As a long time resident, taxpayer and parent of a school age child, I am writing in regards to the town meeting scheduled for Jan. 19 where my neighbors and I will be asked to approve a Tax Increment Financing (TIF) proposal that will facilitate the purchase and expansion of the largest empty building in town, and arguably the region, by Horizon Beverage Company, a fourth generation private company currently located in Avon. I want to share factual information about this TIF so that my fellow residents can make an informed decision on how to vote. Based on this information, I believe they will find it to be very beneficial for the town and urge them to come out and vote.

I’d like to start by clarifying that a TIF is not a blanket tax exemption or give away as many mistakenly believe. It provides a measure of relief on only the incremental real estate tax increase that results from the improvement in the property by the new owners. By state law, it also provides for an exemption of all personal property taxes during the life of the TIF. It provides towns the ability to compete in attracting and retaining businesses and investments, an important tool for Norton, a town that just lost GM and is facing the loss of Sysco, our two largest taxpayers. In fact the town has used TIF’s four times in the last decade, including GM and most recently in 2006 for Autopart International.

The economy is challenging for all right now and Horizon has made it clear from the outset that they need significant tax relief in the first few years of the project and that they have been looking at other properties in other towns that were willing to work with them on a TIF. In this economic climate, financing can be very difficult, and with commercial vacancies over 15 percent in the region, one can reasonably assume that the TIF is going to be pivotal in their decision to come to Norton.

In this case, the former GM property and its 404,000 square foot building starts with a current $291K annual real estate tax bill. Horizon intends to make $9 million in expansion and improvements to the real estate in two phases over three to four years, increasing the potential annual real estate tax levy by an estimated $114,000. That is the incremental real estate tax to which the TIF will apply. This proposal provides an average of 58 percent of relief on that incremental real estate tax over 13 years. The total amount of the starting real estate tax of $291k to be collected over the 13 years is estimated at $3,791,320 assuming current tax rates, assessments and no improvements or deterioration. By approving the TIF at town meeting, that number swells to $5,494,909 over the same period as a result of the investment and improvements, the extensive fleet of vehicles from which the town will derive an estimated $75,000 annually and an estimated $150,000 in one time permitting and fees. That is a $1,703,588 increase. It gets better. With a forward view to the expiration of the TIF, that $291k annually will gradually grow to $607,560 annually when the TIF expires and the personal property tax losses its exemption. A future increase of over $315,000.

Norton now receives a whopping 84 percent of our tax levy from residential real estate. That number is too high by any standards for a town like ours, and this deal is a healthy step in the right direction to reduce that heavy reliance. It represents an eventual estimated increase of 8.9 percent in the commercial and industrial levy.

In terms of employment, the state’s Department of Labor and Workforce Development reports 5,938 jobs in Norton. The 415 people that Horizon will employ, represents a 7 percent increase in the number of jobs that now exist in town. Many of these new jobs will be technology oriented as the firm implements computerized inventory tracking and management systems, not to mention the jobs created at their vendor companies, the construction jobs, an industry where they are desperately needed, as well as all the town services that those 415 people will use on their way in and out of town. It is likely that over time, more and more of those 415 will become residents. And, unlike GM and Sysco, it is a fourth generation family business with a great track record of citizenship in their past two towns and is likely to be a much better town booster than their predecessor.

The alternative is not attractive. How long would the town still be collecting $291k annually on an empty building? How many companies need a 404,000 square foot warehouse, a building the size of nine foot ball fields? What is the likelihood that a new owner would have such a large fleet of vehicles, make $9 million in expansions and fill the building with $10 million in equipment? A new occupant in the property as is would not represent any increases at all.

Yes, we lost GM and we’re losing Sysco, but we don’t have to lose Horizon. Please join your neighbors in making Norton a better place, come out to the meeting January 19 and support this beneficial proposal.

Estimated Tax Collections

Year   Without Horizon    With Horizon     Difference

1            $291,640                 $366,640            $75,000

5            $291,640                $378,052            $86,412

9            $291,640                $423,700            $132,060

13            $291,640              $479,619            $187,979

17            $291,640              $605,619            #313,979

Estimated Tax Revenue Reliance

Current           

Residential                                        $22,192,472            84%

Commercial and industrial            $3,546,253            13%

Personal property                            $809,049                 3%

Total                                                   $26,547,774            100%

Year 1

Residential                                        $22,192,472            84%

Commercial and industrial            $3,621,253               14%

Personal property                            $809,049                  3%

Total                                                    $26,622,774            100%

Year 5

Residential                                        $22,192,472            84%

Commercial and industrial            $3,707,665             14%

Personal property                            $809,049                  3%

Total                                                   $26,709,186            101%

Year 9

Residential                                        $22,192,472            83%

Commercial and industrial            $3,839,725              14%

Personal property                            $809,049                  3%

Total                                                   $26,841,246            100%

Year 13

Residential                                        $22,192,472            82%

Commercial and industrial            $4,027,704             15%

Personal property                            $809,049                  3%

Total                                                   $27,029,225            100%

Tom Beauchene

(Member of the Norton Industrial Development Commission)

8 Hadley Road

Norton, MA 02766