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THERMAL CIRCUITS- EDIP ANNUAL REPORT - iP/ 77F I 8- ]-01 2= 12PM�THEPPAAL CIRCUITS ;9]8]413420 R 1/ z A� !1 unnnnnav9" e1"�'i4L. in''=tEiVED Illilllllllllllll1 1 f 9 ��II speciatur ag in the design,ertprteenn�jand production of surface heaters,air heaters molded heaters, 11111111111111111 CI CUM heater assemblies,arta infrared paries mittf fs r,'1 L: 1.2 InuummY11 SALEM PLANNNG DEPT August 07, 2001 City of Salem Planning Department .City Hall Salem,MA 01970 Fax. 978-740-0404 The following is a copy of the 2001 Certified ProjecUExceptional Opportunity Annual Report for your files. Please do not hesitate to contact us,if you have any questions. Very truly yours, Thermal Circuits. Inc. Shirley A n Controll Page 1 of 2 S�RVIryG. Thermal Clrcults Inc. One Technology Way Technology Park Salem, Msssachusetls 01970-7000 PHONE 800.808.HEAT(4328) EMAIL 808heatpthermalcircuits.com WEB w w.thermalcircults.com FAX 978.741.3420 E A- 7-01 ; 2: 12PM;7HERMAL CIRf_UITS ;3987413420 # 2/ 2 FECAL YEAR 1001 ECONOMIC DEVELOPMENT INCENTIVE PROGRAM ANNUAL REPORTING FORM ` I. CONTACTINFORWTION. (Please print or type) Business Name: Ther t i s_ Inc. Address: One Technology Way City/State/Zip: Salem, 14A 01970 Contact Person: An ony a n, res en 1r ey X. Gaghdri, Md. roller Telephone: Wi j745-1162 Fax: (978)741_3420 Date Project Was Certified by the SACC: 2. NEW HIRES AT PROJECT LOCATION(Only Permanent Full-Time Jobs): FY2001 Hires(7/1/2000 through 6/30/2001): 1 Number of FY2001 Hires ThatReside in the Economic Target Area: 0 Total Hires(Date of Certification by EACC through 6/30/2001): 56 Number of Total Hires That Reside in the Economic Target Area: 30 Average Wage of Employees Hired since Date ofEACC Certification:S 8.11 3. TOTAL IAWESTMENTAT PROJECT LOCATION.- FY2001 Investment('7/1f2000through6/302001): S 37,861 - Total Investment(From Date of Certification by SACC through 6/302001):$ 3,923.541-- 4. ,923,541_- 4. STATE BENEFITS: Amount of 5%EOA Tax Credit Claimed: FY2001 $ 0 Total $ 0 Amount of 10%Abandoned Building Tax Deduction Claimed in FY2001: $ 0 S. LOCAL BENEFITS: Type of Incentive Received(circle onSTA FY2001 Property Taxes Paid to MuniciEs, 21.152.86 FY2001 Property Taxes Exempted tTA: St a fini xA Total Taxes Paid to Municipality sin $ in ano_na. Total Taxes Exempted by Municipality sinceDate of Certification: $ 171.186.21 6. CERTIFIED PROJECT STATUS: (Please print or type) What is the status of the expansion project described in your Certified Project Application or Tax Increment Financing Agreement?(Please Attach Separate Description) "Completed" 7. AUTHORIZATION.- I, (print or Type name and title) Shirley A. Gagnon, Controller hereby certify that the information within this Annual Reporting Form i�true and accurate; and reflects the project's job creation and investment. 08/07/01 Signature) (Date) 8. PLEASE RETURN COMPLETED FOIRUVI B AUGUST 31, 2001 TO: George K.Mazareas,Director of Economic Assistance Economic Assistance Coordinating Council 10 Park Plaza-Suite 3720 Boston,MA 02116 Tel: (617)973-8610; Fax: (617)973-8797 a-30-00f 3!25PM;THERMAL CIRCUITS 9787413420 # t/ • TAL ' speaaliang in the design,engihe8nng and L HERM C�RCt!/.�,S production of surface heaters,air heaters,mottled he heater treater assemblies,and in( n!° ���y 2t�!prtter3 .� SALF_Nl PLANNING D'"-" August 29,2000 City of Salem Planning Department City Hall Salem,MA 01970 Fax_ 978-740-0404 The following is a copy of the 1999 Certified Project/Exceptional Opportunity Annual Report for your files_ Please do not hesitate to contact us, if you have any questions. Very truly yours, Thermal Circuits, Inc. Shirleyagnon Controlle Page 1 of 2 �SF'RV flyG 5 �Ooo\OC / 5 hY 111'x`. a \ YF FS 0'Z' y`AN Thermal i.ircuite inc. One Tec8nol Wy Way - -- — -- J ,rchnclo�}• asrx PHONE 800.808.HEAT4�o � _� Salam .41Agsach ecrkks Oy9?n_Sn00 ( 9. EliftA!}. RLa[3 dti�iT arnq lxC..^..aYt�^air Wrs4JVr4t.kiiri! sir! ,um s1R: 970.7°.1,:?-4..