A Methuen packaging manufacturer plans to nearly double its workforce through an expansion it is undertaking with the help of local and state tax breaks.
Century Box is set to begin a project to double the size of its 62,500-square-foot manufacturing facility on its 5.5-acre site at 45 Chase St. near Route 28 and the Lawrence line.
The company employs 110 people, of which 89 are full time. The project, targeted for completion next spring, is expected to add 100 jobs over five years, 89 of them full time, and to create 70 temporary construction jobs. The cost, including construction, equipment, and staff training, is estimated at $6.5 million.
The project is being warmly received by the city, which provided a tax exemption worth $190,080 over 10 years. The state also contributed tax credits worth $1.1 million over five years.
“It’s a great thing for the city,” said Mayor Stephen N. Zanni, citing the new jobs and the tax revenue the project will bring.
He said the city’s help with the project fits with his policy to support the expansion of existing businesses in Methuen as the first priority in economic development.
State and city officials joined Century Box at a formal ground-breaking ceremony on Nov. 2. Also on hand was US Representative Niki Tsongas, a Lowell Democrat who helped the company negotiate the purchase of adjoining land needed for the project to go forward.
The tax increment financing agreement between the city and Century Box was approved by the City Council by a 9-0 vote in September.
The deal exempts Century Box for 10 years from taxes on a portion of the increased value of the property resulting from its investment. The exemption averages to about 50 percent over the 10 years, after which the property will be fully taxed, according to William J. Buckley, Methuen’s director of economic and community development.
Buckley said that even taking into account the tax break, the city will receive an estimated $416,960 in taxes from the property during the 10 years, or $155,960 more than if the property did not expand.
Zanni said the tax break is well worth it, noting that had Century Box relocated – an option the company was considering earlier this year – the city would not be getting any taxes from the property. “The community is benefiting really well from this,” he said.
Buckley said the city has awarded several previous tax breaks, including last year to Comfort Home Care, a private home health and nursing agency, for its renovation of a Pelham Street site, and in 2007 to General Mills Yoplait for an expansion of its yogurt plant, also on Pelham Street.
The state Economic Assistance Coordinating Council approved the local tax agreement with Century Box and $1.1 million in state investment tax credits for the project.
The state also has committed to helping Century Box continue to train new and existing staff during that five-year period, according to the company.
Century Box was founded in 1978 by Alvin and Johanna Kagan, who remain active with the firm. Their sons, Mark and David Kagan, are director and managing director, respectively. The company manufactures and sells folding cartons in New England and nationally.
The original 8,000-square-foot plant was located in Dorchester. The company moved to Methuen in 1984.
“The entire staff at Century is thrilled to be able to continue our growth here in Methuen,” David Kagan said by e-mail.
Kagan said Century Box began looking for expansion options as far back as 1995.
“The need to expand, fueled by our growth, became acute approximately four years ago,” he said. Even prior to this project, the company over the past few years has invested about $9 million in two other expansions.
Buckley said the company early this year was considering relocating in part due to its inability to strike an agreement to purchase a parcel of land from the owners of Polartec, whose property abuts the site. He said Century Box also was receiving incentive offers from other communities, notably one in North Carolina, to relocate.
But with the help of Tsongas, negotiations over the land purchase were successfully concluded last spring.
“The process was long and at times arduous. However with the help of Congresswoman Tsongas’ office, we were able to get the correct parties to the table and work out an acquisition plan that served all parties well,” Kagan said.
Tsongas, in a statement, said that Century Box “is the type of innovative company that we ought to be supporting in order to grow our economy. I applaud the Kagan family and Century Box’s commitment to Massachusetts and to their employees.”
“We hear so much about manufacturing jobs getting shipped elsewhere,” Buckley said. “For the city of Methuen and the state of Massachusetts to be able to keep Century Box within our borders was a real success story.”