Worcester Business Journal

12 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 Knowledge + Experience + Trusted Advice. It all adds up. Large enough to serve the needs of most businesses and individuals; small enough to offer the personal attention you expect and deserve. Greenberg, Rosenblatt, Kull & Bitsoli, PC Certified Public Accountants 306 Main Street, Suite 400 • Worcester, MA 01608 508.791.0901 • www.grkb.com nomic development strategies. "ere is at least a 75-percent chance they were coming anyway," Jensen said. He said a minimum of three-fourths of incentives go to companies who were al- ready settled on making the investments they promise in tax breaks. Big corporation tax breaks Amazon isn't the first major corpo- ration to receive heaping subsidies, of course. Tesla and Foxconn each received billions to open facilities in Nevada and Wisconsin, respectively. Massachusetts has given its share of tax breaks to huge companies, too. e most widely known, and hotly debated, might be the $150 million deal the state and Boston gave to attract mul- tinational conglomerate General Electric from Connecticut in 2016. Wayfair, the online retail giant based in Boston, was given $31 million from the state in December for its latest expansion. e state gave Amazon $20 million early last year to add jobs in Boston. In Central Massachusetts, plenty of other corporations with deep pockets have gotten tax breaks, too. In 2012, retailer TJX Cos. was looking for space to grow in MetroWest from its longtime headquarters in Framingham, More than half of the 148 tax breaks analyzed by WBJ went to manufacturers. A look at how often industries signed tax breaks, and notable examples: Tax breaks, by industry Industry Number Notable companies Manufacturing 67 Boston Scientific (Marlborough), IPG Photonics (Oxford) Office 15 TJX (Marlborough, Framingham), Hanover Insurance (Worcester) Office and manufacturing 11 Polar Beverages (Worcester), GE Healthcare Life Sciences (Marlborough) Hotel 10 AC Hotel (Worcester), Publick House (Sturbridge) Distributing 7 Dixie Consumer Products (Leominster) Retail 6 Home Depot (Worcester), Ira Motor Group (Milford) Research and development 5 Charles River Laboratories (Shrewsbury) Residential or mixed-use development 4 Harding Green (Worcester) Biomanufacturing 4 Sunovion (Marlborough), AbbVie (Worcester) Software 4 eClinicalWorks (Westborough), MathWorks (Natick) Office and distributing 3 Cumberland Farms (Westborough) Health care 3 Saint Vincent Cancer & Wellness Center (Worcester) Food service 2 Creedon & Co. (Worcester) Manufacturing and distributing 2 CRC Line (Worcester) Warehouse 1 The Paper Store (Leominster) Brewing 1 Jack's Abby (Framingham) Assisted living facility 1 Oasis at Dodge Park (Worcester) Health and fitness facility 1 Clemente Realty (Milford) Performance venue 1 Hanover Theatre (Worcester) Note: Industry is attributed to property description according to tax break, or to company's description. Sources: Communities of Charlton, Fitchburg, Framingham, Gardner, Hopkinton, Hudson, Leominster, Marlborough, Milford, Natick, Northborough, Oxford, Shrewsbury, Sturbridge, Westborough and Worcester. Continued from previous page where it had long leased its sprawling offices. at May, Framingham and Marlborough offered tax incentives to the company, which owns retailers like T.J. Maxx and Marshalls. Marlborough gave TJX a 20-year tax break on its new office complex in town, relieving TJX from having to pay any more than 50 percent of the new value on its property taxes until 2029. Framingham gave a 20-year tax break, too, under which TJX would save more than 50 percent on the new value on its property tax bills until 2026. Calculating the dollar amounts of how much companies save in tax breaks is an inexact science involving estimating property values and tax rates decades into the future. In some cases reviewed by WBJ, tax break documents estimated how much a tax bill will be reduced, but most tax break agreements didn't include dollar amounts. TJX's tax break savings were a relative drop in the bucket for company that reported $1.5 billion in profits the year it received the incentives, but both Fram- ingham and Marlborough faced budget restrictions that year. Just months before Framingham approved the tax break, city officials raised the median single-family prop- erty tax bill by $577, or 11 percent, as the city jumped 18 spots on the state's most-taxed residents list. A month aer Marlborough signed its tax break, the Marlborough School Committee put a temporary freeze on hiring ahead of a forecasted million-dollar budget deficit, among other budgetary worries that year among city officials. Such is the game of tax-increment financing, where communities are oen eager to give leeway to businesses to move into town or expand there. "I don't blame any city for getting into a bidding war for something they think is going to benefit them," said Rob Bau- mann, an economics professor at the College of the Holy Cross in Worcester. Baumann is a critic of tax breaks, saying federal legislation may be the only way to bar cities or states from competing against one another and in the process giving up revenue to wealthy companies. But for many municipalities, he added, tax breaks are a much more effective short-term way to compete for companies, rather than more strategic methods like improv- ing its population's workforce skills or enhancing infrastructure. "ere's really no other way to com- pete in the short run," Baumann said. In Framingham's case, the city didn't want to see one of its major corporations leave. For Marlborough, it was anxious to see a growing corporation added to its roster and to help replace vacant office space le from when financial firm Fi- delity Investments closed a 1,100-worker office there in 2011. Six months aer the deal to bring in TJX, Marlborough signed a 15-year tax break with clinical laboratory Quest Diagnostics, to fill another empty office building down the street, where the tech firm Digital Equipment Corp. once filled a sprawling building on Forest Street. Another tax break, with GE Healthcare Life Sciences, would follow for the old Digital building two years later. "Two huge buildings next to each other that were completely vacant," Marl- borough Mayor Arthur Vigeant said in explaining why the city was aggressive in reaching deals to attract new companies. Tax breaks go to some of the largest companies in the Central Massachusetts: from Marlborough attracting medical device manufacturer Boston Scientific, to Worcester giving a break to longtime city employer Hanover Insurance Group for an expansion, to Milford helping

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