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Lykan TIF heads to voters

by | Feb 6, 2019 | Business, News

Agreement among 6 warrant articles at Feb. 11 Special Town Meeting

At their meeting on Jan. 29 selectmen unanimously approved the proposed tax increment financing agreement, (TIF) for Lykan Biosciences, LLC, moving the proposal one step closer to its next required approval at a Special Town Meeting to be held on Monday, Feb. 11, at 7 p.m. at the Hopkinton Middle School auditorium.

A total of six articles will be addressed at the Special Town Meeting:

Article 1: Unpaid bills from previous years

Article 2: Supplemental appropriation for repair of Lake Maspenock dam

Article 3: Supplemental appropriation for fire communication system

Article 4: Approval of tax increment financing agreement — Lykan Bioscience, LLC

Article 5: School Department Mitigation Fund (sponsored by School Committee)

Article 6: School Department Stabilization Fund (sponsored by Town Manager/Board of Selectmen)

Details of the finalized TIF agreement were presented to the board by Town Manager Norman Khumalo at an earlier meeting on Jan. 25 and include exemptions in the first three years of 90 percent, followed by 80 percent for the next two years, 50 percent for years six and seven and 20 percent for the final three years.

“All in all,” said Khumalo, “the total TIF relief for Lykan is $416,788 and the total new taxes for the town based on the new growth will be $228,512 for the 10-year period.”

Khumalo also explained to the board that under state law a company applying for a TIF can also qualify for up to 100 percent exemption from personal property taxes. After negotiations with town staff, the Lykan TIF includes exemptions for personal property taxes ranging from 90 percent for the first three years to 80 percent in the third and fourth year and ending with a 60 percent exemption for the final five years of the agreement.

Lykan also might qualify for a manufacturer designation from the state and, if approved, will then qualify for 100 percent exemption for personal property taxes. If the designation is not approved, the existing schedule will remain in place.

In the original pitch to the board made earlier in January, representatives from Lykan promised to create a total of 125 permanent full-time jobs over a five-year period. The finalized TIF agreement requires Lykan to create 125 permanent full-time jobs during the 10-year TIF, with specific jobs per year and with annual average salaries, excluding benefits, of $98,000 or more per job; provided however, that the company shall not be in default of the agreement if some of the jobs created fail to meet that standard, as long as the overall average salary is equal to or greater than $98,000 per job.

Other requirements of the TIF require Lykan to give priority to town residents when hiring new employees and advertising online to encourage residents to apply as well as investing, together with the landlord, approximately $10 million in renovations to the property and an additional $2 million in personal property to be located at 97 South St.

Priority in the selection of contractors, vendors and suppliers also is requested in connection with the construction of the property, and at a minimum Lykan is expected to advertise in local newspapers and online procure sites to encourage local businesses to submit bids.

Lykan also is required to limit water usage at the property, to create an internship program for Hopkinton students and to create an employee volunteer program.

Annual reports for all requirements of the TIF agreement are required to be submitted to the town on a yearly basis, and failure to comply with any of the requirements will result in the exemption from real property taxation being reduced to 0 percent for the subsequent fiscal year. In addition, if Lykan is at any point in default of the agreement, the Board of Selectmen may take action to decertify the TIF.

Representatives from Lykan Bioscience at the Jan. 29 meeting thanked the selectmen and Town Manager Norman Khumalo and town staff for all of their efforts to reach this positive outcome.

“We hope that we will be able to have a nice partnership with the town,” said Board of Selectman chair Claire Wright.

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