WESTFIELD – The City Council voted to approve a tax increment financing package for construction of a 85,000 square-foot warehouse and a 12,000-square foot office area off Union Street needed for expansion of the Boise Cascade BMD building material distribution facility.
The property owner, Ronald Schortmann, plans to invest $6 million to construct the new storage facility, while Boise will invest another $600,000 in equipment. Schortmann and Boise are currently negotiating a 20-year lease for the existing facility, as well as the new facility.
Boise currently has a workforce of 69 full-time employees and plans to add another 19 employees when the new facility is constructed.
Ward 6 Councilor Christopher Crean, a member of the Finance Committee, said the five year tax increment financing package will immediately increase revenue for the city. Under the terms of the TIF, Schortmann will continue to pay full taxes on the existing facility and will begin to pay taxes on the new facility next year when it is completed.
Crean said that it is a win-win package for both the city and one of the larger employers in the city. Schortmann/Boise will pay tax based upon 10 percent of the value of the new buildings the first year, 25 percent in the second year, 50 percent in year three, 75 percent in year four and 90 percent in year five.
That package will provide a total saving over the five year to Boise of $226,057, but will also yield new tax revenue to the city of $297,935. Schortmann’s property value will be increase by $2,606,600 based upon the value of the new buildings.
“The city will continue to collect all of the current (property) taxes and will get 10 percent of the new facility for the start of the agreement, so taxpayers are not paying for this agreement,” said Ward 2 Councilor Ralph Figy.
“At the end of the day, there is a substantial net gain (of revenue) for the city,” said At-large Councilor Matthew VanHeynigen.
At-large Councilor Cindy Harris said she opposed giving the TIF to a corporation which had gross sales of more than a billion dollars and that a national company should not need an incentive to improve their business model.
At-large Councilor David A. Flaherty said he would also vote against the TIF.
“We are in a financial situation where we can’t pass the cost of this TIF on to the taxpayers,” Flaherty said. “This is not a make or break deal for Boise.”
Ward 5 Councilor Robert A. Paul argued that the reason Boise and other companies want to be located in Westfield has nothing to do with the TIF- it is the advantages that the city, with its infrastructure, provide to those companies.
Paul said that the energy costs in Westfield are among the most advantageous in the state, that the city is located at the crossroads of major transportation routes, that access to rail, especially in Boise’s business operation, provides an incentive to locate in the city. Paul also cited the quality of education and the quality of life for employees and their families in the city.
The council approved the TIF by a vote of 11-2, with Harris and Flaherty voting against approval.
