MAYOR DOMENIC J. SARNO SIGNS SPECIAL TAX AGREEMENT—TITEFLEX CORPORATION LOOKS FORWARD TO FUTURE GROWTH IN THE CITY OF SPRINGFIELD
March 4, 2010 - Mayor Domenic J. Sarno, city officials and Titeflex Corporation management announced today that a Special Tax Agreement (STA) has been approved that will retain over 100 manufacturing jobs at the Titeflex Corporation. The agreement received approval from the Springfield City Council this week and needs approval from the State Economic Assistance Coordinating Council (EACC). The EACC meeting is scheduled for March 31, 2010, in Boston.
Titeflex has been located in Springfield since 1956, and is a world leader in the production of stainless steel braided hose for use in aerospace, automotive, and general industrial applications. The company employs 101 employees at its nearly 300,000 square feet facility in the City’s East Springfield neighborhood.
Over the past two years, Titeflex’s corporate headquarters had advanced plans to close the Springfield facility and relocate it to South Carolina, taking advantage of generous incentives and reduced expenses. Working with Mayor Sarno, City Councilors Timothy Rooke and Michael Fenton, the Company’s local management team reached an agreement with the City that will keep the company in Springfield for the next 12 years.
Mayor Domenic J. Sarno stated “I am very pleased that the City was able to work with Titeflex Corporation to reach this agreement that keeps over 100 jobs here in the City of Springfield.” “The City of Springfield not only has an obligation to create new jobs for our residents but we have an ongoing commitment to job retention and we will continue to work with businesses throughout the City,” said Sarno.
Titeflex Corporation Financial Controller Martin Hough stated “Titeflex Corporation employs over 100 people and has been part of the Springfield community for over 50 years.” Hough praised Mayor Sarno, City Councilors Fenton and Rooke, and other city officials for their efforts, stating “this partnership with the City of Springfield helps us to keep these key manufacturing jobs in the City and we look forward to future growth here.”
Ward Two City Councilor Michael Fenton stated “I am glad that we were able to retain these jobs for Ward Two and the City of Springfield.” In addition to his strong support of the agreement, Councilor Fenton added that he looks forward to working with Titeflex in the future and on developing a formal student development program between the Company and Putnam Vocational High School.
At-Large City Councilor Timothy Rooke said “In times of financial and economic uncertainty the municipal government should use every economic development tool available to preserve the businesses we have and the employees who rely upon them.” “Attracting new business growth at this time in this current climate is very difficult and this is what the role of government should be in today's business climate,” stated Rooke. “Titeflex’s aggressive management team and union representative working on behalf of the business and its employees should be commended and Mayor Sarno and City Councilor Fenton should also be recognized for being supportive to the business community and preserving over 100 jobs," added Rooke.
Chief Development Officer John Judge stated “We are delighted that the 100 plus employees of the Titeflex Corporation will be staying here, in the City of Springfield.” “The 12 year Special Tax Assessment will help to ensure that a great company - with a global brand and good paying jobs - will continue to grow and prosper in our City,” said Judge. “We are grateful to the employees for their efforts to keep their company here and to the Titeflex Corporation for their investment of more than $3 million in facility renovation and new equipment purchases,” added Judge.
The collaboration between the City’s economic development office, the Massachusetts Office of Business Development and Titeflex’s local management resulted in the Special Tax Agreement (STA) that will keep the company in Springfield for a 12 year term with a goal that the Company maintains its presence in the City for many years to come. The STA falls under the State’s Economic Development Incentive Program (EDIP), and allows the City to exempt taxes for a term of between 5 and 20 years. The company will invest approximately $3.3 million in site improvements during that time period.
HIGHLIGHTS OF THE SPECIAL TAX AGREEMENT INCLUDE:
- A Company planned renovation and rehabilitation project will result in an approximately $3,380,000.00 investment through renovations, new construction, fixtures, furniture and equipment;
- The Company commits to the retention of one hundred (100) employees;
- The Company will continue to be responsible for payment of real estate taxes assessed, city, state, and federal taxes, fees, and continue to remain in good standing with all regulatory matters including city building, zoning, and public safety requirements; and
- The Company will partner with the Springfield School Department on a mutually beneficial internship/mentoring program(s) to assist students seeking future careers in business or engineering;
The City shall grant a Special Tax Agreement exemption to Titeflex Corporation in accordance with M.G.L. Ch. 23A, Section 3 (E) as follows:
- The exemption shall be for a period of twelve (12) years commencing with Tax Year 2011 (beginning July 1, 2010) and ending with Tax Year 2023 (ending June 30, 2022); and
- The City shall assess real estate taxes on the value of the property beginning at 25% for Tax Year 2012 and increasing as indicated below, culminating in 100% taxation of the Incremental Value in Tax Year 2023 and no further exemption thereafter.
% INCREMENTAL VALUE EXEMPTED
Taxes to be assessed at full fair cash value