The STM considered only one article to allow the town to approve a Tax Increment Financing (TIF) agreement with Ultragenyx, a pharmaceutical company focused on combatting rare diseases.
The agreement with Ultragenyx came up after the original Warrant for Annual Town Meeting was set, and so it was handled as its own Special Town Meeting.
Ultragenyx is eyeing the land at 170 Middlesex Turnpike as the location for its newest manufacturing site. The article was approved.
The TIF was not reviewed in detail at Town Meeting, as presentations couldn’t be made at this year’s outdoor meeting. The details of the agreement had been discussed at Finance Committee and Select Board meetings, and we’ll review the agreement here:
What is a Tax Increment Financing agreement?
TIF agreements are routinely used by municipalities to encourage property development on unused or underdeveloped property. TIFs are generally used when companies intend to build out property which will significantly increase its value.
When a company is offered a TIF, they are only required to pay a percentage of the assessed property tax on the land with the improvements made, which would be significantly larger. The duration of the TIF agreement is determined by the town and the company and can last for up to 20 years according to Massachusetts law.
What are the details of the TIF agreement?
The TIF approved at the Special Town Meeting was developed by the town for the Ultragenyx company. The agreement will provide property tax decreases for Ultragenyx for a period of nine years beginning in 2023, with the tax relief decreasing each year of the agreement.
Ultragenyx’s additions to the properties are expected to increase the property value of 170 Middlesex Turnpike, which has been vacant since 1983, by $12,077,340.43, and will result in annual property taxes of $349,639.01.
In accordance with the TIF agreement, Ultragenyx will only be required to pay a percentage of that, roughly $350,000 for the first nine years. The tax exemptions for the duration of the TIF are as follows, with the percentages indicating the tax relief as a percentage of the roughly $350,000. Percentages by year are: 2023, 95%; 2024, 95%; 2025, 95%; 2026, 95%; 2027, 90%; 2028, 95%; 2029, 80%; 2030, 40%; 2031, 40%;
Why is the town proposing a TIF agreement?
The TIF Agreement is being granted to Ultragenyx to encourage them to choose Bedford for the site for their new manufacturing facility. The property tax relief allows the company to develop the land without facing massive property taxes in the first few years as the manufacturing site gets up and running.
What will Ultragenyx’s new site mean for the town?
Ultragenyx’s manufacturing site will create jobs and roughly $350,000 annually in tax revenue for the town, as well as adding to Bedford’s portfolio as a home for life science companies.
More details of the benefits can be found here, https://www.thebedfordcitizen.org/2020/06/finance-committee-eyes-ultragenyx-agreement/