Tax incentive programs provide new or expanding companies a break on property taxes for the first several years of operation.
WESTFIELD - City officials are negotiating a property tax incentive package in an effort to convince Gulfstream, a division of General Dynamics, to expand its operations here to include a new $20 million service center for its newest corporate jet.
That center, if approved, will be created on property owned by Barnes Regional Airport, maintain and existing 131 jobs, create an additional 100 jobs and eventually provide Westfield with as much as $500,000 in annual property taxes.
Mayor Daniel M. Knapik called the prospect "a huge win for Westfield," but warned that the city faces competition from Wisconsin and Georgia for Gulfstream's new operations.
"Details are still in negotiations but if approved Gulfstream's expansion could be completed and operational by April, 2013," said Knapik.
City Advancement Officer Jeffrey R.Daley said "the city has been working to attract Gulfstream expansion for the past several years. The project, if approve, will assist the city in developing and marketing its proposed new 60-acre airport industrial park at Barnes."
The tax package, that will provide Gulfstream with a reduction on property taxes over a 15-year period, must be approved by the City Council and the state's Economic Development and Housing Department.
Knapik and Daley will present preliminary details to the City Council Thursday, asking that both the council's Finance and Legislative and Ordinance committees meet within the next two weeks.
Daley said representatives of Gulfstream will travel to Westfield for that meeting with councilors to discuss their plans.
The service center is necessary to service Gulfstream's new GS650 corporate aircraft, costing some $65 million each. The aircraft is currently undergoing Federal Aviation Administration certification and approval, Daley said.
The Gulfstream tax incentive is only one of three Knapik will send to the Council this week.
The other two, if approved, will result in creation of a new manufacturing operation on ServiStar Industrial Way and development of a new assisted senior living complex on North Road.
Those tax packages are also being negotiated but would provide five-year property tax payment plans.
Seal Ryt, a manufacturer of seals for a variety of machine parts, will relocate from Easthampton to Westfield and renovate a former warehouse facility on ServiStar Industrial Way. Cost of that propject is estimated at $2.2 million. The company currently employs 18 people and will add another 12 jobs, Daley said.
Armbrook Senior Living LLC was to create 107 units of senior living facility at 551 North Road, near the White Oak School, a private educational facility. That project, estimated at about $20 million, will create 35 full-time jobs when completed, Knapik and Daley said.
"These three projects represent huge positive economic news for Westfield," said Knapik. "Westfield currently has about 2,000 of its residents unemployed. These willl not only add to our job but increase the city's property tax base.
"Our ability to provide some assistance to these companies in the form property tax financing is a very valuable tool," the mayor said.
One of the city's largest employers, Home Depot, opened a $25 million Northeast distribution center last December on ServiStar Industrial Way with some 300 employees. City and state officials approved a tax incentive plan for the home-repair-do-it-yourself company that reduced its annual property taxes to the city by 50 percent for the first 10-years of operation. First year property taxes on Home Depot is estimated at $350,000.