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Seacoast Leadership 2013 TIF Case Study

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Karen Pollard, CEcD, EDP
Karen Pollard, CEcD, EDP

The Granite State Business Park in Rochester, NH was developed in 1989 and has expanded significantly with the help of tax increment financing (TIF) districts and other incentives. It is now a 252-acre business park with over 420,000 square feet of developed space and over 425 employees. A recent project brought a 343,000 square foot facility for Safran/Albany that will create 689 full-time jobs with $41 million in annual payroll and spur over 900 indirect jobs. The TIF district was critical in providing $9 million for infrastructure to support the project. The business park is continuing to expand and develop additional lots with the goal of transitioning the local economy and providing new advanced manufacturing and composite materials jobs.

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Granite State Business Park Project of the Year 2012 TIF District Case Study Seacoast Leadership Economic Development Day May 1, 2013
Business Park Development 1989 Howard Katz, Developer Phase 1 97 Ac Phase 2 55 Ac No Access to Phase 2 Off to a Great Start! Prime Tanning 1994 Salmon Falls Precision 1994 Techniweave 1999 Frisbie Hospital Secure Storage 1999 Pease International Tradeport 1992
Granite State Business Park 2010 62.2% of Phase 1 is developed 421,500 sq ft/ 5bldg 425 Employees Assessed for Taxes $15,740,000 Payroll $19 MM Manufacturing Changes Prime Tanning closed, Rand-Whitney Corp. Salmon Falls Precision closed, Multi-Tenant Techniweave acquired by Albany International, bldg expansion in 2007 Industrial Condos 2006 & 2009 Still owned by same developer
Aerial View
Local Economic Challenges Great Recession Existing Companies with Unique Products Thompson Center Arms announces relocation to Advanced Manufacturing MA INCENTIVES! Composite Materials Lack of available Capital, Developer willing to increased underwriting sell @ discount standards Expansion Lots of available real opportunities estate CHEAP! Transition in required mfg skills
TIF District & Program Plan Financing & Development Program Plan: Defines district, budget, use of funds, etc. Adopt by public hearing. See RSA 162-K:6 and 162-K:9. Plans must contain a complete statement as to the public facilities to be constructed, the open space to be created, the environmental controls to be applied, the proposed reuse of private property, and the proposed operations of the district after the capital improvements within the district have been completed.
Important Features! Multiple TIF Districts are allowed, HOWEVER: Do not exceed 8% of Assessed Value for community (or 16% for all combined with districts that have outstanding bonds); OR, 5% of total acreage! (or 10% of total acreage for bonds outstanding) Increment only accrues after date district is established! Values as of April 1. Bonds First payment must be within 5 years. Last payment no later than 30 years. Bonds are NOT to be included when computing the municipality's net debt under RSA 33.
TIF Example Pre-construction or Original value = $1,000,000 Post Construction Value = $50,000,000 Increment or Captured Value = $49,000,000 Tax revenue on $1,000,000 Original value = $25,000 ($25 / $1,000 A.V. Tax Rate) Tax revenue on increment = $1,225,000 $25,000 to General Fund $1,225,000 to TIF for debt service, operating costs, maintenance & reserves. Increment Value is based on April 1st each year
Critical Deal Components Internationally Competitive RFPs Two Partners Incentives - on-site and offsite +$9 M blighted location RSA 205 never used City investment in BIG infrastructure +$5 Million Access to Site Wetland mitigation package Utilities, relocation of PSNH transmission lines Critical Timing of Construction Collaborative Partnerships City Staff & Elected Officials DRED, DES (EPA, Army Corp) Governor Lynch NH Northcoast RR PSNH, Unitil, FairPoint Labor availability & cost Skills shortfall Training program for 20+ years worth of employees Great Bay Community College Creteau Technology Center Advanced programs $4 M NH, $19.9 M US
Safran/Albany LEAP Facility This Albany & Safran project will create: 343,000 ft2 facility + 90,000 ft2 exp $100MM CAPEX 55 acres under agreement for exp 689 FT jobs $41MM Annual Payroll 911 indirect jobs $27.5MM Payroll Total Economic Output (NH) $232,781,044 Tax Increment pledged for ~15 years to debt service of $9 MM
Granite State Business Park 2013 Expanded to 252 ac Development District +$5M Infrastructure Incentives TIF District ERZ Tax Credits (NH) R&D Tax Credit (NH) FTZ (US) Anticipated Development 50 Acres Under Agr. Lot #1 Sold Jan 2013 Lot #33, 34, 35 Avail. 102 Addl Acres under Investigation 2003 Value $5,128,800 330,865 ft2 2012 Curr Value $14,712,207 +186.854% inc 423,666 ft2 Revenue $359,689 2030 Est. Value $34,740,000 +236.13% inc. 1,596,900 ft2 Revenue $892,223
If its happening in NH, its happening in Rochester! - Economic Development - Planning, Zoning - Code Enforcement - Building Safety @RochesterEDC www.thinkrochester.biz Karen Pollard, CEcD, EDP Deputy City Manager/Director Community Development Division Karen.pollard@rochesternh.net

