BRIAN P. SULLIVAN
WESTFIELD – The City Council voted last week to restructure a tax incentive financing (TIF) package it approved last fall for a city manufacturing company seeking to expand.
The new agreement will reduce both the proposed expansion of Tell Tool, located at 35 Turnpike Industrial Road, and the tax reduction, but will not reduce the creation of 17 new positions proposed under the original package approved in November.
The Finance Committee recommended that the council approve the revised TIF following a presentation by City Advancement Officer Joe Mitchell.
“You can’t afford not to vote yes on this one,” Mitchell said in his opening comment. “Last November the City Council approved the Tell Tooll TIF based upon the plan to add 34,000-square-feet and invest $3 million, while creating 17 new jobs.”
JAMES R. ADAMS
“The plan has been modified, so now they will add 10,000-square-feet to their facility, and instead of costing the city $76,000, it will now cost the city $33,800 for the package, so the city saves $43,000 over the five-year TIF period,” Mitchell said. “This expansion will be a $390,000 increase in the property value rather than the $900,000 originally proposed.”
The TIF does not provide the company with a tax break for the existing facility, and applies only to the proposed addition of the facility. The company, under provisions of the TIF, will still add 17 new jobs to its current workforce of 100 employees.
The five-year TIF was requested by Tell Tool, Inc., a supplier of precision machined components for the aerospace industry which was founded in 1976 by Paul Drewski and William Weber, to facilitate construction of the plant addition to support a 15-year contract with a customer (Hamilton SundStrand, a division of UTC Aerospace).
The City Council voted 10-1 to approve the revised TIF package with only At-large Councilor Cindy Harris, who also voted against the original larger TIF in November, voting again in opposition.
CINDY HARRIS
There was considerable debate of the TIF when it originally came before the council last fall because it came shortly after the council approved a Special Tax Assessment for a manufacturer on North Elm Street.
At-large Councilors James R. Adams and Brian Sullivan, who left the council meeting prior to the Tell Tooll vote this past Thursday to attend the Westfield High School hockey team’s championship game against Agawam, both supported the original TIF.
“This is a TIF, not an STA (Special Tax Assessment),” Adams said at the Nov. 20, 2014 council meeting. “They will continue to pay the full tax on the existing building. This TIF is only for the 35,000-sqaure-foot addition.”
CHRISTOPHER KEEFE
Adams made that distinction because the TIF only provides tax relief on new construction while the STA extends tax relief to the entire existing facility and equipment, which is taxed as personal property.
The package is structured to give a 90 percent tax discount on the addition in year 1, dropping to 75 percent in year 2, 50 percent in year 3, 25 percent in year 4 and 10 percent in year 5.
Ward 1 Councilor Christopher Keefe said the package averages out to a 50 percent tax cut on the new addition over the five years, meaning that, because the commercial tax rate is nearly double that of that for residential property, the company will be paying at about the same tax rates as city residents.
“It falls within the guidelines established by our former colleague (Ward 5 Councilor Richard E Onofrey Jr., who served as the chairman of the Finance Committee which reviews TIFs and STAs),” Keefe said.
Sullivan said he spoke with the Tell Tool officers last fall prior to bringing the original TIF package out at the November council meeting.
“They were founded here, they don’t want to go anywhere, there was never any mention of relocating someplace else,” Sullivan said. “They need this because they signed a 15-year contract with a customer (Hamilton SundStrand, a division of UTC Aerospace). This TIF also qualifies them to go after state money and other revenue sources.”
