WESTFIELD – A local manufacturing company is seeking City Council approval of a tax incentive financing (TIF) package to construct a $2 million expansion that will add 15 jobs for a total of 350 jobs by 2018 .
Mestek Inc., an HVAC and metal forming equipment manufacturer headquartered on North Elm Street, has requested the city to also create an economic opportunity area (EOA) at its Westfield Industrial Park Road facility.
The EOA, called the Beaver Lake Opportunity Area, is needed under state law to facilitate the 10-year TIF package for the $2 million expansion of an existing facility. The $2 million capital improvement will add additional office and testing space needed to support the new manufacturing business acquired by Mestek from an Australian company.
The City Council received the TIF and EOA requests at its Nov. 7 session and referred the proposals to the Finance Committee and Legislative & Ordinance Committee for further review.
The two committees have slated a joint committee meeting to discuss those issues Thursday prior to the full council meeting.
L&O Chairman Christopher Keefe said that the TIF applies only to the addition to the existing building and will initially retain 334 jobs, with a goal of goal of creating an additional 15 jobs by December of 2018. The existing facility will continue to be taxed at the current commercial rate, Keefe said.
“It’s an excellent piece of news,” Keefe said. “The building they’re moving into is highly specialized. The fact they’re going to expand is great news. We just have to hammer out the details.”
“I was worried they were going to leave, but they’re going to move in at Industrial Parkway, with a $2 million expansion and are looking to add 15 employees,” Keefe said.
City Advancement Officer Jeff Daley, who brokered the EOA and TIF packages, said the Mestek subsidiary will increase the tax base and add manufacturing jobs to the city’s inventory.
“They (Mestek) are moving into the HB Smith building on (Westfield) Industrial Park Road,” Daley said. “They’re bringing in an Australian company, Dadanco, that will be doing manufacturing and other work.”
“It’s an exciting project because it will help Mestek grow and maintain its dominance in that business,” Daley said.
The TIF will provide 100 percent tax relief on the $2 million addition in the first year, 80 percent on years 2 and 3, 60 percent for years four and five, 40 percent on years six and seven, and 20 percent for years eight and nine.
That package also has to be endorsed by the Finance Committee which has adopted a practice of approving only 50 percent TIF packages, lowering the commercial tax rate to that of the city’s residential tax rate.
“I understand the practice of the Finance Committee to limit TIFs, but with something with this much capital investment that retains 334 jobs and add 15 more over the next five years, it’s in the city’s best interest,” Daley said. “We’re excited about this addition project.”
