Worcester Business Journal

10 Worcester Business Journal | January 21, 2019 | wbjournal.com F O C U S C O M M E R C I A L R E A L E S T A T E W hen Bruce Platzman was looking for new space to consoli- date operations for his Hudson furni- ture-making company, AIS, he looked everywhere. Not just around Massachusetts, Platzman – the company's president, CEO and cofounder – talked to officials in Mississippi and Texas, where labor and real estate costs would be far cheaper. "ey were very interested in luring us there," Platzman said. One thing kept AIS in the area: tax breaks. Leominster offered a 13-year tax break in return for AIS moving into the city with 320 jobs and creating 40 as part of a $13-million investment. e company moved into a sprawling, vacant 537,000-square-foot facility on BY GRANT WELKER Worcester Business Journal News Editor Tucker Drive. "It's the only reason we're here, because my board wanted me to pursue other options," Platzman said. AIS is not alone in getting a tax break to help expand and stay in Central Massachusetts. Over the last 20 years, Central Massachusetts communities have oen used tax agreements to help manufacturers, offices, hotels, retailers and others in what municipal leaders say is the most important tool they can use in economic development planning, es- pecially when labor and utility costs are higher than in other states or overseas. ese municipal tax breaks typically take the form of tax-increment financing agreements, or TIFs, where companies receive a percentage discount off the increased taxable value of their property. For example, if a company receives 50-percent TIF to move into a vacant building where the taxes were previous- ly $1,000 annually and the company's investment increases the value to the point where the undiscounted taxes are $10,000 annually, the company will end up paying $5,500 in taxes. rough public records requests made of 19 Central Massachusetts communi- ties picked for their size and location, Worcester Business Journal reviewed 148 TIFs offered by 16 of those com- munities from 1998 to 2018. (Auburn, Millbury and Southborough said they offered none.) e analysis found 88 percent were successful in meeting their stated job creation and private investment goals, although not all companies were forced to commit to specific targets. However, a Bruce Platzman, AIS president, CEO and co-founder 1st in a 4-story series Tax Breaks Paying for Growth 16 prominent Central Mass. communities have given out 148 tax breaks in the last 20 years, calling for $2.3 billion in private investment Paying for growth In this issue Part 1: Paying for growth – Prominent Central Massachusetts communities gave out 148 tax breaks, in exchange for the promised creation of 9,000 jobs and $2.3 billion in private investments. Part 2: Hits & Misses – Tax breaks have an 88-percent success rate in Central Massachusetts, but even for those that fail, municipal officials see them as necessary. In the Feb. 4 edition Part 3: Differing philosophies – Communities like Worcester, Framingham and Gardner are more prolific in handing out tax breaks, striving to make up for deficits like higher tax rates. Part 4: Stadium financing, the new tax break – Worcester is the latest community to try economic development through professional sports, helping teams to avoid taxes by building municipal stadiums. PHOTO/MATT WRIGHT

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