Tax plan helps lure Newton company

Newton-based chemical manufacturer MicroChem closed last month on a Westborough facility that will serve as its new headquarters, and company officials hope to complete renovations and relocate there by the end of the year.

But the move was made possible in August, when Westborough Town Meeting voters approved a tax-increment financing plan that will give a tax break of around $263,000 to the company over 15 years. Town Manager Jim Malloy said such deals are increasingly necessary for communities to compete for businesses growth, and have contributed to Westborough’s first rise in four years in the percentage of its tax base from commercial property.

“If you’re a community that’s dependent upon a commercial tax base, tax-increment financing has become a necessity,” Malloy said.


Malloy said investments by MicroChem will result in more than $1 million in new property tax revenue over 15 years and will bring 63 jobs to Westborough when it moves in.

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“We try to make it so that the company gets a benefit, but we get a bigger benefit,” said Malloy.

The tax-increment financing plan, or TIF, is Westborough’s third in two years, Malloy said. The same night voters approved MicroChem’s plan, they also approved one for plastic films maker Danafilms. In 2011, the town granted a tax break to health records company eClinicalWorks. 

Malloy said businesses have moved into town or expanded without the tax deals — which give companies a break on a portion of the taxes on new buildings or renovations — but that tax-increment plans are sometimes required to make Westborough competitive with other cities and towns trying to lure companies.

Commercial development is seen as a boost to a town’s coffers because businesses generally pay more in taxes than they receive back from the town in services.


MicroChem, currently located in Newton, last month purchased a 76,000 square-foot building on Flanders Road, acquiring the property for around $5.5 million. 

Some manufacturing is expected to begin by the end of the summer, and the move should be complete by the end of the year, said Jay Cole, president and chief executive of MicroChem.

Cole said Westborough was attractive to the company because of its proximity to major highways and a highly educated labor pool, not just because of the tax break.

“In today’s economic environment, it certainly helped, and it made the decision process easier, but it wasn’t the single deciding factor in what we did,” Cole said.

Cole said that it was important for MicroChem to relocate to a stand-alone site. “As a chemical company, we really didn’t want to have neighbors.”


MicroChem manufactures chemicals used to make computer chips and other microelectronic devices. Cole said one reason for leaving its multitenant facility in Newton is that because the company can’t get a license at that site to increase the amount of flammable materials it is allowed to store at the site.

MicroChem is one of at least two Newton-based companies to receive a tax break in the past year to relocate to another community west of Boston.

In December, Needham approved a tax-increment financing plan for TripAdvisor, which plans to build a new headquarters there.

Greg Reibman, president of the Newton-Needham Chamber of Commerce, said he doesn’t think the two companies represent a trend.

“We have two companies, both growing, that couldn’t find a place in Newton to expand,” he said, adding that Newton is already largely built out “because it’s a really great place to be.”

“Newton is always going to be attractive to companies,” Reibman said.

Calvin Hennick can be reached at calvinhennick@yahoo.com.