^.0 8-3C-00; 3:25RM;THERMAL CIRCUITS ;9787413420 # 2/ 2 FISCAL YEAR 2000 ECONOMIC DEVELOPMENT INCENTIVE PROGRAM ANNUAL REPORTING FORM 1. CONTACT INFORMATION: (Please print or type) Business Name: Tha.,nar f ycul Yrs, Tne_ Address: One Technolo&v Way City/State/Zip: Salem, MA 01970 Contact Person: Anthony A. Klein, President/Shirley A. Gagnon, Controller Telephone: (978)745-1162 Fax: (978)741-3420 Date Project Was Certified by the EACC: 03/30/95 2. NEW HIRESAT PROJECT LOCATION(Only Permanent Full-Time Jobs): FY99 Hires(711/1999 through 6/30/2000): 1 Number of FY99 Hires That Reside m the Economic Target Area: Total Hires(Date of Certification by EACC tbrough 6/3011999): ss Number of Total Hires That Reside in the Economic Target Area: 30 Average Wage of Employees Hired since Date of EACC Certification:S 7.85 Ky. 3. TOTAL INVESTMENTATPROJECTLOCATION..- FY99 Investment(7/111999 through 6/30/2000): S 41,671.- Total Investment(From Date of Certification by EACC through 6/30/2000):S 3,885,680. 4. STATE BENEFITS: Amount of 5%EOA Tax Credit Claimed FY2000 S 0 Total S 0 Amount of 10%Abandoned Building Tax Deduction Claimed in FY2000: $ 0 5. LOCAL BENEFITS: Type of Incentive Received(circle oneTIF r STA FY2000 Property Taxes Paid to Muni ci S Si 7,505.61 FY2000 Property Taxes Exempted Due TIF r STA: S 18,125.96 Total Taxes Paid to Municipality since f Certification: S 22,647-22 Total Taxes Exempted by Municipality since Date of Certification: $IJI, 6. CERTIFIED PROJECT STATUS: (Please print or type) What is the status of the expansion project described in your Certified Project Application or Tax Increment Financing Agreement?(Please Attach Separate Description) completed 7. AUTHORIZATION.- I, (print or type name and title) Shirley A. Gagnon, Controller hereby certify that the information within this Annual Reporting Form is true and accurate, and reflects the projects job creation and investment , 08/30/00 (S gnature) (Date) 8. PLEASE RETURN COMPLETED FO BYAUGUST 31, 2000 TO: George K. Mazareas,Director of Economic Assistance Economic Assistance Coordinating Council 10 Park Plaza-Suite 3720 Boston, MA 02116 Tel: (617) 973-8610; Fax: (617)973-8797 8-24-09; 3:C5AM;THERM.4L CIRCUITS ;078741.3420 T�IERMAL specializing in the design,engineering and C/RCU/TS� production of surface heaters,air heaters,molded heaters, NUUMURheater assemblies,and infrared panel emitters August 24, 1999 City of Salem Planning Department City Hall Salem,MA 01970 Fax: 978-740-0404 The following is a copy of the 1999 Certified ProjecV&ceptional Opportunity Annual Report for your files. Please do not hesitate to contact us,if you have any questions.. Very truly yours, Thermal Circuits,Inc. Shirley A agnon Controll Page 1 of 2 1 Thermal Circuits Inc. One Technology Way Technology Park Salem, Massachusetts 01970-7000 PHONE 8W.808.HEAT(4328) EMAIL 808hearCathermaicimuils.wm WEB www.thermateircuits.com FAX 978.741.3420 24-99; 3:05.AM;7HERMAL CIRCUITS ;3787413420 # 2/ ._ .f FISCAL YEAR 1999 ECONOMIC DEVELOPMENT INCENTIVE PROGRAM ANNUAL REPORTING FORM L ,CONTACT INFORMATION.• (Please print or type) Busnless Name: Thermal Circuita, Ina. Address: Ong Technningp Way City/State/Zip: Salem, MA 01970 Contact Person: Anthony A. Itlein, President Shirley A. Gagnon, Controller Telephone: 978-745-1162 Fax: - - Date Project Was Certified by the EACC: . .03z3Q-95 2. )YEW HIRES AT PROJECT LOCATION(Only Permanent FuU--Time Jobs): FY99 Hires(7/1/98 through 6/30/99): Z Number of FY99 Hires That Reside in the Economic Target Area 0 Total Hires(Date of Certification by EACC through 6/30/99): 52 Number of Total Hires That Reside in the Economic Target Area: I7o Average Wage of Employees Hired since Date of EACC Certification: S 7 g l• 3. TOTAL INVESTMENTATPROJECTLOCATION: FY99 Investment(7/1/98 through 6/30/99): S 1,343.320,. Total Investment(From Date of Certification by EACC through 6/30/99): S 3,844,009. 4. STATE BENEFITS: Amount of 5%EOA Tax Credit Claimed: FY99 S n Total S n Amount of 10%Abandoned Building Tax Deduction Claimed in FY99: S n S. LOCAL BENEFITS: Type of Incentive Received (circle one): TIF or STA FY99 Property Taxes Paid to Municipality: S 16Q1 FY99 Property Taxes Exempted Due to TIF or STA: S_ 44 ana �o Total Taxes Paid to Municipality since Date of Certification: $ 5.141.61 Total Taxes Exempted by Municipality since Date of Certification: S 133,458.39 6 CERTIFIED PROJECT STATUS.