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Braintree

Haemonetics getting $1m property tax break

Braintree has agreed to give property tax breaks valued at nearly $1 million over five years to Haemonetics Corp., a global life-sciences company that officials have called a keystone business for the town.

In the months leading up to the Town Council’s unanimous approval of the series of tax breaks on Thursday, Haemonetics had lobbied for the deal, implying it would keep the company from moving to another town and stating that Braintree would ultimately come out ahead.

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The proposal initially encountered some skepticism, but Braintree officials said they eventually saw the deal as a sound, long-term investment that could also attract other companies to town.

“If you look at this in the short term, your initial reaction is one of hand-wringing,” said Mayor Joseph C. Sullivan. “But I think if you seriously analyze this, there is a great potential for economic activity that can be generated in the long term for our community.”

Sullivan vowed that the lost revenue would not be recovered by imposing higher taxes on residents or other businesses. He characterized the deal as a modest price for keeping Haemonetics in Braintree, saying towns and cities are in fierce competition to land and retain large, growing businesses that contribute steadily to municipal coffers.

“There is a competition between major communities,” he told councilors at Thursday’s meeting, noting a recent controversial decision by Partners Healthcare to consolidate many of its administrative operations in Somerville instead of Boston. “Others in this competitive atmosphere could offer some kind of other incentive program or soft landing.”

Haemonetics will receive an estimated total of $911,668 in tax relief starting in fiscal year 2017, which begins in July 2016. Under the deal, which follows a formula spelled out by a state economic development program, the company would pay no property tax on its Wood Road headquarters in the first year, then receive a 90 percent discount off its full bill in the second year, 75 percent in the third year, 50 percent in the fourth year, and 45 percent in the final year.

The state Economic Assistance Coordinating Council must sign off on the tax abatement deal, with approval expected in March.

In return for the tax relief, Haemonetics has agreed to undertake a $10 million renovation that would turn a former manufacturing space at its Wood Road headquarters into a state-of-the-art research and development center. The company would hire 125 additional full-time employees to staff the facility, and relocate 20 workers from an office in Stoughton, it said. Haemonetics also committed to increase its donations to several local nonprofits.

Earlier this year, the blood-products company outsourced more than 300 manufacturing jobs from Braintree to Mexico and Asia.

Haemonetics executives said that given state approval, construction would begin this spring, with work wrapping up in the middle of next year. The renovation would include a dramatic face lift for the drab façade of the building, a former furniture store that Haemonetics has occupied since the late 1970s.

A review by the town auditor found Braintree would probably break even by 2025, when lost revenue from the tax discount would be offset by several years of higher taxes on the improved facility and by building permit fees related to the renovation.

Haemonetics executives also stressed the company’s indirect impact on Braintree; they estimated that direct spending by the company and spending by its employees in the town amounted to $2 million annually. “It’s my hope that this will position Braintree to be more visible to other life sciences companies,” said Councilor Michael Owens. “Nationally, it’s clear our economy is changing from manufacturing and production to research and innovation. . .  I think it’s important locally for us to adapt to those changes and stay ahead of the curve.”

By 2030, the town would net $800,000 more in tax revenue than if it did not grant the exemption, according to the analysis.

Councilor John Mullaney said learning about the projected long-term benefits softened his initial reluctance toward the proposal.

“I’m not one of the people who loves to give business a break when it comes to taxes,” he told Haemonetics executives at the meeting, noting Braintree’s relatively favorable business climate. “But I do realize there are other communities out there that would love to have you.”

In brief deliberations, councilors raised a few minor concerns about the tax abatement. Councilor Charles Ryan asked whether the construction project would use union workers; a Haemonetics executive said the company would have both union and nonunion shops.

Councilors insisted they approved the deal not because a Haemonetics exit would choke off a significant source of revenue for the town, but because they hoped the gesture would attract other corporations in the Boston area’s thriving life-sciences industry. Braintree has a robust, but largely retail- and service-based, commercial tax base.

Dan Adams can be reached at daniel.adams@globe.com.
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