WESTBROOK — The Westbrook City Council has voted to extend and expand a tax break for the veterinary technology firm Idexx Laboratories Inc.
Idexx has received a rebate on its property taxes since 2006, when Westbrook approved a tax increment financing district for the company’s corporate headquarters. Over the last decade, Idexx has paid a total of more than $8 million in property taxes to the city, and the company has gotten back nearly $600,000, roughly 7.5 percent.
In that time, Idexx has also doubled the number of employees in Westbrook. The company reported revenue of $1.97 billion in 2017, an 11 percent increase over the previous year.
Now Idexx is planning a 135,000-square-foot expansion of its global headquarters in Westbrook. On Monday night, the City Council unanimously agreed to add 10 years to the life of the TIF district and include the new office space. If the expansion is built, the city’s projections show Idexx could get nearly $1 million in property taxes back every year until 2037.
“We want Idexx to succeed,” at-large Councilor John O’Hara said. “We want them to get bigger. We want to make sure the Greater Portland region and also the city of Westbrook grows and thrives and prospers. One way to do that is to make sure that we form a partnership with these businesses that come to us, and I believe that’s what we have with Idexx.”
Also on Monday, the City Council heard proposals for two new TIF districts. One, similar to the Idexx agreement, would return tax dollars to the developer of a massive shopping plaza at the former Pike Industries quarry on Main Street. The other would dedicate tax dollars from a controversial apartment complex to pay for expanded bus service in Westbrook. Both received unanimous approval on first reading but will require a final vote on March 5.
TIF districts can be a divisive economic development tool, especially when they establish a tax break for a developer or company. In neighboring Portland, Mayor Ethan Strimling has repeatedly lobbied 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.
In Westbrook, those types of requirements do not exist. Council President Brendan Rielly, who represents Ward One, asked Monday whether the TIF district for the former Pike Industries quarry could include stipulations like a local hiring preference. He requested the city’s staff answer those questions before the final vote in two weeks.
“Obviously, we’ve got a lot of people here in Westbrook, and these are some exciting new businesses,” Rielly said. “I would love to have a local hiring preference worked in so Westbrook citizens get a crack at getting jobs there.”
Westbrook has 10 active TIF districts. The majority are agreements that return a portion of property taxes to businesses, like the Idexx agreement, City Administrator Jerre Bryant said Monday.
Idexx has been based in the city since 1991. Today, the company employs more than 7,000 people around the globe, including 2,500 in Westbrook. In 2006, the company outlined a plan for a new 120,000-square-foot administrative office and corporate headquarters. Westbrook approved the original TIF district in anticipation of that project.
At the time, the assessed value of the campus was $40 million. Every year, Idexx pays property taxes on its assessed value, which has added up to more than $8 million in revenue for Westbrook over 10 years.
Under the TIF agreement, 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. Idexx paid more than $900,000 in property taxes to Westbrook and got almost $150,000 back.
Now, the city predicts the expanded office will increase the assessed value of the campus by $62 million, which would then boost the return to Idexx under the TIF agreement. By fiscal year 2021, under the current mil rate, Idexx could be getting $926,000 back from its property taxes each year. The TIF will not expire until fiscal year 2037.
The TIF agreement under consideration for the former quarry would work the same way. The developer, Waterstone Properties Group, is required to pay for $9 million to $10 million in offsite improvements to intersections, sidewalks and other infrastructure. The returned tax money is meant to pay for those costs over 25 years. The city estimates that rebate could be $600,000 by 2021. The retail plaza will include a Market Basket and is under construction now.
“The TIF is an important financial element for this project to move forward, and we’re excited about forming a partnership with the city to make it a reality,” said Greg Day, who represented Waterstone at the City Council meeting.
The second proposed TIF agreement would be different. The tax revenue captured would come from Autumn Woods, an apartment complex also under construction next to Blue Spruce Farm on Spring Street. But the developer, Risbara Bros., would see none of the return from the TIF district. Instead, the city would direct all of that money to cover costs for expanded Metro service in the city. That money would be more than $260,000 per year, according to the city’s projections.
City officials have said one of the draws of a TIF district is that it acts as a tax shelter.
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, for example, wouldn’t reduce the money Westbrook gets from the state.
“If we could TIF the whole city, that would be amazing,” Ward 2 Councilor Victor Chau said. “I just want to keep our taxes low.”
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