WESTFIELD – The City Council, following a rigorous debate last night, voted 11-2 to approve a five-year tax cut for a city company planning to invest $7 million in its North Elm Street facility.
Prolamina petitioned the City Council for a special tax assessment, a state Department of Revenue program that provides front-loaded tax relief in exchange for substantial private investment and both job retention and creation.
Prolamina currently employs 256 local residents with a payroll of $17 million and will create a minimum of an additional 12 positions when new equipment is installed at the plant as a condition of the STA.
Prolamina is planning to invest nearly $7 million in its facility at 132 North Elm Street, with $4 million to be used to expand the plant by 8,700 square feet, renovate another 22,000 square feet, and to improve the roof and façade of the building on North Elm Street, the city’s northern gateway.
Prolamina would also invest $2.95 million in new equipment to position the company for the market. Prolamina makes products for the food and health industries.
Prolamina, formerly Jen-Coat, has been in the city since 1972 when it was located on Mainline Drive and it has been located at the 132 North Elm Street location for more than 30 years. The company also has a facility, currently used as a warehouse but that could be reconfigured in the future as a production plant, on Ampad Road, which is not part of the STA approval last night by the City Council.
At-large Councilor Brian Sullivan, chairman of the council’s Legislative & Ordinance Committee which endorsed the STA, said “the return on (the city’s) investment will occur in the fourth year of the STA when Prolamina will pay a tax of $175,439.”
At-large Councilor David A. Flaherty, who voted against the STA, countered Sullivan’s argument while urging the council members to reject the STA, citing the loss of $168,500 in the first year when the firm will receive a 100 percent tax break.
“I’m thrilled for Prolamina. They are a great company, but the city can’t afford this,” Flaherty said. “They don’t need this money to make this project fly. Only $2.3 million of their investment is taxable.”
“If we’re doing a tax decrease, we should be doing it for everybody,” Flaherty said. “The city can’t afford this. We don’t have $168,500. I don’t think it‘s fair for them to ask us to tax everybody else in town (to make up the difference).”
Ward 6 Councilor Christopher Crean said that the council has used STAs in the past that have benefited the city as companies prosper.
“We’ve been doing STAs for a long time throughout the city and have been successful,” Crean said. “I’m not going to sanction them for being a good company. I’m not going to sacrifice 256 jobs. I hope they stay in Westfield.”
At-large Councilor Cindy Harris, who also voted against the STA, said the City Council is “opening the floodgates” to future STA proposals.
“This company is setting a precedent. We will have company after company (seeking similar tax cuts) that will erode our tax base,” Harris said.
At-large Councilor James R. Adams said that the city “can’t afford not to do this. This is $17 million coming into the city, people raising their families, paying taxes and mortgages.”
“We should vote (to approve STAs) for any company that wants to invest $7 million in the city and bring good jobs,” Adams said. “We don’t want any more Old Colony and Savage Arms. We can’t afford for (Prolamina) to leave.”
Sullivan said Prolamina is planning to sign a 20-year lease package with the building owner.
“We’re taking a hit in the first year, but these guys have been here a long time. All of their employees are local,” Sullivan said. “I have to look at the positives. I’d rather lock them in at 20 years”
“I feel it’s the right thing to do. Prolamina deserves our support,” Sullivan said. “I hope that other companies will make this kind of investment and stay here.”