• (Please print or type) What is the status of the expansion project described in your Certified Project Application or Tax Increment Financing Agreement?(Please Attach Separate Description) 7. AUTHORIZATION.- I,(print or type name and title) Shirley A, Gagnon, Controller hereby certify that the information within this Annual Reporting Fords truielhilaccurate, and reflects the project's job creation and investment XJ 02-24-1999 .-(signature) (!Yate) Shirley Gagnon, C troller 8. PLEASE RETURN COMPLE . FO YFRIDAY,AUGUST 20, 1999 TO.- George O.George K Mazareas,Director of Economic Assistance Economic Assistance Coordinating Council 10 Park Plaza-Suite 3720 Boston,MA 02116 Tel: (617) 973-8610; Fax: (617) 973-8797 7-30-98: 18: 15 ;978 7413420 # 1/ 2 Mun cspecializing in the design,engineering and CRCUTVproduction of surface heaters,air heaters, molded heaters, heater assemblies,and Infrared panel emitters July 30, 1998 City of Salem Planning Department City Hall Salem, MA 01970 Fax. 978-740-0404 The following is a copy of the 1998 Certified Project/Exceptional Opportunity Annual Report for your files. Please do not hesitate to contact us, if you have any questions. Very truly yours, Thermal Circuits, Inc. Shirley A. gnon . Controller Pagel of 2 Thermal Circuits Inc. One Technology,Way Technology Perk Salem, Massachusetts 01970-7000 PHONE 800AW.HEAT(4328) EMAIL 808hestothermalcircuits.com WEB w Ahennalcircuits.com FAX 878.741.3420 7-30-98; 18: 15 ;978 7413420 # 2/ 2 FISCAL YEAR 1998 ECONOMIC DEVELOPMENT INCENTIVE PROGRAM ANNUAL REPORTING FORM Business Name: Thermal Circuits, Inc. Address: One Technology Way Contact Person: Anthony A. Klein, President/Shirley A. Gagnon, Controller Telephone: 1-978-745-1162 Fax: -9 - - Fax: 1-978-741-3420 NEWHIRESAT PROJECT LOCATION: (Count Only Permanent Full--Time Jobs) FY98 Hires(7/1/97 through 6/30/98): 17 Number of FY98 Hires That Reside in the Economic Target Area: 7 Total Hires(Date of Certification by EACC through 6/30/98): 50 Number of Total Hires That Reside in the Economic Target Area: 29 Average Wage of Employees Hired Since Date of EACC Certification: $ 7.31 TOTAL INVESTMENTAT PROJECT LOCATION.• FY98 Investment(7/1/97 through 6/30/98): $ 133,967. Total Investment(Date of Certification by EACC through 6/30/98): $2,500,619, STATE BENEFITS: Amount of 5%EOA Credit Claimed: FY98$ 0 Total$ 0 Amount of 10% Abandoned Building Tax Deduction Claimed in FY98: $ 0 LOCAL BENEFITS: FY98 Property Taxes Paid to Municipality: $ 1,726.93 FY98 Property Taxes Exempted Due to Tax Increment Financing or Special Tax Assessment: $ 44,473. Total Taxes Paid to Municipality Since Date of Certification: $ 3,450.40 Total Taxes Exempted By Municipality Since Date of Certification: $ 88,949. What is the status of the expansion project described in your Certified Project Application or Tax Increment Financing Agreement? (Please Attach Separate Description) **Note: New addition in process of being built. Please return this form by August 1, 1998 to: Sean Calnan,Director Economic Assistance Coordinating Council Massachusetts Office of Business Development 436 Dwight Street-Room B-40 Springfield,MA 01103 Tel: (413) 784-1580; Fax: (413)739-9175 08/21/97 14:48 05087413420 THERMAL CIRCUITS fa001/002 Off "' MA� speciaHi3ng in me design,engineering and /p CIRCUITS _ production of surface heaters;air hn@Hers, molded heaters, ■ I CUIT heater assemblies, and infrared panel emitters August 21 , 1997 City of Salem Planning Department City Hall Salem, MA 01970 Fax: 508-740-0404 The following is a Copy of the 1997 Certified Project/Exceptional Opportunity Annual Report, for your files. Please do not hesitate to contact us, if you have any questions. Very truly yours, T HER MAL CIRCUITS INC. X/ Shirley A.' agnon Control l er Page 1 of 2 Thermal Circuits Inc. One Technology Way TeChhOlogy Park