Crane's stationery division in North Adams is adding at least 74 full-time positions and hopes to add more.
NORTH ADAMS, Mass. — The City Council on Tuesday night unanimously approved financial incentives for Crane & Co.'s stationery division but not without some sharp questions about the conditions.
The paper company, which several years ago had considered leaving the city for Dalton, has instead made its location in the Hardman Industrial Park its headquarters and is expanding its work force with the acquisition of William Arthur Stationary of Maine.
Mayor Richard Alcombright said the agreement was for a special tax assessment and the designation of the Crane location as an Economic Opportunity Area.
He described the company as coming full circle, from planning to leave to having 140 employees at this time last year to 206 now, with at least 74 being hired.
The STA provides for property tax relief over a period of four years, beginning with a 100 percent exemption the first year, at $116,000, and 25 percent the last. The agreement is expected to cost the city $290,000 in tax revenue over four years.
In return, Crane is required maintain its current 206 full-time employees, hire at least 74 new full-time workers and maintain at least 243 full-time positions through the life of the agreement. The company is also investing about $5 million in information technology, in relocation of services and equipment, new equipment and interior changes.
The tax agreement would go into effect on July 1 (the start of the city's fiscal year) and the 74 jobs would have to be filled by September.
All the councilors were supportive but there were concerns over the amount of the "front-loaded" tax exemption, how it would be covered in the budget and how the company could be made to live up to its promises.
In answering questions from the council, the mayor said the usual tax incentive financing agreement could not be used because there were no significant capital improvements of the building or large piece of equipment. He said the tax agreement would only cover one of Crane's buildings and not include personal property taxes.
Councilor Lisa Blackmer noted that as a manufacturing facility, Crane would not be assessed personal property taxes and expressed concern that the influx of expected new workers and personal spending would not offset the nearly $300,000 loss in revenue.
"Yes we want manufacturing, yes we want jobs, but this is $300,000 or $400,000," said Blackmer. "It takes a lot of property taxes with a $2,500 tax bill to make up $300,000."
If William Arthur workers were moving from Maine to keep their jobs, she said, "that's not helping 85 Northern Berkshire families."
The mayor said there was no way to control that aspect but the number was expected to be 20 or 25: "Bringing new folks to the community is not a bad thing."
Councilor John Barrett III questioned the mechanisms for ensuring Crane lived up to its agreement and pointed out that the company could cut the number of new jobs in half after September. It had already laid off workers last year, some who haven't been hired back.
"We're now giving you in excess of [$300,000] in cold cash," said Barrett, adding that the city had provided $500,000 in incentives when the company had first moved to the industrial park.
Richard Kendall of Crane said there was no intent "to pull the wool over anybody's eyes."
"It wouldn't make sense for Crane to enter into a deal for 34 jobs," he said. "We're not intending it to be 34, we'd really like it to be a lot more than that. We're intent on bringing our business here and making this successful and we want to bring in more jobs ... We're bringing jobs in, we're glad to do it, we like the work force here, we like the buildings. This is a standard agreement available to any company in the commonwealth. We just filled out the paperwork.
"We're anxious to get the William Arthur plant closed and get that activity down here."
The STA is for the one building assessed
at $3,545,900 with a tax bill of $116,000.
Year One: 0
Year Two: $29,000
Year Three: $58,000
Year Four: $87,000
Year Five: $116,000
The total loss over four years at that rate is $290,000.
Alcombright said the company would be required to report to the City Council by Jan. 31 of each year of the agreement how many full-time jobs were occupied and the amount of investment made. Should the company fail to live up to the conditions, the agreement provides for full reclamation of benefits to the city and any related costs.
Blackmer and Barrett both indicated the agreement should go to the Finance Committee and thought it should have come before the council earlier. Blackmer said she would like the input of absentee Councilor Alan Marden, the committee chairman and the council's "economic development guru."
Alcombright said the agreement had to go before the state Economic Assistance Coordinating Council for the board meeting on March 26. He was amenable to setting a meeting in between then. However, after nearly an hour of discussion, Blackmer declined to second Barrett's referral to committee, feeling that Marden would have approved.
Several other councilors expressed appreciation for Crane's decision to remain and grow in North Adams. Councilor Jennifer Breen told Kendall to ignore the politics.
"We all argued strenously to bring manufacturing back to the city and I just find it bizarre you would be interrogated like this," said Breen. She particularly took aim at Barrett for making what she said were political "platitudes."
"This is not about politics, it's about doing what's best for the city of North Adams and its people," retorted Barrett. "I support what's going on here, I want to see, however, we get the best deal possible."
The mayor said the council should consider Crane's investment in the city over the last two years despite financial difficulties.
"The last two or three cycles, Crane [stationery] has lost a significant amount of money so what this commitment is helping to do is helping to maintain, helping to strengthen there investment in the community and help them maintain these positions over time."