The Fitchburg City Council approved the creation of a tax incremental financing district Tuesday to provide public financing for a proposed $190 million Promega Corp. expansion.
The biotechnology company is seeking to build a new 270,000-square-foot research and development facility next to its campus off East Cheryl Parkway. With the district established, Promega and the city will have to come to agreement on how much public financing could be contributed. The project could be eligible for an estimated $14.8 million in public funds.
The proposal also includes adding two floors to an existing parking structure for 340 more stalls and constructing a 4,800-square-foot “central utility plant” to serve the new and existing buildings and increase energy efficiency.
Construction is eyed to begin this summer and slated for completion in 2020. The new research and development facility would be east of the company’s Feynman Center, 2780 Woods Hollow Road.
“I know it’s going to be a wonderful project, because I’ve heard that from a lot of people,” Ald. Tony Hartmann said.
Under tax incremental financing (TIF), a municipality takes the property tax revenue generated from new construction, known as increment, and uses those funds for assisting development in a district, such as through public infrastructure improvements. After a certain number of years, the additional property tax revenue returns to the city and other local taxing jurisdictions.
Based on a conservative property value estimate of $94 million on Promega’s new construction, the city could generate up to $45 million in tax increment over 20 years, said Greg Johnson, a senior municipal adviser for Ehlers, a consulting firm the city hired to examine Promega’s plan.
“The purpose of this district is really to facilitate the expansion of Promega,” he said.
If Fitchburg decides to appropriate $14.8 million in TIF, the city could recoup its cost and potentially close the district by 2033 — seven years earlier than legally allowed to remain open — and thus put the entire value of the new construction back on the tax rolls, Johnson said.
Promega, a privately held company, has manufacturing facilities, distribution centers and branch offices across the globe, but it is based in Fitchburg.