LogMeIn to receive tax break for Boston expansion
LogMeIn Inc. stands to receive $2.5 million in tax breaks from the city of Boston to help add 450 jobs and expand its Innovation District headquarters into a second building under an agreement outlined by Mayor Martin J. Walsh Wednesday.
The 11-year-old company, which develops remote access tools for computers, relocated to South Boston from Woburn last year. It is the largest high-tech business in a neighborhood public officials want to make a magnet for software and gadget makers.
LogMeIn renovated a 100,000-square-foot former warehouse on Summer Street, and it has said it planned to double its local workforce in three to five years. Despite the company’s recent investment and stated growth plans in Boston, Walsh said the city was worried about missing out on future jobs.
“There were certainly some concerns that they were going to leave the city of Boston,” Walsh said after unveiling the tax break during a speech to the Greater Boston Chamber of Commerce. “You don’t want to lose a company like that.”
The deal, approved by the City Council after the mayor’s speech Wednesday, now requires a green light from Massachusetts Economic Assistance Coordinating Council, which meets next week.
A break in the form of property tax relief would be spread over 13 years beginning in 2016, when LogMeIn expects the second building to be ready. The company is under agreement to purchase a fire-damaged office building across Summer Street and plans to spend $37.7 million renovating it.
LogMeIn’s growth rate since coming to Boston has exceeded expectations, said company spokesman Craig VerColen. The additions to the workforce will be nearly complete by the end of this year, when LogMeIn anticipates having more than 400 Boston employees.
Business has been good, too. Revenues through the third quarter were $162 million, up 34 percent compared to last year. After posting a net loss in 2013, LogMeIn was $4.6 million in the black through the end of September.
The company’s swelling staff prompted it to look again for more space. Boston was always the first choice, VerColen said, though the company also has offices in Europe, India, and Australia and could make hires elsewhere.
“The talent we can get here is better than anything we can get at our other locations,” VerColen said. “But there are benefits, including tax incentives, in other places, too.”
Beyond its physical growth, LogMeIn has made three acquisitions since May and has increasingly focused on developing software for the “Internet of things,” an industry term for all manner of connected gadgets.
For example LogMeIn has worked with the lighting company Lutron to make window shades that can be controlled wirelessly using a smartphone app.
Investment in such projects is the primary driver of the company’s hiring streak, according to VerColen.
Meanwhile several local startups have jumped on the Internet of things bandwagon, making connected versions of everything from baby monitors to desk lamps.