Southwick Clothing will pay property taxes on its $5.75 million purchase of the former Lowes Home Center store, but receive a break on taxable improvements.
Mayor James J. Fiorentini signed a Tax Increment Financing (TIF) agreement with Southwick which spreads out property assessment increases in exchange for jobs and other factors. City councilors are being asked to ratify the agreement.
“Manufacturing is alive and well in Haverhill. Our TIF agreement enables us to see a long-term commitment to manufacturing by Southwick in the city, as well as the creation of new manufacturing jobs, a good portion of which will be targeted to Haverhill residents,” Fiorentini said Friday.
Webster Bank of Boston financed the property purchase. It is not known whether Southwick sought local bank financing.
Southwick is currently located across the street at 20 Computer Drive near the intersection of Interstate 495 and route 97 (Broadway). The fate of the sole remaining retail tenant, Target, 35 Computer Drive, is unclear. Target Corporation recently announced it will close 11 locations as of Feb. 1, 2015. Haverhill was not on the list.
“The decision to close a Target store is only made after careful consideration of the long-term financial performance of a particular location,” the company said in a statement.
Fiorentini said Haverhill was in danger of losing Southwick. “This agreement will save 468 manufacturing jobs, expand the company to a larger location in Haverhill, and increase the number of jobs in the future to approximately 538 employees,” he said.
The Commonwealth of Massachusetts Economic Development Incentive Program administers TIF, according to the state. “Participating companies may receive state and local tax incentives in exchange for job creation, manufacturing job retention and private investment commitments.”
“At no point will Southwick pay less in taxes than the property is currently worth, Fiorentini said.
How Tax Increment Financing works.