SalOm, Massachusetts 01970-7000 PHONE 000.800.HEAT(4328) EMAIL 800hcatuconcentrlc.not WEB hilpWthermalcircults,com FAX 508.741.3420 08/21/97 14:48 225087413420 THERMAL CIRCUITS 0002/002 1997 CERTIFIED PROJECT/"EXCEPTIONAI, OPPORTUNTTY" " A AL REPORT Business Name: Thermal Circuits, Inc. Address: One Technology Way, Technology Park, Salem, M. 01970-7000 Contact Person: Anthony A. Klein/Shirley A. Gagnon Phone: 608-745-1162 Fax: 508-741-3420 The Thermal Circuits, Incro £ed project/"exceptional opportunity" was approved on 03-30-95 NUMBER OF JOBS CREATED AS A RESULT OF CERTIFIED PROJECT/ "EXCEPTIONAL OPPORTUNITY": FY97 Total to Date New Aires (7)1/96619om) (61301" Living in ETA" Full-time Permanent Positions 5 33 22 Part-time Permanent Positions 1 6 4 Temporary Positions (if applicable) _ 2 4 Construction Jobs (if applicable) TOTAL JOBS CREATED 8 a7 27 Total Amount of Private Investment in Certified Project/"Exceptional Opportunity": $_376,133. Total in FY97 (7/1/96-6/30/97) $ 2,366,652. Total To Date in Certified Projects (as of 6/30/97) Real Estate Taxes paid to the municipality in FY97 for the Certified Project: $ 1 ,723.47 Money saved by the company from local real estate tax incentive (Tax Increment Financing or the Special Tax Assessment) in FY97: Have you used any training programs in FY97 as a part of the Certified Project/"Exceptional Opportunity"? Yes No x r If yes, please describe what training programs your company used this past year: Please Return By August 25, 1997 to the EACC, attn: Sean Caltum MA Office of Business Development, c/o STCC, One Armory Square, Building 20, Room 108, Springfield, Massachusetts 01105, Phone: (413)784-1580, Fax: (413) 739-9175 10/31/96 10:35 %297413420 THERMAL CIRCUITS fm002/002 1996 CERTIFIED PROJECT ANNUAL REPORT Business Name:-- �heFina3—Ci�Fute�—�na. Address: One TechnoingyWay, TeChnoingy Park Salem MA 01970-7000 i Contact Person:_pnrhany_xiein Phone:---,,, 745 1162 Fax:_ _ -50R-741-3420 The ertified project was approved on 03-30-95 NUMBER OF JOBS CREATED AS A RES!':T OF CE.9TIFIED PROJECT: FY96 -o Date New Hires p11/96-6/30/961 IBI3a/96Y Living in ETA• a Full-time Permanent Positions Part-time Permanent Positions 1 1 Temporary Positions (0 applicable) 2 2 1 Construction Jobs (if applicable) TOTAL JOBS CREATED 8 0 e Total Amount of Private Investment in Certifiod Project $ 1,89n,519_ Total in FY96 (7/1/95--6/30196) $ _Total To Dcte in Ce tified Project las of 6130/96) �^^" Real Estate Taxes paid to the municipality in FY9S-for the Certified Project: S 1to,476.25 Money saved by the company from I3c=! r±s! es*^22 tax incentive (Tax Increment Financing i or the Special Tax Assessment) in FY96: $ 1.QAC An rox_ Have you used any training programs in FY96 as a part of the Certified Project? Yes O No YX If yes, please describe what training programs your company used this past year: Please Return by AunustY3, 7996 to the EACC, artn: Xaren Baptista One Ashburton Place, Suite 2701, Boston, MA 02108. Far: 617 7274797 10/31/96 10:94 '$97413420 THERMAL CIRCUITS Z001/002 THERMAL FAX CIRCUITS a 5pe0191kin In the design.en Ineerin .and .. 9 g 0 0 production Of saAep healers,heater assemblies,end Infrared penal emitters y DATE: /D 3/- PHONE NO: FAX NO: 0'1�0� TO: G ATTN: i FROM: c/ SUBJECT: 7 rz9 � 71 SHEET i of '--- -- Thermal Circuits Inc. One Technology Way Technology Perk Salem, Massachusetts 01970.7000 Telephone WO-808-HEAT(4720) Facsimile SOB-741-3420 09/08/95 14:59 $7413420 THERMAL CIRCUITS 10002/002 ' 1995 CERTIFIED PROJECT ANNUAL REPORT Thermal Circuits, Inc. Business Name: Address: 4 Jefferson Avenue, Salem, MA. 01970 Contact Person: Anthony A. Klein, President Phone: 508-745-1162 Fax: 508-741-3420 The Thermal Circuits, certified project was approved on 03-30-95 NUMBER OF JOBS CREATED AS A RESULT OF CERTIFIED PROJECT: FY95 Total To Date New Hires (7/7/946/30/95) (6/30195) Living in ETA' Full-time Permanent Positions 23 23 14 _ Part-time Permanent Positions 4 4 3 Temporary Positions (if applicable) Construction Jobs (if applicable) TOTAL JOBS CREATED 27 27 17 • = Your ETA includes