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IPG Photonics wants to change TIF agreement with Oxford


July 28, 2011


OXFORD -- IPG Photonics Corp. representatives informed selectmen July 26 that they would like to adjust the company's tax incremental financing agreement to include a planned multi-milliondollar building in town.


Paulo Sinni, company vice president, treasurer and controller, said the company has outgrown its building and needs additional space. He said a "101,500-square-foot, on-site expansion" is being proposed and would require an $18.1 million investment by the company.


"Our first choice is to expand in Oxford, but we have been approached by Connecticut communities," he said.


Lynn Tokarczyk, president of Business Development Strategies Inc., said the company had brought more than 600 jobs to Oxford since coming to town in 2000, and the expansion could bring 175 more.

IPG first entered into a TIF agreement with the town in 1999, prior to construction of the company's world headquarters at 50 Old Webster Road. The 20-year TIF agreement taxed the company at "10 percent of the value of their improvements" for the first seven years, starting in 2000, according to Christopher T. Pupka, assessor.


In 2007, the tax level rose to 15 percent, and so on, up to 85 percent this year, 90 percent in 2012, 95 percent in 2013, 99 percent in 2014 and 100 percent in 2020.


Mr. Pupka said that the company's tax bill in 2000 was $2,585 on land alone, since there were no buildings on the property. This year's 2011 tax bill for IPG was $189,983.


Company literature refers to IPG as "the world's leading manufacturer of high-performance fiber lasers and amplifiers" with sales or manufacturing facilities in Michigan, California, Alabama, Canada, Germany, Russia, Italy, India, China, South Korea, France, Singapore, Spain and Japan.


Rosemary Scrivens, regional director for the state's Office of Business Development, said it was up to town meeting to approve a new or adjusted TIF, but that the required Economic Opportunity Area designation for the IPG site would only be good for a total of 20 years, so the "second phase" of development would only be eligible for a TIF for seven years.


Ms. Tokarczyk said the company was looking for a $60,000 per year tax break for those seven years.


"The town never loses a dime. This would help keep jobs in Massachusetts, and the town would still get $200,000 per year in taxes from IPG."


Selectmen voted unanimously to reserve a spot on the fall town meeting warrant for the requested TIF, but said they wanted more information before making a recommendation.


Selectmen also held a lengthy discussion with the School Committee on where to relocate the school administration offices, which are in a house at 5 Sigourney St. behind Town Hall.


Brenda A. Ennis, chairman of the School Committee, said the Sigourney Street building has mold and mildew problems and is not appropriate for continued use, and since the heating system is not functioning, the offices must be vacated by the Oct. 15 start of the heating season.


She said her committee had thought the offices would be relocating to the Community Center, but selectmen had proposed relocation to the high school to avoid paying rent.

Town Manager Joseph M. Zeneski said the School Department would have to pay $3,300 per month to the Community Center enterprise fund if school administration offices locate there.


Mr. Peterson said, "We will be the first town department to rent from the town. This will set a precedent."


Mr. Zeneski compared the rent payments to the enterprise fund to school sewer bills paid to the sewer enterprise fund.


Mrs. Ennis said that the committee had voted earlier in the evening not to locate the administration offices in any local school building, but later said, "I will entertain a motion to reconsider if it is the best option."


Committee member Marc E. Peterson suggested a joint committee be formed to discuss the relocation of the offices. Selectmen agreed.