Voters in Westminster will decide Tuesday whether to allow the city to enter into deals with Home Depot and Unified Global Packaging to lower their property taxes in their first years of operation in the city.
The two articles, numbers 9 and 10, on the city meeting special order ask voters to approve tax increment financing agreements (TIF) for the businesses planning to build on Theodore Drive in Westminster Industrial Park.
The special Town Meeting on Tuesday, November 19 at 6:30 PM at Westminster Elementary School will include a total of twelve articles on the order, including several articles on whether to spend several thousand dollars in state-approved free money. and two more on the number of liquor licenses the city should have.
A quorum of 100 registered Westminster voters is needed to take action at Tuesday night’s special town meeting.
What is a TIF?
Municipalities use Tax Increment Financing (TIF) agreements, a property tax incentive that lasts between five and 20 years, to attract business investment and development to the town or city. The TIF does not apply to the original home value, but only to the gradual increase in the home value due to new construction or improvements.
The TIF also offers potential buyer tax exemptions on a sliding scale that may decrease over time.
Before it can be implemented, a TIF must be passed at a city council meeting and then approved by the Massachusetts Economic Assistance Coordinating Council.
What is the proposed TIF agreement with Home Depot?
Article 9 asks voters to approve an agreement with Home Depot for the 65 Theodore Drive location in Westminster Industrial Park.
Home Depot plans to use the location for fulfillment operations and storage of products before distributing them to stores. The proposed Home Depot TIF is a five-year agreement in which the company agrees to spend $104 million on capital improvements to the site and ultimately create 150 new full-time jobs within three years of occupancy.
The TIF will be implemented in fiscal year 2027. The city predicts the annual tax bill will be $1,162,000. Over the course of five years, the company will miss an estimated $2,875,200 in property taxes. Over those same five years, they will pay a total of $2,907,700 in property taxes.
More: Home Depot is building a distribution center in Westminster
If approved by the TIF states in the first year, Home Depot will not pay property taxes on the incremental increase in the assessed value of the property, which the city estimates will amount to approximately $1,113,600 in property taxes. The percentage of taxes the company pays will increase each year of the TIF.
In the second year, the company pays 25% of its taxes on the incremental increase in assessed value, meaning the TIF is 75%, which amounts to approximately $845,000. In the third year it pays 50%; in the fourth year it pays 75%; and in the last year it will pay 95%.
After the five-year course, which begins in 2031, Home Depot is expected to begin issuing full property tax bills.
The agreement states that the company will prioritize local workers and submit an annual jobs and investment report to the city.
What is the proposed TIF agreement with Unified Global Packaging?
Article 10 is at Unified Global Packaging at 75 Theodore Drive, also in the industrial park. The cardboard manufacturing company plans to spend $27,614,000 in capital investments on the project, create 400 permanent full-time jobs, including 250 jobs already within the company, and create 150 new jobs over five years.
This TIF agreement has a term of six years and becomes effective in the fiscal year after the company obtains the required certification to occupy the site.
If the item is approved at Tuesday night’s special town meeting, UGPG will pay an estimated $171,595 in property taxes over those six years. The company will not have to pay 100% of the incremental increase in assessed value for the first two years, which amounts to an estimated $214,493 in taxes.
In the third year of the project they pay 10% of the taxes; 15% in the fourth year; 25% in the fifth year and 30% in the sixth year before paying the full tax amount in year seven. The total estimated exempt taxes will be $1,115,363.
The UGPG agreement also includes the company pledging to make additional annual payments of $20,000 per year to the Westminster Capital Plan between 2027 and 2031, a total of $100,000.
The company pledged to partner with local school districts, Ashburnham/Westminster Regional School District and Monty Tech Vocational School, to create internship programs for their students. The UGPG agreement states that the company will also submit an annual jobs and investment report to the city.
Five free money items
Articles 1, 2 and 3 of the special city meeting order posted on the city’s website require an unspecified amount of free cash to be approved. The Gardner News contacted Westminster city officials to request the amounts but did not hear back by deadline. Voters will vote on specific amounts at the city council meeting.
Item 1 will use the undisclosed amount of free cash to pay off unpaid bills or part of the unpaid bills from previous fiscal years. This article requires a vote of 9/10.
Article 2 requires an undisclosed amount of state-approved free money to be transferred to the Capital Equipment Stabilization Fund. A majority vote is required to adopt this article.
Article 3 requires an undisclosed amount of free cash to be transferred to the Pension Stabilization Fund. A majority vote is required for the article to be adopted.
If Article 5 passes, the Board of Assessors will spend $12,000 of the city’s state-approved free money to assess the value of industrial property in Westminster. A majority vote is required.
Section 6 requires $10,027 from free cash to be transferred to the Opioid Stabilization Fund. A majority vote is required for the article to be adopted.
Other articles to know before the meeting
Section 4 requires a transfer of $12,000 from the Giles Fund to the Emergency Home Heating Assistance Fund.
Article 7 asks voters to authorize the Select Board to petition the General Court for the dissolution of Holmes Park Water District, under the jurisdiction of the Massachusetts Department of Environmental Protection, and to give the city control of those water services to be taken over.
Article 11, if passed, would give the Select Board the authority to petition the General Court to grant an additional liquor license to the St. Vincent Country Store at 109 Main St. Currently, the Westminster bylaws state only two liquor licenses in the city.
On the other hand, voters will also decide on Article 12, a citizens’ petition that states the number of liquor licenses issued in Westminster must remain at two until the city’s population exceeds 10,000. According to the 2020 U.S. Census, Westminster has a population of 8,213.
This article originally appeared on Gardner News: Westminster special Town Meeting: Voters decide TIFs, liquor sales
