Barry Coflan, a senior vice president at Schneider, said the tax reduction known as a TIF, or tax-increment-financing plan, offered by Andover and approved by the state was a big part of the reason the company made the move.
“The TIF was extremely important,” he said. “If we hadn’t had these incentives, I don’t think it (the new facility) would have been approved by the company.”
Last December, the state’s Economic Assistance Coordinating Council approved a TIF plan that allows the company to increase the value of the property it is moving into but not pay the full taxes the property could bring in for the first five years.
For three years, the company will pay only the tax owed for the present value of the property, which up until recently was occupied by a vacant office building. For the fourth and fifth years of the TIF, the company will pay 65 percent of the increase in value. The full tax value will be paid in subsequent years.
Meanwhile, the company is expected to retain 65 existing jobs and relocate 525 more to Andover in the company’s first year, according to Planning Director Paul Materazzo. For each of the five years after that, 15 more jobs must be added.
Coflan said the number of jobs will actually exceed that estimate, as the $30 billion company is growing by about 15 percent a year. The company employs 30,000 people in North America and 140,000 worldwide. It will have 730 employees when the 235,000-square-foot facility opens in December of this year. The employees are being transfered from North Andover, Billerica and Rhode Island.
An existing office building on the site is being renovated, while workers are attaching a 70,000-square-foot, curving addition. The project is estimated to cost about $20 million.
When it’s done, it will be a showcase for the company’s energy-efficiency products, such as advanced heating and air-conditioning systems, lighting and other power-saving technology. Clients and employees from all over the world will come to the site to see how the company’s award-winning thermostats, for example, operate.