Westbrook might extend and expand a tax break for fast-growing Idexx Laboratories Inc., a veterinary technology company that generated nearly $2 billion in revenue last year.
Idexx, based in Westbrook since 1991, has received a portion of its property taxes back since Westbrook approved a Tax Increment Financing district for the company’s corporate headquarters in 2006. Under that agreement, Idexx has recaptured nearly $600,000 in property taxes over the past decade. Since then, Idexx has grown rapidly. Last year, the company reported revenue of $1.97 billion, an 11 percent increase over the previous year. Today, more than 2,500 people work at the global headquarters in Westbrook, nearly double the number from 2006.
Now Idexx is planning a 135,000-square-foot expansion of the Westbrook campus, located at the south corner of Saco Street and Eisenhower Drive. The company has said the space would accommodate an additional 550 to 600 workers. Idexx has asked Westbrook to add 10 years to the life of the TIF district and include the new office space. If that change is approved, Idexx could get back nearly $1 million in property taxes every year until 2037.
The company did not answer questions about whether that money is critical to the expansion, or whether Idexx would leave Westbrook if the tax break was rejected. But in an emailed statement provided by a public relations representative for Idexx, Chief Human Resources Officer Giovani Twigge said that “this proposed amendment to the TIF agreement continues a longstanding, successful partnership that allows both Idexx and Westbrook to build upon the investments and job growth we have achieved by working together. As Idexx develops a plan to expand here in Maine, this TIF amendment is an integral element in obtaining final internal approval of the expansion.”
Local officials have only praised Idexx.
Westbrook City Administrator Jerre Bryant said Idexx could locate its headquarters anywhere in the world, and other communities have courted the company in the past. Keeping Idexx in Westbrook is “very, very important,” he said.
“An incentive like this isn’t necessarily based on need,” Bryant said. “Sometimes it’s based on remaining competitive and keeping a gem like Idexx Laboratories in your community.”
Any change to the existing TIF agreement needs to be approved by the Westbrook City Council. A final vote is scheduled for Feb. 26, but the members have already signaled their support for the deal. During a first reading Feb. 5, the council voted unanimously in favor of the change. The discussion was brief and positive.
“It’s been a wonderful partnership between the city of Westbrook and Idexx,” at-large Councilor John O’Hara said at the first meeting. “We look forward to many more years of working with the company.”
Idexx makes diagnostic products for animal health care. The company started under the name AgriTech in 1983. Based in Portland, its five employees worked to detect diseases in livestock. In 1988, the company renamed itself Idexx Corp. It developed feline leukemia and canine heartworm tests. In 1991, Idexx went public, offering 1.6 million shares, and moved to Westbrook.
Over the two decades, Idexx continued to grow, acquire new companies and develop veterinary technology. Last year, Idexx was named to the prestigious Standard & Poor’s 500 Index, a stock index of 500 publicly traded companies that is considered a leading bellwether of the U.S. economy. Today, Idexx employs more than 7,000 people around the globe. Its main campus in Westbrook has grown to 670,000 square feet.
In 2006, the company needed more space on its Westbrook campus. It outlined a plan for a new 120,000-square-foot administrative office and corporate headquarters. The project would cost $38 million to build. At the time, Westbrook approved the original TIF district.
Even then, Idexx was Westbrook’s largest employer. In the years since, Bryant said, it has added 1,300 employees.
“Economically, they are a very significant part of our community,” he said. “What they produce is income to the city, to the state, to the country.”
A TIF agreement can allow a business to keep a certain percentage of new property taxes generated by a development. When Westbrook first approved the Idexx TIF, the assessed value of the campus was $40 million. Idexx pays property taxes on that value into Westbrook’s general fund. The city was not able to provide that amount from last year’s tax bill on Friday.
When the assessed value of the Idexx campus is greater than $40 million, the company gets tax money back. For example, the assessed value of the campus was $52 million in fiscal year 2017. The tax bill on that additional $12 million was about $224,000. Two-thirds – almost $150,000 – was returned to Idexx last year. Westbrook kept the remaining one-third – just under $75,000. The original agreement was for 20 years, so that tax break will be in place until fiscal 2027.
Now Idexx wants to extend the life of the agreement by 10 years, the maximum allowed under state law. It also wants to bring the planned expansion into the TIF district. The city predicts the add-on would increase the assessed value of the campus by $62 million, which would then boost the tax return to Idexx under the TIF agreement. By fiscal 2021, under the current mil rate, Idexx could be getting $926,000 back from its property taxes each year. Westbrook’s portion would be roughly $463,000. The TIF would not expire until fiscal 2037.
TIFs have been a divisive tool in neighboring Portland, where Mayor Ethan Strimling has pushed for changes to the city’s TIF policy. In November, the Portland City Council voted to require contractors working on new developments in TIF districts to pay their employees a prevailing wage.
No Westbrook councilors have expressed similar concerns. The city has 10 active TIF agreements. During last week’s meeting, Ward 2 Councilor Victor Chau described the tax shelter that a TIF district can create in a city.
The dollar value of all the property in a town or city determines the amount of state aid it gets for schools and services, as well as its county taxes. The higher the town’s valuation, the less state aid it gets and the more county taxes it pays. But under a TIF, the increased property value of that development is not counted toward the city’s valuation. So the amended TIF would mean the multimillion-dollar expansion at Idexx wouldn’t reduce the money Westbrook gets from the state.
“What the TIF would do would be shelter the new value and make it seem like nothing has changed,” Chau said at the meeting.
” ‘TIF,’ people always think it’s a bad word, but I don’t know if people understand what it does,” he said.
Megan Doyle can be contacted at 791-6327 or at:
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