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Burlington eyes tax break to lure coffee firm

Offer a tax break to persuade firm to relocate to town

BLOOMBERG

Parent company Green Mountain Coffee Roasters Inc. says net sales from Keurig brewers and accessories totaled $1.7 billion in fiscal year 2011, up 104 percent from the preceding year.

Burlington is negotiating with Keurig over a potential tax break aimed at bringing the growing coffee machine company to the town.

Town administrator Robert E. Mercier said Burlington officials are in active talks with the firm, with the hopes of having a proposed tax-break agreement to put before the annual Town Meeting in May.

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Mercier said the company, based in Reading with additional facilities in Wakefield and Woburn, is looking to relocate its headquarters and possibly consolidate some of its other operations at a new site. He said two Burlington properties are among those Keurig is considering.

“The discussions have been serious and fairly intensive over the last week or so,’’ Mercier said Tuesday. “We are not there yet, but I’m hopeful and confident that we’ll reach mutual agreement.’’

Mercier added, though, that should an agreement be reached, “the question is whether that would be enough for them to make the decision to make Burlington the location.’’

Molly E. Kelley, public relations specialist for Keurig, said by e-mail, “We are currently underway with a site selection process for our Keurig headquarters office location and are in active discussions with a number of sites that meet our future business needs.

Kelley said that Keurig is “continuing to pursue multiple finalists,’’ and that no decision has been made. She declined to identify the sites under consideration.

Founded in 1998, Keurig is a wholly owned subsidiary of Vermont-based Green Mountain Coffee Roasters, which acquired the firm in 2006. Keurig manufactures single-cup brewing systems, which combine a pressurized hot-water brewer with K-Cup and Vue packs of gourmet coffee, tea, hot chocolate, and other specialty beverages

Through licensing agreements, Keurig offers more than 200 varieties of premium branded coffees and teas in K-Cups. In its annual report last December, Green Mountain said net sales from Keurig brewers and accessories totaled $1.7 billion in fiscal 2011, up 104 percent from the preceding year.

Mercier said that because of its relative proximity to Reading, Burlington would be a good location for Keurig, noting that the company’s employees would not face a significant increase in their travel time. He said the company wants a presence along a major artery, such as Route 128, Route 3, or Interstate 93.

Keurig has told the town that the two sites it is exploring in Burlington are Nordblom-owned property in Northwest Park, off the Middlesex Turnpike, and the site of a former industrial complex on South Avenue that is owned by Guttierez Co., Mercier said.

Mercier said Keurig’s plan would be to make use of existing buildings at either location, and possibly construct an addition in the short term, then in a second phase, construct two new buildings for a total complex of about 500,000 square feet.

Since Keurig would be renting the property, any tax break agreed to by the town would go to the land owner. But the tax savings would be passed on to Keurig through its lease. The tax increment financing agreement would exempt the owner over a specified number of years from part of the increased value of the property resulting from the investment.

In addition to Town Meeting, any agreement would require approval by the state’s Economic Assistance Coordinating Council. Firms that earn local tax relief may also apply to the council for an up to 5 percent state earned income tax credit.

Mercier said the town is hoping Keurig will choose Burlington.

“They are a premier company, one of those companies that there is a buzz about, with their coffee maker and all the innovative things they have done with that,’’ he said, noting that the company is poised for significant growth.

Mercier said Keurig has told the town it would bring 400 to 500 employees to its selected site and add about 100 a year for four to five years.

“These are good jobs, lots of engineers, a lot of scientists for research and development to improve the processes they have in place,’’ he said.

In addition to jobs, Mercier said, a move by Keurig to Burlington would bring new tax revenues to town that Mercier estimated could exceed $1 million a year.

“It would add to the list of great names we have here,’’ Mercier said, citing Oracle, Avid Technology, the Lahey Clinic, the Burlington Mall, and other prominent corporate entities in the town.

Selectman Bob Hogan said his board would welcome Keurig.

“The Keurig name is certainly an attractive name to have attached to anything the town does,’’ Hogan said. Other benefits, he said, would include the “quality, good-paying jobs’’ the company would bring to town and the boost that local businesses would receive from those employees purchasing local goods and services.

“There are a lot of positives to all of this,’’ he said.

John Laidler can be reached at laidler@globe.com.
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