BSX Seeks To Rework TIF Agreement With Marlborough
Boston Scientific and the city of Marlborough are reworking the conditions of a tax financing plan after the company failed to meet expectations for how many jobs it would create.
The Natick-based medical device manufacturer agreed in 2006 to create 1,000 jobs in the city by June 2010. In exchange, the City of Marlborough granted Boston Scientific a tax increment financing plan, or TIF, which gave the company breaks on new taxes the company would pay.
But, Boston Scientific hasn't lived up to its end of the bargain. According to local officials, the company only has about 960 employees in the city.
Open For Negotiation
Now the Marlborough city council and the state are considering allowing the company to count contract "third-party" workers as part of its 1,000-employee goal.
A revised TIF agreement, which has already passed the city's finance committee, allows the company to make a "commercially reasonable" effort to get to the 1,000 employee count by the end of the year, with no more than 50 percent of the new employees hired being contract third-party workers.
The amended TIF agreement will be considered by the full city council on Sept. 13 and then by the state at a Sept. 28 meeting of the Economic Assistance Advisory Council.
Kofi Jones, spokesperson for the Executive Office of Housing and Economic Development, which oversees TIF agreements, said the state regularly reviews TIF agreements between companies, the state and municipalities to ensure businesses are meeting their job creation standards. When they do not, the company might lose out on the tax breaks, the agreement might be amended, or the state can remove the TIF.
Jones said she's not sure how common it is for companies to use third-party contract employees toward total employee counts.
City of Marlborough officials signed the original TIF agreement with Boston Scientific in May 2006 when the company had plans to purchase and renovate nearly 504,000 square feet of office space at what is now 50, 100 and 200 Boston Scientific Way. At that time, the property was valued at about $31 million, according to the original TIF agreement.
The agreement called for the company to make $96 million worth of purchase and renovation investments in the area and employ at least 1,000 employees by June 2010. In return, Boston Scientific received a 20-year break on new taxes it pays on the property.
According to city assessors' records, however, the company has failed to meet job creation figures in each of the last two years, and it has not received the full benefit of the TIF.
In 2007 and 2008 the company received the full 50 percent tax break agreed to in the TIF, worth $86,000 one year and $87,000 the next. In 2009 and 2010, however, the company did not meet its goals, and as a penalty, the company only received a 41 percent tax break in 2009 worth $48,000 and a 39.5 percent tax break in 2010 worth $60,000. The tax break was more in 2010 even though the percentage was lower because the value of the property increased.
Despite Boston Scientific not meeting its job creation numbers, Marlborough officials, say they have been pleased with Boston Scientific's work in the city.
Arthur Vigeant, president of the Marlborough City Council, said he has no problem with the company counting third-party workers as part of the company's job totals in the city. He said so long as the workers are working in Marlborough, he's happy.
"As far as I'm concerned, if I have a full-time employee working in the city, I'm less concerned about if they are third-party or not and more concerned that they have a job and are contributing to our local economy," he said.
Plus, he said "safeguards" are in place that prevent companies from getting the full benefit of the agreements if they do not meet the job creation expectations.
Boston Scientific would not comment for this story.
WBJ Web Partners
Most Recent
Most Recent
0 Comments