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Selectmen Begin Process to Decertify Lonza TIF

By Michelle Murdock, Freelance Writer
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Selectmen at their August 13th meeting voted unanimously to send a letter to the state’s Economic Assistance Coordinating Council (EACC) to begin the process of decertifying the Tax Increment Financing (TIF) agreement between Hopkinton and Lonza Biologics, located at 97 South Street.

Earlier on July 23, Lonza announced and notified the board that it would be phasing down its operations in Hopkinton and terminating 173 employees at the facility on South Street. As a result, John Palmer, Chairman of the Board of Assessors, advised selectmen that timely decertification will allow the assessors to remove the discounted value associated with the TIF for the current fiscal year 2014, resulting in a tax impact of approximately $29,000.

The 8-year TIF agreement with Lonza was executed in 2007. In return for a reduced tax rate, the company agreed to the retention of 130 jobs and the creation of 300 new jobs as well as a $70 million investment. The planned layoff of employees in September and the potential ongoing phase out of the Hopkinton location, allows the town to request decertification of the TIF. The letter will serve as the basis for the decertification at the September 24 EACC meeting.

In a letter addressed to John Mosher, Chairman of the Board of Selectmen, Lonza officials said, “The company plans to begin eliminating these positions on September 23, 2013 and may continue in additional phases thereafter if authorized and as necessary due to business circumstances.”

TIF agreements are company specific and when decertified there is no guarantee that taxes can be recouped. In December 2011, the TIF agreement with Stryker Biotech was decertified, but a settlement was reached which allowed the town to recoup $450,000 in lost tax revenue. A second TIF with Barry Controls was decertified in March of 2012. A third TIF agreement with Perkin Elmer, through 2026, went into effect on July 1, 2013.

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lonza1_0.pdf 317.61 KB
assessors_letter_lonza.pdf 291.86 KB
mobd_letter.pdf 398.38 KB