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CITY OF SALEM, MASSACHUSETTS
` BUILDING DEPARTMENT
120 WASHINGTON STREET,3" FLOOR
TEL. (978) 745-9595
FAX(978) 740-9846
KIMBERLEY DRISCOLL
MAYOR THOMAS STYIERRE
DIRECTOR OF PUBLIC PROPERTY/BUILDING COMMISSIONER
April 6, 2017
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Andy King
A and J King Artisan Bakers LLC
48 Central Street
Salem Ma. 01970
re: zoning for 135-139 Boston Street
Dear Mr. King ,
I have reviewed your proposed use for the property above. Your proposed bakery and possible
retail component, in my opinion conform with the City of Salem Zoning Ordinance, table of
allowed uses. If you have any other questions, please let me know.
Sincerely,
Thomas StTierre
Building Commissioner/Zoning Officer
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CITY OF SALEM, MASSACHUSETTS
BUILDING DEPARTMENT
120 WASHINGTON STREET,3"°FLOOR
TEL. (978) 745-9595
FAx(978) 740-9846
KIMBERLEY DRISCOLL
MAYOR THOMAS STTIERRE
DIRECTOR OF PUBLIC PROPERTY/BUILDING COMMISSIONER
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TAX INCREMENT FINANCING AGREEMENT
CITY OF SALEM, MASSACHUSETTS
and
NAUMKEAG,LLC
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This agreement is made this 15 day of %A74' ,2017 by and between the CITY OF SALEM, a municipal
corporation duly organized under the laws of the Commonwealth of Massachusetts,having a principal place of business at
City Hall,93 Washington Street, Salem,Massachusetts, 01970, acting through the Mayor Kimberley Driscoll (hereinafter
called"the CITY")and Naumkeag,LLC,a Massachusetts limited liability corporation with a principal place of business
at 135 Boston Street, Salem, MA 01970(hereinafter called"the COMPANY"). The base year for this Agreement will be
FY2017. The exemptions associated with this Agreement will take effect upon the COMPANY's receipt of a permanent
certificate of occupancy for improvements made to a+/- 8,500 sq. ft. portion of a building at 131-135 Boston Street in
Salem(herein after"the BUILDING"). For exact location of BUILDING, refer to Attachment"Exhibit A."
WHEREAS, the COMPANY wishes to lease space to Salem based business A&J King Artisan Bakers and redevelop+/-
8,500 square feet of its building to accommodate said business' expansion activities; and
WHEREAS, the CITY is willing to grant tax concession in return for guarantee of the renovation of the+/- 8,500 square
foot portion of a light industrial building into a new production, retail and office facility for A&J King Artisan Bakers,
and the creation of employment opportunities for local workers; and
WHEREAS,the Salem City Council resolved on March 9,2017,to allow the use of Tax Increment Financing as a tool to
encourage economic development at 131-135 Boston Street in Salem; and
NOW, THEREFORE, in consideration of the mutual promises contained herein,the parties do mutually agree as follows:
A. THE COMPANY'S OBLIGATIONS
I. The COMPANY shall renovate the BUILDING identified as Salem Assessor's Parcel ID 16-0128-0 and further
described in Attachment"EXHIBIT A."
2. During the life of the Agreement, if the COMPANY decides to sell the BUILDING or the business or to
otherwise transfer control of the BUILDING or business and/or operations thereof,the COMPANY shall give the
CITY at least three months written notice of said sale or transfer. Said notice shall be given by certified mail,
return receipt requested,to the Mayor, City Hall, 93 Washington Street, Salem,Massachusetts, 01970.
B. THE CITY'S OBLIGATIONS
I. The CITY shall grant a tax increment financing exemption to the COMPANY in accordance with Massachusetts
General Laws, Chapter 23A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall
be granted on the improvements to the BUILDING. Said exemption shall be valid for a period of Five(5)years,
beginning with the first fiscal year that the COMPANY receives a permanent certificate of occupancy for the
improvements made to the BUILDING. For the purposes of this AGREEMENT,the base value of the TIF will be
the FY2017 assessed value of the+/- 8,500 sq. ft. portion of the BUILDING. The FY2017 assessed value of the
portion of the BUILDING undergoing the forthcoming renovations at 131-135 Boston Street in Salem is
$475,000. During each year of this Agreement, the COMPANY will pay taxes based on the portion of the value
of the BUILDING which is not exempt under this Agreement.
2. The exemption schedule on the value of the BUILDING works as follows: for each of the Five(5)years of this
AGREEMENT, the COMPANY will pay taxes on a percentage of the value of the BUILDING and be granted an
exemption of a percentage of the full value of the BUILDING. In Year six(6),the COMPANY will pay taxes on
the full value of the BUILDING.
YEAR EXEMPTION
Year 1 100%
Year 2 80%
Year 3 60%
Year 40%
Year 5 20%
C. OTHER CONSIDERATIONS
1. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The CITY
reserves the right to review and renegotiate the Tax Increment Financing Agreement if the A&J King Artisan
Bakers business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement.
