Town meeting gives nod to tax break for high-tech firm
By Don Eriksson
Staff Writer
Groton Landmark,
October 31, 2008
(Emphasis added by the Campaign)
PEPPERELL -- Jale LLC and Masy Systems Inc. (property owner and the business, respectively) have been granted a long-sought 20-year tax exemption on incremental increases in value to their portion of their Lomar Park property by Special Town Meeting voters.
The Tax Incremental Financing (TIF) agreement gives the high-tech firm a declining-scale tax break on value-added improvements that are part of about $4.7 million owners John and Laurie Masiello will be investing in six Lomar Park condominiums they purchased.
Property taxes currently paid by the firm do not decrease.
In a worst-case scenario, the town would lose about $1,200 annually in tax revenue. A loss of about $1,000 is more likely.
"By no means is the town losing anything," Selectman Joseph Sergi assured voters, when compared to the local hiring Masy Systems does -- five employees since the TIF process began last February -- and the local spending done and taxes paid by its staff.
Masy Systems will also receive a 5 percent state tax credit on equipment and a 10 percent credit on buildings.
The firm's buildings as well as the former paper mill site will likely become designated as an Economic Opportunity Area once Gov. Deval Patrick signs the town's application to become an Economic Target Area (ETA), joining Groton, Ayer, Devens and Shirley.
As the Oct. 20 town meeting began, Rep. Robert Hargraves said the House and Senate had approved the ETA application just that day and it would be on the governor's desk later in the week (ending Oct. 24).
It is Pepperell's first TIF agreement and is seen by officials as a pro-business stance. The TIF agreement not only retains a growing bio-tech company whose customers include Bristol-Myers Squibb and Shire, which are locating on Devens, but may also encourage further industrial growth which can only help the tax rate.
Town administrator Robert Hanson, in explaining what would happen if Masy moved before the 20 years is up, said in that case the town can request the Massachusetts Economic Assistance Coordinating Council decertify benefits and rescind the tax abatement.
"Clearly there is more space in Ayer (which has been trying to attract Masy Systems) than in Pepperell," Laurie Masiello said. "Our business is growing. We plan to hire 15 more (and with the TIF) they must be local people."
Ayer has granted nine TIFs, and last week its officials attended a grand opening for a 10th, L3 Communications Corp., manufacturer of first-response vehicles and radomes.
Joan Goddard asked if Pepperell has a standard TIF offer to make to future businesses.
Sergi said agreements vary case to case.
"We're very fortunate to have Masy. The governor just proposed a $1 billion initiative for bio-tech. Bristol-Myers Squibb and Shire are coming to Devens. Masy Systems will feed off them and can only grow," he said. "They will also bring industry that can feed off them."
Diane Carr, whose children work for Masy Systems, said the Masiellos have spent "big money" in Pepperell and many of their employees live in town.
"Lomar Park never fulfilled its promise. Industry adds to the tax base," she said.
The town meeting vote was unanimous.
Masy Systems develops, sells and rents sensitive temperature-sensing and regulating equipment for the bio-tech industry. Part of its expansion includes offering storage capability to pharmaceutical firms.
