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2012-11-SPTM-rpt2
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2012-11-SPTM-rpt2
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Year
2012
Department
Town Clerk
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Minutes - AC - Appropriation Committee
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APPROPRIATION COMMITTEE 2' REPORT TO THE NOVEMBER 2012 STM <br />Warrant Article Analysis and Recommendations <br />Article 8: Approve TIF Agreement(s) <br />Funds <br />Requested <br />Funding <br />Source <br />Committee <br />Recommendation <br />N/A <br />N/A <br />Approve (5 -2) <br />Approving this article would authorize the Board of Selectmen to enter into a Tax Increment Financing (TIF) <br />agreement with Vistaprint USA, Incorporated, covering a portion of anticipated new construction at 95 <br />Hayden Avenue. <br />Background <br />Vistaprint provides marketing products and services to millions of small businesses and organizations <br />globally. Its North American headquarters are currently located at 95 Hayden Avenue where the company <br />leases 219,505 square feet of space. Rapidly growing, Vistaprint employs between 750 and 880' permanent <br />full-time workers in Lexington (including 28 Lexington residents) and expects to create an additional 300 <br />new permanent positions in software development, engineering, marketing, video editing, information <br />technology, and corporate support functions over the next few years. This growth is taxing the current <br />facility and has led Vistaprint to search for new space. <br />In 2009 Town Meeting approved a zoning by -law amendment requested by the then owners, The Beal <br />Companies LLC, allowing construction of a new building for office and laboratory uses and associated <br />parking on the property — to be known as Three Ledgemont Center (aka Ledgemont 3). The Beal Companies <br />did not, however, proceed with construction and Vistaprint began exploring alternate locations for its <br />expansion plans. In the summer of 2012 Hobbs Brook Management LLC purchased the property and has <br />subsequently proposed plans to construct a roughly 150,000 square foot facility designed with a campus -style <br />atmosphere and state -of the -art environment systems consistent with the 2009 Preliminary Site Development <br />and Use Plan (PSDUP). This plan makes on -site expansion for Vistaprint viable again and Vistaprint seeks to <br />lease an estimated 100,000 square feet of the new facility for ten years with an option to extend for two five - <br />year periods and an option to lease the remainder of the space. Vistaprint also intends to renegotiate its lease <br />on the existing space, which currently expires in 2017, to be co- terminus with the lease on the new facility. <br />Vistaprint has requested that the town agree to a Tax Increment Financing (TIF) arrangement that would <br />reduce their property tax obligation on the new facility for a period of thirteen years. Technically the <br />reduction of the obligation is to the property owner Hobbs Brook, but the terms of the lease effectively <br />transfer the tax obligation to Vistaprint. A Massachusetts TIF agreement may run between five and twenty <br />years and can exempt between 5% and 100% of property taxation on all or part of the increased value <br />resulting from development. <br />In addition, Vistaprint is pursuing investment tax benefits from the Commonwealth under the Economic <br />Development Incentive Program (EDIP). These additional benefits may be obtained as a Certified Expansion <br />Project (EP) or as an Enhanced Expansion Project (EEP). Substantial sales outside the Commonwealth and <br />plans to create an extraordinary number of jobs make Vistaprint eligible to obtain these benefits under either <br />program. <br />1 Oral remarks by Vistaprint at the November 13 TMMA Information Session identified 750 current employees, but <br />written materials establish 880 as the baseline position count prior to expansion associated with the TIF request. <br />
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