A Fitchburg wire manufacturer has struck a deal with Leominster to expand its operations there through an eight-year tax deal.
Leominster's City Council last night approved a tax increment finance deal – or a TIF – with New England Wire Products that will bring 100 new full-time jobs to the city.
The 33-year-old company designs and manufacturers wire display racks for merchandise and will be moving into the former Mohawk Wire Building at 9 Mohawk Dr., which has been vacant for about three years. It's about three miles from the Fitchburg location.
Leominster's Economic Development Coordinator Lisa Marrone said she had been working with the real estate agent for the property owner, Indiana-based Belden Inc., for the past two years to find a buyer.
She said New England Wire had been looking at the property for a while and moved to buy it when the owner dropped the price. She said the company plans to buy it for $2.25 million later this month.
"To have this building owned and operated locally is really important to the city of Leominster. That's what we're all about: investment in the area," she said. "It's got a different nuance to it when you're not only talking to the president of the company, but he's got roots down here, and I think that adds more to the business base than just producing products out of there."
Marrone said it was a "seamless" deal because New England Wire was familiar with the area and that its moving into a building long used for similar purposes.
New England Wire said it will invest $1 million into new machinery and make $250,000 of capital improvements to the building, such as adding restrooms and infrastructure.
Marrone said assessors determined the $250,000 of improvements would add about $320,000 of assessed value to the building – which is already assessed at $3.65 million – so the company will get a tax abatement for the $320,000.
She said New England Wire will save about $25,860 over eight years. It will receive a full abatement for the assessed value of the improvements for the first year, adding 12.5 percent for the following seven.
The company's agreement with the city requires the building upgrades, job investment and machinery purchases to take place by June 30, 2016.
"So they're not getting the most lucrative deal from the city for what they're spending, but in this agreement, their incentive is going to come from the 100 jobs that the state will offer an incentive on," Marrone said.
At its March 26 meeting, the Economic Assistance Coordinating Council will determine the level of tax credits it will give the company for its promise of 100 jobs.
Marrone will be the fifth active TIF the city has in place, and they have all exceeded expectations.
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