News Articles

Voters agree to TIF

By Michael Kane / Staff Writer Wednesday
October 27, 2004

MAYNARD - Months of discussion condensed into an hour-long debate before more than 260 voters decided Maynard should give a Tax Increment Finance Agreement to the owner of the Metro West Technology Park at 129 Parker St.


One-hundred-sixty-nine voters opted to allow John Wolters Jr. a 20-year TIF agreement with the town; 94 residents voted against it.


"It says 'welcome to Maynard,'" a happy Wolters said. "We're open for business."


Monday night, arguments for and against the agreement echoed those made at meetings with selectmen, the Planning Board, the Finance Committee and the Voice of Maynard that Wolters and his consultants have attended over the past few months..


In the weeks preceding Town Meeting, members of the Finance Committee and the Board of Assessors have spoken in favor of the agreement. A letter of support from the Assabet Valley Chamber of Commerce was also read.


In a PowerPoint presentation titled "An Opportunity for Growth," Selectman Chairman Robert Nadeau highlighted the position of the Selectmen.


According to Nadeau, the agreement is good for the town because it is expected to bring a mixed economic base that will help shift more of the tax burden from homeowners to commercial property owners as commercial values increase.


"We perceive the TIF as an economic development tool," Nadeau said.


Nadeau made the case by looking at economic figures from 1985 to 2004.


In 1985, Nadeau said, there were 16,000 people working in Maynard. By 1994, as Digital began moving out, the number was down to around 6,000, where it has remained for the last 10 years.


In 1994, the residential property values in Maynard were about $400 million. Now, that value has climbed to $1 billion, while in the same time the values of commercial/industrial properties has remained virtually stagnant.


The main driver of what little commercial/industrial increase occurred was Clock Tower Place, Nadeau said. Assessor Richard Downey supported Nadeau's assertion by noting most commercial values have remained stagnant while Clock Tower's value has increased.

"Some think TIFs cost the town money," Nadeau said. "In this case, and in most cases, Tax Increment Finance plans result in more taxes coming into the town."


Downey noted the current value of Clock Tower Place is about $42 million. When it was sold, it was assessed at $3 million.


With reductions in state aid and local receipts, Nadeau said the town needed to do something to grow the tax base.


Nadeau also said taxes paid by Clock Tower Place exceed the estimates made when that TIF went before Town Meeting in the 1990s.


In addition to economic stimulus, discussion Monday focused on competition: The number of communities that have become TIF eligible within a 30 mile radius of Maynard has increased. Because the TIF applies to new development, Wolters said many companies are choosing communities with TIFs, where it is cheaper to relocate.


He was later supported by Downey, who said many of the towns giving TIFs now are closer to routes 495 and 128, making for faster commutes. This mean a happier workforce, Wolters has said.


Related to travel time, Downey responded to criticism of the number of jobs that may go to local residents by saying a company which needed overtime filled was more likely to get it by hiring local employees than those who had to drive great distances.


Opponents of the deal, inclduing Finance Committee member Diane Dahill, questioned what the TIF gave Maynard. Dahill named other communities that received more money and a better promise for jobs within the wording of the TIF itself. She also questioned how Wolters can estimate how much money will be invested in the property when he has no tenants yet.


Dahill also noted that TIFs, if written for a 20 year time-frame, make the developer eligible for state tax credits as well.


"Every time you give these cuts you are also affecting state taxes on another level," she said.


Dahill and others said they were concerned with the length of the TIF.


Resident David Brown said voters were not given all of the information they needed to make the decision. He noted selectmen or Wolters should have told voters how much Wolters planned to invest in the property if the TIF did not pass.


Brown and others argued it was the wrong time for a TIF, noting the economy is growing and Wolters may not need it to lease the property.


The agreement that passed still needs state approval. If it gets the approval, it is due to take effect July 1, 2005; the start of fiscal 2006.


Wolters estimates about $16.5 million in new investment over the life of the agreement. About $3 million will be immediate, with work to the entrance and brick facade. He estimates another $6 will be spent by tenants making upgrades. As the agreement goes on, Wolters estimates another $7.5 million will be spent by tenants.


At some point, one or two of the buildings may be replaced.


All of that work will be subject to tax abatements in the agreement. Starting next July, work done would only be taxed at 5 percent. Thereafter, taxes on new development increase 5 percent each year until 2021 when the abatement drops from 25 percent to 2 percent for the final five years of the contract.


Over the life of the TIF, Wolters has agreed to give about $70,000 to the town. That money will be placed in a gift account under the selectmen's control. In 2006 and 2012, the monetary disbursements will be $10,000. Other years it will be $5,000 until the money is paid in full by 2017.


The contract also calls for Wolters to pay $3,500 for a fire protection engineer for any project over 30,000 square feet.


Part of the opposition Wolters has faced stems from his plan to have the area rezoned. Early on, rezoning the area to include some retail stores was tied to TIF benefits, a clause that was later removed.


Since then, Wolters has been working with the Planning Board to develop a new zoning area that would allow certain retail in industrial zones. Uses could include hotels, restaurants, a gym and a grocery store.


That effort, if it makes it out of Planning Board meetings, would also need Town Meeting approval.


Immediately after Monday's vote, Wolters said his next step is to "bring the property to market with a TIF."

© 2004 Beacon Villager