2006-05-10
CITY OF BEVERLY
PUBLIC MEETING MINUTES
BOARD OR COMMISSION: Economic and Community Development Council
SUBCOMMITTEE:
DATE: May 10, 2006
LOCATION: Beverly Public Library
MEMBERS PRESENT: Tina Cassidy, Carla Cox, Frank Killilea, Pat Grimes,
Neil Douglas, Bill O’Hare, Don Fournier, Don Stacey
MEMBERS ABSENT: Planning Board and Conservation Commission
representatives
RECORDER: Eileen Sacco
The meeting is opened at 7:00 p.m.
Cox calls the meeting to order and asks Cassidy to introduce this evening’s guests.
Cassidy introduces Michelle Cammarata of BDO Siedman, representing Cell Signaling who
begins the presentation while awaiting the arrival of Peter Milano of the Massachusetts
Office of Business Development.
Cammarata explains that the Economic Development Incentive Program (EDIP) was
established to promote increased business development and expansion in economic target
areas in the Commonwealth and is administered by an organization called the Economic
Assistance Coordinating Council. She notes that they must go through the same process in
Danvers and will be going before the Town Meeting there on Monday.
Peter Milano arrives at the meeting at this time and continues the presentation.
Milano explains that the intent of the program is to drive job creation and job retention,
attract private investment, encourage existing businesses to stay and grow in Massachusetts,
increase local and state tax revenue, and to make the Commonwealth more competitive
against other states and countries. He also notes that the program is administered by a state
level board called the Economic Assistance Coordinating Council (EACC) comprised of
both public and private sector officials.
Milano explains that the program is a three way partnership whereby the municipality offers
a tax exemption from local real estate taxes (TIF). The state offers a 5% EOA Credit and
10% abandoned building tax deduction (when applicable). The Certified Project component
is an agreement to create and retain jobs and create private investment. He notes that a base
line for local taxes is agreed to as part of the document, and that base line value cannot be
touched and the municipality doesn’t lose anything in terms of tax revenue.
Milano explains that the EDIP is a locally driven process where the municipality makes
application for designation as an Economic Target Area with the EACC. Beverly already did
this a number of years ago, partnering with the City of Salem. The municipality designates
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Economic Opportunity Areas (EOA’s) and requests EACC approval of it. The municipality
and business also negotiate a TIF agreement and request project certification from EACC.
Everything must be approved at the local level before it is acted on by the EACC, which in
turn must approve everything before it becomes effective.
Grimes notes that the purpose of the EDIP is to entice businesses to come and invest in the
community. Milano agrees and notes that the job retention piece is key and explains that
they track the jobs created and notes that Beverly has a great track record with the
Cummings Center TIF.
Milano explains that the company will be required to file an annual report with the state
which the city will get a copy of and it will detail a head count of the number of employees
hired and retained, and how much of a tax credit they filed for in that year.
Milano explains that the EOA must be wholly with an ETA, selected by the host
municipality, and can be from 5-20 years in duration. He notes that the clock starts ticking
upon certification of the first project within the EOA. It must be site specific versus a large
area and there is no statutory minimum. He notes that with this TIF Danvers, which is a
non-EOA community, is included because the property is partially in Danvers and partially
in Beverly. He explains that Danvers has the opportunity to create an EOA for just this site
with no effect on the rest of the town. He explained that it can be established by the Board
of Selectmen and the TIF will have to be approved by Town Meeting.
Cox asks if Cell Signaling sells the property in less than the 20 years, could the City recapture
some or all of the taxes exempted to date. Milano explains that the TIF is arranged such that
it stays with the parcel. There would be no recapture of taxes already “forgiven”, but also
notes that the community can withdraw from the EDIP program at any time and stop the
local tax exemption.
Neil Douglas leaves the meeting at this time.
Cammarata addresses the committee and explains that Cell Signaling purchased the former
Kings Grant property and renovated it to create a state of the art headquarters. She explains
that phase I of the company’s project includes $36.25 million in real estate investment,
renovations, and new machinery and equipment by June 30, 2006. She also explains that
phase II includes an estimated $15 million in additional improvements to the building and
estimated $25 million in technology and equipment.
Cammarata explains that they will add another 50 jobs by the year end and the company will
create approximately 40 jobs in 2007 and 30 in 2008. She also notes that the average salary is
$68,000 and 65% of employees are scientists, researchers and technology professionals.
Mike Melnick addresses the ECDC and explains the company. He notes that they are a
science rich company that develops innovative research tools to help define the mechanism
underlying cell function and disease which accelerates processes in biomedical research and
medicine. He further notes that they make a product useful in cancer research and export it
to Japan and the UK. He explains that they use antibodies to detect special cancer causing
genes for the development of new drugs to fight cancer.
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Melnick notes that they have a high school internship program for high school seniors and
they have contributed more than $60,000 to local civic groups in the past two years.
Cassidy states that she is impressed with the strength of the application, the kinds of jobs
they have and the average salaries. She also notes that the estimation of new jobs is
impressive as well.
Fenel Eloi, Chief Financial Officer from Cell Signaling addresses the ECDC and notes that
the majority of their employees hold PH D’s.
Cox asks if the new employees are relocating to Beverly or the North Shore. Melnick states
that he himself relocated to Beverly and some others have as well.