2. If the COMPANY decides to expand the BUILDING at any time during the life of the Tax Increment Financing
Agreement, the CITY and the COMPANY may renegotiate the Tax Increment Financing Agreement to exempt
all or part of the expansion from property taxes. The exact amount of that exemption will be determined at the
time of the expansion.
Executed as sealed instrument on the day and year first above written.
CITY OF SALEM NAUMKEAG,LLC
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Kimberley Driscoll,Mayor Peter A. Copelas, Man ger
gONDIT
CITY OF SALEM
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In City Council, February 23, 2017
RESOLUTION
WHEREAS, Naumkeag, LLC (hereinafter "Naumkeag") wishes to renovate a +/- 8,500 square
foot portion of the building located at 131-135 Boston Street, Salem, MA, known as Assessor's
Parcel ID 16-0128-0 for the purpose of leasing it to A&J King Artisan Bakers (hereinafter A&J);
WHEREAS, A&J will use the renovated space for a new office, production, and retail facility as
part of its planned expansion; and
WHEREAS, the City of Salem (hereafter "CITY") is willing to grant tax concessions in return for
a guarantee of the renovation of this portion of 131-135 Boston Street for the purposes of
leasing it to A&J for its business expansion activities;
NOW, THEREFORE, BE IT RESOLVED that the Salem City Council hereby
• Endorses the use of Tax Increment Financing as a tool to encourage economic
development at 131-135 Boston Street, and;
• provides for a tax exemption at 131-135 Boston Street for a period of five (5) years,
beginning the first full fiscal tax year after Certificate of Occupancy is issued for the new
building at 131-135 Boston Street in Salem in accordance with the schedule below:
Term Exemption %
1 100%
2 80%
3 60%
4 40%
5 20%
Said exemption being in accordance with M.G.L. Chapter 23A, Section3E, Chapter 40, Section
59, Section 5.
BE IT FURTHER RESOLVED that the Mayor is hereby authorized, on behalf of the City, to
enter into a Tax Increment Financing Agreement, a copy of which is attached hereto, with
Naumkeag, LLC; and that the Naumkeag, LLC can proceed in applying to the
Commonwealth's Economic Assistance Coordinating Council (EACC) for approval of the
agreement.
In City Council February 23, 2017
Referred to the Committee on Administration and Finance co-posted with Committee
of the Whole
In City Council March 9, 2017
Adopted
Approved by the Mayor on March 13, 2017
ATTEST: CHERYL LAPOINTE
CITY CLERK
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CITY OF SALEM, MASSACHUSETTS
Kimberley Driscoll
Mayor
March 21, 2017
Re: Support of Local Incentive Only Application for Naumkeag, LLC, 131-135 Boston
Street, Salem
Dear Members of the EACC:
I am writing to express my strong support of the local incentive only application that will come
before you on March 22, 2017, in regards to the tax increment financing agreement that was
recently approved by the Salem City Council and executed by me and Mr. Peter Copelas,
Manager of Naumkeag, LLC. I am sorry to not be able to join you in person to'express this
support.
Mr. Copelas owns property at 131-135 Boston Street in Salem, which once housed a commercial
laundry business, but has been vacant/underutilized for the better part of the last five years. Mr.
Copelas intends to lease (a lease agreement has already been signed) a portion of this property to
A&J King Artisan Bakers of Salem. A&J King Artisan Bakers (A&J) plans to expand its
business and wholesale operations into this location, and to provide for a small retail
(bakery/cafe) component.
A&J opened its doors in Salem in June of 2006. Since then, the business has gained tremendous
notoriety as a destination for fresh baked goods that are made with locally sourced products.
With revenue exceeding $1.6 million last year, the business has been quite successful. That said,
they have outgrown their current location at 48 Central Street in Salem. As a result, A&J has
had to forgo numerous lucrative accounts because it currently does not have the capacity to meet
the demands of those potential clients.
Mr. Copelas will retain ownership of the property and lease a portion of it to A&J, which will'
give the business an additional 7,447 square feet of storage, office, and production space. The
total amount of investment in this project when considering both hard construction costs and
personal property will be in excess of$860,000. A small percentage of the new space would be
designated for retail sales (approximately 22%); the remaining space will be dedicated to larger-
scale baked goods production.
As a result of this planned expansion and investment, A&J, which currently employs 31 full and
part-time employees, in year one will hire an additional 15 full-time and 16 part-time employees,
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with another five full-time employees to be hired in year two, post-expansion. The City's
exemption of a little more than a projected $41,000 over five years is a worthy investment to see
this home-grown business expand, rejuvenate an underutilized property, and hire more local
workers.
The planned joint investment coming from Naumkeag, LLC and A&J will provide excellent jobs
for those in the food service and production industry. It should be noted that A&J provides a
series of benefits to its employees, including health insurance, which is a rarity among businesses
of this size and in this industry. I am also encouraged that A&J chose to stay and grow in Salem,
and to invest resources at a location on Boston Street, which is a vital entrance corridor to the
city's downtown. For these reasons and others previously stated, I respectfully request that the
EACC approve this local incentive only application. Thank you for your consideration.
Sincerely,
kWa
Kimberley Driscoll
Mayor
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