the following communities: Salem/Beverly Total Amount of Private Investment in Certified Project Note: Approximately $1,550,000. to be $ 75,0.0.0:, Total in FY95 (7/1/94-6/30/95) "invested" between 6-30-95 - 3-31-96 S 10.0.,000. Total To Date in Certified Project (as of 6/30/95) Real Estate Taxes paid to the municipality in FY95 for the Certified Project: S 0' Money saved by the company from local real estate tax incentive (Tax Increment Financing or the Special Tax Assessment) in FY95: $ 0 Note: Target completion date of new 32,000 sq. ft. facility is 3/96 Have you used any training programs in FY95 as a part of the Certified Project? Yes ❑ No 1X If yes, please describe what training programs your company used this past year: Please Return by August 10, 1995 to the EA CC atm: Kasen tiste One Ashburton Place, Suite 2 10 1, Boston, MA 02708; Fax: 617 727-8797 March 10, 1995 Salem Economic Opportunity Area SECTION 3 PROJECT CERTIFICATION Instructions: This application form should be completed by businesses seeking project certification. Businesses may be eligible for project certification if the business controls a facility which is located or which intends to locate or expand its operations in an ECA. The business must obtain municipal approval for the project prior to submitting the application form to the EACC. The application should be typed on 8 1/2 x 11 inch paper. The pages should be indexed and numbered. Please submit ten (10) copies of the completed application and ten (10) copies of all other required application materials to Karen S. Baptiste, Director of Economic Assistance, Massachusetts Office of Business Development, One Ashburton Place, Room 2101, Boston, MA 02108. PART A: APPLICATION INFORMATION 1. Name and address of business submitting application: Thermal Circuits, Inc. 4 Jefferson Avenue Salem, MA 01970 2. Name and address of project (if different from business): This project involves the construction of a new manufacturing facility for Thermal Circuits at 58 Swampscott Road in Salem. 3. Location of ETA: Beverly & Salem Regional ETA 4. Location of EOA: Salem EOA 5. Nature and Purpose of Project: Nature of Project: Thermal Circuits, a Salem manufacturer of heaters and heater. assemblies, intends to purchase a four-acre development parcel and construct a new, 26,000 square foot manufacturing facility in the Salem Economic Opportunity Area in*0 1 ' Salem. The building will be constructed to allow for future expansion. [According to the Salem Zoning Ordinance, the maximum allowable foot print (ground floor) is 78,408 square feet. The maximum height is 50 feet. Thus, depending on the first floor height, three to four stories could be added. If four stories are constructed, the maximum allowable building size would be 313,632 square feet (4 floors, each 78,408 square feet).] The company will continue to operate its current facility at Jefferson Avenue for at least two years, possibly longer. Purpose of Project: For Thermal Circuits, the purpose of this project is to increase its manufacturing capability. The company must expand its operations to continue to serve its customers and grow. For the City, the purposes of this project are: to retain a growing manufacturer in the City; save 81 jobs and promote the opportunity to generate new jobs; expand the City's tax base and begin the development of an industrial park off of Swampscott Road. The industrial park— approximately 29 acr s of undeveloped, industrially-zoned land- consists of six development parcels. Therm Circuits will be the first company to locate in the park. Construction of a road and infrastructure to serve the entire area will accompany development of Thermal Circuits' new facility. This infrastructure development —to be paid for with federal Community Development Block Grant funds and with a Community Development Action Grant from the Executive Office of Communities and Development—will open the entire area for development. PART B: MANDATORY REQUIREMENTS 1. Is the proposed project an expansion of an existing business that is currently