Analog Devices Seeks Tax Relief for Facility Expansion

Company asked Board of Selectmen to consider approving Tax Increment Financing plan that allow for $200 million project in town.

is looking to begin a potentially $200 million expansion project that could bring a boost to the local economy through a property tax boost and other methods. Whether that project will take place in Wilmington is what remains to be seen.

Representatives from the company and the state were at Monday’s Board of Selectmen meeting, during which they proposed the possibility of taxpayers eventually approving a Tax Increment Financing (TIF) agreement through designating the town an Economic Target Area.

If that occurred, Analog Devices would continue to pay its current tax rate, but would receive real estate tax relief on the expansion portion, a number that could be anywhere between 5 and 100 percent for between 5 and 20 years depending on how it is negotiated by the Board of Selectmen.

“Our bias is to expand here in Wilmington, so we need to seek incentives in this area and ask for that real estate tax relief,” said Analog Devices Vice President and Chief Financial Officer David Zinsner. “Wilmington is the flagship site in the country for Analog Devices, and it is a natural choice as we look to expand our footprint as a part of our long-term growth strategy.”

According to Zinsner, the first phase of the project would cost $100 and the second would as well. The initial construction would bring a 250,000 square foot building to town that would house offices and labs.

Peter Milano, senior regional director of the Massachusetts Office of Business Development, said the new facility would bring a guaranteed number of jobs to the state. Though there is no way to guarantee a designated number of those jobs could go to Wilmington residents, there is the possibility that the company could advertise openings in town first before opening to a wider search.

Another potential benefit of an Analog expansion is the boost it could bring to the local economy. With a large number of new employees working in town, Wilmington’s businesses would likely benefit.

“I’m a big fan of small business and large business collaborating and working together,” said selectman Mike Champoux. “We all know where we are today. As much as I think we are digging out of this economic struggle, this project on its face seems to be a help in speeding up in the digging out process.”

Taxpayers would be asked to approve the tax relief at a Town Meeting if the negotiations progress that far.

Town Manager Michael Caira said the town has been asked to participate in this program in the past, but has never approved a TIF for an area business. Because of the magnitude of the Analog expansion plans, he said it may be worth considering this time.

“We have taken a position that nothing had impressed us to the extent that it would make us want to do something like this,” said Caira. “It’s certainly worthy of consideration and worthy of breaking the mold to set the precedent. But we need to be very careful how we do it, and be very clear that it’s because of the scope of this project.”

Wilmington Principal Assessor Skip Moynihan said Analog currently pays about $1.3 million on property taxes. He added that the first phase of construction would be an additional $2.5 million, while that number would reach about $5 million when the project was completed.

Selectmen made no decision at Monday’s meeting, but asked the company to continue dialogue with Moynihan and Caira in order to establish a timeline. Zinsner said Analog hopes to settle on a location for its expansion sooner rather than later, and added that there are several other options other than Wilmington.

“Quite frankly, (Analog has) unique benefits to the community, and I can commit to you that I will give my full consideration in reviewing this proposal,” said selectman Judy O’Connell.

Kevin MacDonald June 13, 2012 at 03:05 PM
They did not specify at the meeting exactly what they are asking for in tax relief. The CFO did respond to my question: Is there a financial institution that has committed to funding this project? His response was no but there is enough money on the balance sheet. If the Town didn't waste money then all of Wilmington would enjoy tax relief.
Wayne Sullivan June 13, 2012 at 04:40 PM
Not even close to being accurate Brendan...sorry!
Brendan June 13, 2012 at 06:17 PM
@kevin, thanks for clarifying. And an increase in corporate taxes could offset residential taxes. @Wayne, I just extrapolated from the article for the best case TIF agreement in favor of Analog Devices. I would hope the town would not give away this much, but this is what a TIF could look like and that's where they will open up the negotiations. If that is what you refer to being inaccurate, please clarify. Makes for a better discussion. PS Here are my numbers: If AD got the 20 years at 100% Tax Relief on their new construction, they would continue to pay the current $1.3M instead of an estimate $5M per year. $3.7M X 20 year = $74M.
Wayne Sullivan June 13, 2012 at 07:33 PM
Brendan - the inaccurate piece is that Analog asked for consideration of tax relief, but never asked for a set # of dollars or a # of years. They asked for the town to consider tax relief period & only on the incremental assessed value of the property once it is improved by $200M. What I will say is your math works out perfectly. First though the town needs to decide if it wants to become an Economic Target Area & then the potential calculations you provided do add up & are the max TIF agreement scenario at the local level. However, historical performance of the town & the leadership style of the town have both been very much on the conservative side. I don't see the Board of Selectmen or the Town Manager, although I certainly can't speak for them, advocating for total tax relief on an annual amount of $3.7M over 20 years. The key piece is that this would have to hit the floor of Town Meeting & be voted on by residents in order to go through. Once again, don't see max relief being supported. Therefore, shock value comments such as yours only stir a pot that hasn't been & most likely will never be created. Then you have people running around town saying per the Patch the town is considering giving away $74M dollars in tax revenue because that is what Analog asked for and that is once again inaccurate. Just one old retired man's opinion...it's ok to disagree...no issues with that...just keeping it real.
Kevin MacDonald June 14, 2012 at 02:48 AM
This is nothing compared to the school project you are supporting. Do you want to support a project where a major oil spill occurred and is being left in the ground with no intention of cleaning it up? Do you want to support a design where water is drained into an oil spill area and then complain about your street being too dangerous? I want to know if you want speed bumps so you can get chiropractic business from backs being put out of alignment from hitting the speed bumps?


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