WILMINGTON, MA — At Saturday’s Town Meeting, Wilmington voters will be asked to approve a Tax Increment Financing (TIF) agreement between the town and Analog Devices.
The agreement would pave the way for Analog Devices, which is the town’s largest employer, to consolidate its Massachusetts operation by expanding 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 Selectmen unanimously approved the deal in late March, but an affirmative vote at Town Meeting is still necessary.
“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 is 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.”
“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.”
The Town and Analog Devices held an informational forum for residents on Tuesday, May 1 at Town Hall. Company representatives answered questions about the proposal, provided an informational handout, and displayed poster boards presenting pictures of the current campus & conceptual renderings of the campus with the expansion. Michael Errera, General Manager of Wilmington’s Analog Devices location, and Town Manager Jeff Hull also offered brief comments to the audience.
Hull and Errera recently sat down with WCTV Executive Director Shaun Neville to discuss the proposed TIF agreement. Watch the 13-minute interview below:
—
—
“We’re looking to bring our Massachusetts-based employees under one campus,” Errera to Neville, noting Analog also has locations in Chelmsford and Norwood. “[With a new and improved campus], we want to continue to attract the best engineering talent from across the globe.”
“A number of communities across the state have begun frequently using the TIF program,” Hull pointed out. “While this is the first TIF that the town of Wilmington would enter into, I do believe it’s an appropriate mechanism to try to attract and maintain businesses like Analog.”
“Analog is our largest employer with 1,500 employees, and our second or third largest tax-payer. Clearly, they have a significant presence in town,” continued Hull. “We’d like to use the TIF to keep them here in town and make Wilmington their headquarters and bring in employees from other locations.”
“Community engagement and corporate responsibility are very important to Analog,” added Errera. “We have become part of the fabric of this town, and this town is part of the fabric of who were are.”
“We’re not asking for a discount on what we currently pay,” stressed Errera. “The TIF is meant to defray some of the upfront cost to this major investment. While we’re making the investment, remember that we’re still carrying the cost of the other facilities until we can get the new one built and get everyone consolidated.”
“While we’re waiving certain property taxes in the short-term, in the long-term, when the expansion is complete… it will greatly help us in terms of our long-term revenue, not to mention prospective jobs for Wilmington folks and the ripple effect of their employees using our local businesses. All are positive for the town,” said Hull.
When asked what would happen if the TIF agreement was voted down, Errera answered that while the company’s strongly preferred choice is to expand in Wilmington, they will be forced to consolidate their facilities elsewhere in massachusetts.
Like Wilmington Apple on Facebook. Follow Wilmington Apple on Twitter. Follow Wilmington Apple on Instagram. Subscribe to Wilmington Apple’s daily email newsletter HERE. Got a comment, question, photo, press release, or news tip? Email wilmingtonapple@gmail.com.
Wilmington Apple 