LONDONDERRY, N.H. — There was no shortage of New Balance sneakers at a groundbreaking event for the company’s first manufacturing facility in New Hampshire on Monday. Governor Chris Sununu donned a pair of his own as he praised the Boston-based company for coming to Londonderry.
“I don’t know of any other footwear manufacturer that highlights the opportunity to buy American by a brand that is really majority made here within the United States,” he said, crediting New Hampshire’s business-friendly attitude for attracting the Boston-based company.
The $70 million facility will be around 100,000 square feet, with 20,000 square feet of office space and 80,000 square feet for manufacturing.
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New Balance already has two factories in Massachusetts, and three in Maine. Dave Wheeler, the chief operating officer at New Balance, said the company had been eyeing a move into New Hampshire to create a “broader portfolio” for about two years.
He said New Hampshire is business friendly in terms of taxes and faster permitting. Plus, the Londonderry location is close to major transportation corridors like I-93, and the nearby Manchester-Boston Regional Airport can help the company offer faster shipping than its competitors.
“We’re really the only athletic brand that produces athletic wear in the US. It’s a competitive advantage for us,” he said.
Wheeler said New Hampshire’s skilled workforce and the ability to draw workers from nearby population centers like Manchester also helped convince them that Londonderry was the right spot.
Construction on the site began in mid-September, and is expected to be completed by the fourth quarter of 2024; the facility should be manufacturing shoes by 2025. Company executives are projecting it will create 150 jobs. The site can accommodate a second 100,000 foot facility if the company wants to expand in the future.
Sununu said he’s been trying to get New Balance owner Jim Davis to come to New Hampshire for years.
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“We’ve been looking over the southern border, going Jim, when are you going to come?” Sununu said.
Davis is a big Republican donor, who has donated to Nikki Haley to support her presidential bid and has given thousands of dollars to Sununu over the years, according to campaign finance reports filed with the New Hampshire Secretary of State.
There was bipartisan praise of the company’s foray into New Hampshire, with Senator Maggie Hassan and Representative Chris Pappas — both Democrats — also speaking at the event.
“It’s always a smart idea to make things here in New Hampshire,” said Hassan, who called the groundbreaking “a really, really big win for New Hampshire.”
Both Londonderry and the state of New Hampshire offered New Balance a bundle of tax and business incentives to secure the project.
The town of Londonderry also approved a payment in lieu of taxes agreement for New Balance, according to Town Manager Mike Malaguti. It will allow the company to pay regular taxes on the land while getting a tax reduction on the “improvement value,” which is how much more the property is worth because of the construction. The first year they get a 5 percent reduction, followed by a 10 percent reduction in year two, since the plant will still be under construction. It goes up to a 50 percent reduction in year three, and then decreases by 5 percent each year until 10 years have elapsed.
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After the 10 year period, the company will be taxed at a normal rate, according to Malaguti. He is projecting a $20 million valuation, with more than $1 million in tax revenue during the 10 year agreement, even with the tax relief.
“Every dollar we collect from commercial and industrial users like New Balance is a dollar we do not have to request from our residential taxpayers,” he wrote his remarks for an Aug. 14 Town Council meeting when the Council approved the agreement.
The town did have to consider some costs associated with New Balance’s new factory, such as the traffic impacts and possibly having to expand the two-lane road to the factory.
The company has a separate agreement with New Hampshire’s Business Finance Authority, who will own and finance the site, leasing it to New Balance for a 10 year period. At the end of that time, New Balance will buy the building, according to Business Finance Authority Executive Director James Key-Wallace.
Key-Wallace said the state uses the program for companies that are doing major economic development in the state.
“It helps save them money so they can invest that money in employees and grow the company,” he said. He called it a “very powerful economic development tool.” BAE Systems in Manchester has used the program, he said, noting that the finance authority doesn’t use any state taxpayer money but is self-funded, using money generated through prior projects.
Amanda Gokee can be reached at amanda.gokee@globe.com. Follow her @amanda_gokee.