investment will pay huge dividends down the line for tax revenue for residents. It’s like we’re giving them a construction loan… Residents will benefit from this tax revenue down the road… This is a step in the right direction for economic development in town.”
Bendel asked the Town Manager to draft guidelines on TIF agreements before the board is presented with any future proposals. Hull agreed.
Selectman Mike Champoux abstained from the discussion and vote due to a potential conflict.
“You’ll be very proud of the investment we make. Having our headquarters here in Wilmington is going to be a win-win,” said a Analog Devices representative. “We like the way you guys do business. It’s part of the reason we wanted to stay in town.”
Residents still need to approve the agreement at Town Meeting on May 5. Residents will have an opportunity to learn more about the TIF agreement at a special meeting on Wednesday, April 25 at 7pm. Location TBD.
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