located in the EOA? Yes. Thermal Circuits currently operates a facility at 4 Jefferson Avenue in Salem. The company will construct a new plant at Swampscott Road in Salem but will continue to operate its Jefferson Avenue facility for at least two years after construction of the new plant 2. Is the proposed project a new facility to be located within an EOA after the date of this application? Yes. (a) Is this the applicant business'first facility in the Commonwealtb? No. (b) How many new permanent full-time employees will be employed by the applicant business at the new facility? Approximately 12 new permanent, full-time employees will be hired in the first year and assigned to the new plant. Thereafter, approximately nine to 12 new employees per year will be hired and 2 t assigned to the new facility. (c) (i) Will the project result in the replacement or relocation of any permanent,full- time employees who work in existing facilities located in the Commonwealth? If yes, where are the facilities located and how many permanent full-time employees will be replaced or relocated?. When the new facility is complete, approximately 60 of Thermal Circuits' 81 current employees will be assigned to the new plant. Approximately 21 current employees will remain in the facility at 4 Jefferson Avenue in Salem. We anticipate that 12 new employees will be hired and assigned to the new facility in the first year. Thereafter, approximately nine to 12 new employees per year will be hired and assigned to the new facility. (ii)Provide documentation demonstrating that you are not seeking project certification or relocation for any portion of the project that is attributable to the replacement or relocation of permanent full-time employees of an existing facility already located in the Commonwealth. This project allows for the continued growth of Thermal Circuits and is more than simply the relocation of employees from one facility to another. As the answer to question c shows, some employees will be reassigned to the.new facility. However,this project generates jobs as well. To meet current orders and obligations, Thermal Circuits must keep both plants in operation. In time, it will be more efficient to move all operations to the new, modern facility off of Swampscott Road. The new facility will be built to allow for expansion. We expect that in years to come, Thermal Circuits will expand the building size beyond 26,000 square feet. The reassignment of employees from the existing plant to our new facility will be smooth and convenient. The new facility is located just 1.5 miles from the Jefferson Avenue plant. Many of the employees who walk to work will continue to be able to do so. Those who rely on public transportation will also continue to be served. It is important to note that the City of Salem has agreed to fund a reuse study for the existing Jefferson Avenue facility. This study will examine redevelopment options for the site. Both the City of Salem and Thermal Circuits are committed to pursuing a productive reuse of the Jefferson Avenue facility when Thermal Circuits vacates the building. 3. Does the proposed project involve the renovation and reuse of an abandoned building? No. 3 4. Local Employment - How many residents of the ETA are expected to be employed in a new permanent full-time jobs at the project? What actions will you take to recruit employees from among residents of the ETA? Thermal Circuits expects that most (perhaps 80%) of its new hires will be from Salem. The company plans to advertise only in the Salem Evening News. 5. Affirmative Action - describe your affirmative action goals and recruitment techniques that will be used to fill the newly created jobs. See the attached sheet for Thermal Circuits' hiring policy. The company currently employs 18 minorities out of 81 total employees. 