ECDC Minutes 10-20-15CITY OF BEVERLY
BOARD OR COMMISSION: Economic and Community Development Council
DATEMME: October 19, 2015
LOCATION: Beverly City Hall, Conference Room B and City Council
Chamber
MEMBERS PRESENT: Aaron Clausen; Michael Collins; Denise Deschamps;
Neiland Douglas; Paul Guanci; Maureen Hobin; William
Howard; Walt Kosmowski; Richard Marino; Michael
O'Brien.
MEMBERS ABSENT: None
OTHER: Bryant Ayles; Michael Cahill, Mayor; Stephanie Williams.
Representatives of Krohne, Inc. made a presentation providing a history of the company,
descriptions of the products it manufactures and sells, and Krohne's desire to purchase a property
located at 55 Cherry Hill Drive in Beverly, MA in order to expand its facility. ( Krohne
powerpoint presentation attached.)
Krohne, Inc. has a global presence. Is 100% family- owned. Its goal is to be a $1- billion - dollar
company in five years.
Krohne intends to create a full -blown manufacturing facility in Beverly. Both company
leadership and employees have been with the company for a long time. Krohne's fastest growing
item, the Optimass 6400, will be built here. It is now produced in the UK along with another
product. Eighty percent of their sales occur in North America. The company wants to be located
in a high -tech area in North America. Krohne would also be creating a 1,500 SF training center.
The company plans to build an additional 40,000 SF (at the 55 Cherry Hill Drive location). They
want room for growth. The downside of acquiring this site is that the existing building needs a
major renovation. One major component of the renovation will be to add supports to the flooring
to accommodate Krohne's manufacturing equipment. They presently have 45 employees and
plan to hire another fifty employees or more. Capital expenditures will total approximately $20
million. It will cost approximately $8 -10 million to rehabilitate the existing building and
construct a new building. Their manufacturing process is environmentally friendly. They do not
use a high volume of water. Krohne wants to adapt some of its products to meet US needs as
they are now built to respond to European demand.
The expiration of their existing lease is March of 2017. Krohne hopes to move in at the end of
the fourth quarter in 2016.
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Krohne's employees contribute a lot to the community. Some of the employee's interests include
the Massachusetts Audubon Society; 4 -H Club; hosting high school students through the North
Shore Community College/Peabody High School Cooperative Program.
Krohne wants to expand its distribution to South America. They currently have an office in
Brazil.
Krohne's presentation in the City Council Chamber concluded and the members of the ECDC
adjourned to conference room B to resume discussion of the proposed project.
The City has entered into several TIF's in previous years. The average tax break is 5 %.
Duration of the TIF varies with the longest being 20 years.
The real benefit to Krohne is the State's investment tax credit. But local tax incentive is not
inconsequential. There are no ConCom issues of concern. Some water issues possible but
unlikely. The building at 55 Cherry Hill Drive was built for a specialized use. This presents a
challenge for resale. It has been vacant for five years. The work that Krohne is proposing makes
it a much more viable structure. Their employees are highly skilled and well compensated.
Krohne could begin work over this winter inside the building. The ECDC can choose to vote
now or later, in November. It was agreed that the ECDC would like to take a vote now to
recommend that the City pursue the project. The specifics of the TIF agreement would be
determined subsequently by Mayor Cahill and his staff. The vote was proposed by Neilland and
seconded by Paul Guanci and passed unanimously.
The meeting was adjourned
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