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Mayor Richard J. Kos today announced U.S. Tsubaki’s request for tax incentives to complement their proposed expansion in the city will proceed after the City Council unanimously approved it on March 3rd. The company is considering an 80,000 square foot addition to their property.
This project also needs to be approved by the state Economic Assistance Coordinating Council where they will certify the City’s tax agreement and also vote on the level of Investment Tax Credit awards to the company. US Tsubaki is also having a board meeting in Japan during the week of March 21st where they will be discussing their North American expansion.
The deal calls for U.S. Tsubaki to realize a tax savings of 70% on their new construction starting in fiscal year 2018. The savings were decrease by ten percent each year until fiscal year 2026, when the tax savings will be five percent for both fiscal year 2026 and 2027. The tax savings are only on the increased value of the property from the 80,000+sf expansion. Throughout the life of this agreement U.S. Tsubaki will continue to pay the full value on their current structure.
The tax incentive will not effect fiscal year 2016 or 2017 as the company will be paying taxes on the current building valuation.
Presently located at 106 Lonczak Drive in the city, the company is considering an expansion that will total about $11.5 million. $4.5 million will be spent on construction with another $6 million on equipment. $1 million will be spent on other expenses.
“This Tax Agreement will help to ensure that a great company with a global brand and good paying jobs will continue to grow and prosper in our City,” said Michael L. Vedovelli, Director of Community and Economic Development for the City. “This expansion will create opportunities for long-term economic growth for Chicopee”
“I am glad to work with City Council to incentivize the expansion of U.S. Tsubaki,” said Mayor Kos. “They are a significant taxpayer and employ many Chicopee residents. Their proposed expansion shows a substantial commitment to the City and we are glad to work with them to help make this project happen. ”
“U.S Tsubaki has been a great partner to the City of Chicopee,” said City Council President John Vieau. “We welcome their expansion and hope that this agreement will allow them to proceed with making it a reality.”
This economic opportunity is part of the inter-municipal agreement between the cities of Chicopee, Holyoke, and Westfield. The application filed by U.S. Tsubaki calls for 35 new full-time jobs, which creates positive economic opportunity for residents of Chicopee and the surrounding area.