Westminster voters to decide on two TIFs: What to know for Tuesday's

Voters in Westminster will decide Tuesday whether to allow the town to enter into agreements with Home Depot and Unified Global Packaging to lower their property taxes in their first years operating in town.

The two articles, numbers 9 and 10, on the special Town Meeting warrant ask voters to approve tax increment financing (TIF) agreements for the companies which are planning to build on Theodore Drive in Westminster Industrial Park.

The special Town Meeting on Tuesday, Nov. 19, at 6:30 p.m. in the Westminster Elementary School, has a total of 12 articles on the warrant including a number of articles on whether to spend several thousands of dollars of state-approved free cash and two more on the number of liquor licenses the town should have.

A quorum of 100 registered Westminster voters is needed to take action at the Tuesday night special town meeting.

Table of Contents

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 investments and development to the town or city. The TIF does not apply to the original property value but only to the incremental increase in property value due to new construction or improvements.

The TIF also offers potential buyer tax exemptions on a sliding scale that can decrease over time.

Before it can be implemented, a TIF must be passed during a Town Meeting and then approved by the Massachusetts Economic Assistance Coordination 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 site in Westminster Industrial Park.

Home Depot plans to use the site for fulfillment operations and warehousing products before distributing to its retail stores. The proposed Home Depot TIF is a five-year agreement in which the company agrees to spend $104 million in capital improvements to the site and, ultimately, bring 150 new full-time jobs within three years of occupancy.

The TIF will be implemented in the fiscal year 2027. The town predicts the annual tax bill will be $1,162,000. Over the course of five years, the company will not pay an estimated $2,875,200 in property tax. In those same five years, they will pay a total of $2,907,700 in property taxes.

More: Home Depot building distribution center in Westminster

If approved the TIF states in the first year, Home Depot will not pay any property taxes on the incremental increase of the assessed value of the property, which the town estimates will be about $1,113,600 worth of property taxes. The percentage of taxes the company pays will increase every year of the TIF.

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In the second year, the company will pay 25% of its taxes on the incremental increase of the assessed value, which means the TIF is 75%, which is approximately $845,000. In the third year, it will pay 50%; in the fourth year, it will pay 75%; and in the last year, it will pay 95%.

After the five-year course, starting in 2031, Home Depot is projected to begin its full property tax bill.

The agreement states the company will prioritize local hiring as well as submit an annual job and investment report to the town.

What is the proposed TIF agreement with Unified Global Packaging?

Article 10 is with Unified Global Packaging at 75 Theodore Drive, also in the industrial park. The cardboard manufacturing company plans to spend $27,614,000 in capital investment on the project, bring 400 permanent full-time jobs of which 250 jobs that already within the company and create 150 new jobs over five years.

This TIF agreement is for six years and will begin the fiscal year after the company gets the required certification to occupy the site.

If the article is approved at the Tuesday night special town meeting, UGPG will pay an estimated $171,595 in property tax over those six years. The company does not have to pay 100% of the incremental increase in assessed value in the first two years, which is an estimated $214,493 in taxes.

In the third year of the project they will 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 exempted taxes will be $1,115,363.

The UGPG agreement also includes that the company promises to make additional annual payments of $20,000 per year between 2027 and 2031 to the Westminster Captial Plan, a total of $100,000.

The company promised to collaborate 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 the company will also submit an annual job and investment report to the town.

Five free cash articles

Articles 1, 2, and 3 of the special Town Meeting warrant posted on the town’s website request that an undetermined amount of free cash be approved. The Gardner News did reach out to Westminster town officials to request the amounts but did not hear back by deadline. Voters will vote on specific amounts during Town Meeting.

Article 1 will use the undisclosed amount of free cash to pay off any unpaid bills or a portion of the unpaid bills from previous fiscal years. This article requires a 9/10 vote to be passed.

Article 2 asks for an undisclosed amount of state-approved free cash will be transferred into the Capital Equipment Stabilization fund. A majority vote is required for this article to be passed.

Article 3 requests an undisclosed amount of free cash to be transferred into the Pension Stabilization Fund. A majority vote is required for the article to pass.

If Article 5 passes, the Board of Assessors will spend $12,000 from the town’s state-approved free cash on assessing the value of industrial property in Westminster. A majority vote is required.

Article 6 requests that $10,027 from free cash be transferred into the Opioid Stabilization Fund. A majority vote is required for the article to pass.