Killilea asks if they outsource any of their work. Melnick states that they pride themselves in
manufacturing their products in house.
Cammarata reviews the proposed TIF as follows:
??
20 year term
??
Base value of property today is $6,366,300
??
Estimated value in FY 07 (Beverly Assessors) $7,957,875
??
TIP Exemption percentage is applied annually to the increment between the FY06
base value and the assessed value
??
Average exemption percentage over the life of the TIF: 5%
??
Estimated taxes generated for Beverly during the TIF term: $4.5 million
??
Estimated TIF savings to CST over 20 years: $76,000
Cassidy asks Cammarata or Milano to explain the requirement that the application apply to a
site that meets the definition of either “blighted/open”, “substandard” or “decadent” in
order to qualify for participation in the program. Milano states that he does not have the
definitions with him, but gives the basic definition of “decadent”. O’Hare asks if
“decadent” is defined in the statute. He notes that the Boston Globe made a big deal about
the AMG project in Beverly Farms with respect to whether or not it met the statutory
definitions as required. Cammarada explains that the condition of the building at the time of
sale in 2004 is what is considered, not what they have done to the property since then.
Cassidy suggested that the members be invited to express their opinion for a consensus.
Grimes states that right now she is going to vote against recommending the TIF. She
explains that she is delighted with the renovations but she feels that the climate in the city is
that there is a feeling that a lot of TIF’s have been given out. She also notes that the schools
are in trouble and fighting for money in the budget and she feels that the atmosphere right
now is that there is a perception that we are giving a business a break when we are in such
dire straights.
Fournier states that he feels that there is a pro business atmosphere and that this project
could be significant to the City of Beverly and he is in favor of it.
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Killilea states that he is in favor of the TIF noting that Beverly needs to attract business.
O’Hare referred to a Globe article regarding cities that are friendly to scientific businesses
and noted that Beverly was not mentioned in it. He noted that the NE Biolabs is moving
out of Beverly. He stated that he considers this a modest proposal and anything that they
can contribute to the community is tremendous and he is in favor of the TIF.
Cox states that she is in favor of the TIF noting that it is an appropriate business and the
ECDC should support it. She noted that she feels that the this is a really good business to
keep and root in Beverly. She also noted that we need to push the sciences on kids and
would like to see them continue with their educational partnership.
Cassidy states that she is impressed with the job creation and average salary level. She also
notes that the $76,000 in local taxes that would be forgone over the life of the twenty year
TIF would nearly be recouped in a single year (2010) when the phase two investment is in
place. In that year alone, the taxes will increase an estimated $60,000 over what they pay the
previous year. She also explained that the Cummings TIF Agreement provided for an
estimated $13.5 million in taxable investments over the life of the ten year TIF. In actuality,
the company invested $70 million during that time. She suggests that the same might be true
for the Cell Signaling project.
Stacey states that he supports this kind of business and we should actively seek more for the
community.
Fournier states that he supports the TIF for a lot of the same reasons members stated and
noted that he is particularly impressed that they made $60,000 in contributions to civic
groups. He notes that the proposed expansion in this location is an ideal way to expand the
tax base with no pain to neighbors of the site, and with benefits to the entire community.
Cox asks if there are any additional questions or comments regarding this matter. There are
none.
Stacey: motion to recommend to the Mayor that the EOA and TIF applications for
Cell Signaling be submitted to the City Council for consideration, seconded
by Cassidy. O’Hare, Killilea, Cox, Cassidy, Stacey, Fournier in favor, Grimes
against. Motion carries (6-1).
Grimes notes that while the committee may have recommended approval of this application,
as a City Councilor she is the only ECDC member who will get an actual vote on the
applications when they are considered by the Council. She states that she intends to keep an
open mind on the issue during upcoming deliberations.
Update on Letter to Mayor Scanlon
Cassidy states that Douglas had a suggestion with regard to presenting the letter to the
Mayor. She explains that his suggestion is to send the letter to the Mayor and invite him to
meet with the ECDC. Cox agrees and states that it seems like a more efficient way of doing
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it. She states that she will send the letter to the Mayor and invite him to attend the June 14,
2006 meeting.
Approval of Minutes
Cox asks if there are any changes to the draft minutes of the April 12, 2006 meeting. There
are none.
Grimes: motion to approve the draft minutes of the April 12, 2006 meeting, seconded
by Killilea. All members in favor, no one in opposition. Motion carries 7-0.
New Business
Cox updates the ECDC on the RFP for the McDonald’s site. She noted that one response
was received and the evaluation committee met and will make a recommendation to the
Mayor on whether or not the proposal should be accepted. She notes that the applicant is
the Black Cow Restaurant, which has existing facilities in Newburyport and Wenham.
Cassidy will make a copy of the proposal for members of the ECDC for review.
Stacey notes that he has been monitoring the national real estate market and the hot markets
are cooling off. He notes that some condo projects are being canceled because of a reversal
in the supply and demand equation. He also notes that he has not seen that in Beverly but it
may get here eventually. He also reviews the number of condominiums under construction
or slated for construction within the City of Beverly.
Next Meeting
The next meeting of the ECDC will be held on June 14, 2006.
Adjournment
Cassidy: motion to adjourn, seconded by Stacey. All members in favor, no one in
opposition. Montion carries 7-0.
The meeting is adjourned at 9:00 p.m.
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