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Seacoast Leadership 2013 TIF Case Study

  • 1. Granite State Business Park Project of the Year 2012 TIF District Case Study Seacoast Leadership Economic Development Day May 1, 2013
  • 2. Business Park Development 1989 Howard Katz, Developer Phase 1 97 Ac Phase 2 55 Ac No Access to Phase 2 Off to a Great Start! Prime Tanning 1994 Salmon Falls Precision 1994 Techniweave 1999 Frisbie Hospital Secure Storage 1999 Pease International Tradeport 1992
  • 3. Granite State Business Park 2010 62.2% of Phase 1 is developed 421,500 sq ft/ 5bldg 425 Employees Assessed for Taxes $15,740,000 Payroll $19 MM Manufacturing Changes Prime Tanning closed, Rand-Whitney Corp. Salmon Falls Precision closed, Multi-Tenant Techniweave acquired by Albany International, bldg expansion in 2007 Industrial Condos 2006 & 2009 Still owned by same developer
  • 5. Local Economic Challenges Great Recession Existing Companies with Unique Products Thompson Center Arms announces relocation to Advanced Manufacturing MA INCENTIVES! Composite Materials Lack of available Capital, Developer willing to increased underwriting sell @ discount standards Expansion Lots of available real opportunities estate CHEAP! Transition in required mfg skills
  • 6. TIF District & Program Plan Financing & Development Program Plan: Defines district, budget, use of funds, etc. Adopt by public hearing. See RSA 162-K:6 and 162-K:9. Plans must contain a complete statement as to the public facilities to be constructed, the open space to be created, the environmental controls to be applied, the proposed reuse of private property, and the proposed operations of the district after the capital improvements within the district have been completed.
  • 7. Important Features! Multiple TIF Districts are allowed, HOWEVER: Do not exceed 8% of Assessed Value for community (or 16% for all combined with districts that have outstanding bonds); OR, 5% of total acreage! (or 10% of total acreage for bonds outstanding) Increment only accrues after date district is established! Values as of April 1. Bonds First payment must be within 5 years. Last payment no later than 30 years. Bonds are NOT to be included when computing the municipality's net debt under RSA 33.
  • 8. TIF Example Pre-construction or Original value = $1,000,000 Post Construction Value = $50,000,000 Increment or Captured Value = $49,000,000 Tax revenue on $1,000,000 Original value = $25,000 ($25 / $1,000 A.V. Tax Rate) Tax revenue on increment = $1,225,000 $25,000 to General Fund $1,225,000 to TIF for debt service, operating costs, maintenance & reserves. Increment Value is based on April 1st each year
  • 9. Critical Deal Components Internationally Competitive RFPs Two Partners Incentives - on-site and offsite +$9 M blighted location RSA 205 never used City investment in BIG infrastructure +$5 Million Access to Site Wetland mitigation package Utilities, relocation of PSNH transmission lines Critical Timing of Construction Collaborative Partnerships City Staff & Elected Officials DRED, DES (EPA, Army Corp) Governor Lynch NH Northcoast RR PSNH, Unitil, FairPoint Labor availability & cost Skills shortfall Training program for 20+ years worth of employees Great Bay Community College Creteau Technology Center Advanced programs $4 M NH, $19.9 M US
  • 10. Safran/Albany LEAP Facility This Albany & Safran project will create: 343,000 ft2 facility + 90,000 ft2 exp $100MM CAPEX 55 acres under agreement for exp 689 FT jobs $41MM Annual Payroll 911 indirect jobs $27.5MM Payroll Total Economic Output (NH) $232,781,044 Tax Increment pledged for ~15 years to debt service of $9 MM
  • 11. Granite State Business Park 2013 Expanded to 252 ac Development District +$5M Infrastructure Incentives TIF District ERZ Tax Credits (NH) R&D Tax Credit (NH) FTZ (US) Anticipated Development 50 Acres Under Agr. Lot #1 Sold Jan 2013 Lot #33, 34, 35 Avail. 102 Addl Acres under Investigation 2003 Value $5,128,800 330,865 ft2 2012 Curr Value $14,712,207 +186.854% inc 423,666 ft2 Revenue $359,689 2030 Est. Value $34,740,000 +236.13% inc. 1,596,900 ft2 Revenue $892,223
  • 12. If its happening in NH, its happening in Rochester! - Economic Development - Planning, Zoning - Code Enforcement - Building Safety @RochesterEDC www.thinkrochester.biz Karen Pollard, CEcD, EDP Deputy City Manager/Director Community Development Division Karen.pollard@rochesternh.net