6. Agreement Between the Business and Area banks - If the business has entered into any agreement with area banking institutions relating to the business' intention to deposit funds in these banks and the banks' intentions to commit a portion of such deposits to fund loans to businesses in the EOA,pursuant to the Massachusetts Capital Access Program, established by M.G.L. c. 23A, Section 57, provide documentation of such agreement or agreements. No such agreement exists. 7. Economic Benefits of Project Certification - Provide a description of the benefits that are anticipated for the business and the project, if the project is certified. Benefits to Thermal Circuits • The company will receive approximately $232,000 in local property tax benefits over 10 years. • The construction of a 5975,000 plant will entitle the company to $48,750 in state investment tax credits. f; • The company will receive additional state investment tax credits as a result of investment in equipment. • Construction of a new facility will enable Thermal Circuits to increase sales by 46% by 1998. • The City of Salem has agreed to finance a study of the reuse of the Jefferson Avenue facility. This study will help the company to identify parties interested in redeveloping the building and enhance the company's ability to sell this real estate. 4 Benefits to the City of Salem: • This project retains 81 jobs in Salem and adds 40 more. • The City has agreed to a 10-year tax increment financing plan with Thermal Circuits. Nevertheless, this project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. • Thermal Circuits will maintain operations at its existing Jefferson Avenue facility for at least two years, continuing to generate revenue for the City. • After all local property tax abatements expire, this project will generate $76,456 per year in property tax revenues. • Thermal Circuits plans to maintain its Jefferson Avenue facility for at least two years, providing tax revenue for the City. • Prior to Thermal Circuits' move of all operations to its new facility, the City will conduct a reuse study to determine the most productive redevelopment plan for the Jefferson Avenue facility, taking steps to ensure that the building does not remain vacant for long. 8. Likelihood of Increasing Employment Opportunities for Residents of the Project ETA - Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the project area. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full- time jobs for residents of the project area. Thermal Circuits is in the third year of an original business plan. This plan has been revised (upward) on two occasions during this time. Forecasts have been met or exceeded each year. This record of fast growth suggests that the company has both the intention and capacity to continue to fulfill our sales and employment forecasts. The company expects that 80 percent (possibly more) of these jobs will go to Salem residents. 5 GROWTH OF THERMAL CIRCUITS: 1992 TO 1998 Year Sales Total Employment 1992 $3.63 in 57 1993 $4.20 m 63 1994 $4.45 m 72 1995 $5.13 m (estimated) 85 (estimated) 1996 $5.75 m (estimated) 95 (estimated) 1997 $6.50 m (estimated) 107 (estimated) 1998 $7.48 m (estimated) 120 (estimated) 9. Other Benefits to the Project ETA - Provide any information, documentation, or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up contaminated land, job training, provision dayeare, etc.) As the first company to make a commitment to locate in the vacant area off of Swampscott Road, Thermal Circuits is the catalyst for development of a six-parcel industrial park. To develop this industrial park and serve Thermal Circuits' new facility, a road and infrastructure will be constructed, opening a total of six parcels for development. Thus this project encourages the following economic spin-offs: • Development of an industrial park. This project will enable the City to offer environmentally clean, industrially zoned land to firms interested expanding within or relocating to Salem. • Expansion of commercial tax base. The Chairman of Salem's Board of Assessors estimates that development of all six industrial parcels will generate $260,000 in property tax revenues annually. • Generation of jobs. Development of an industrial park has the potential to create 750 to 1,000 jobs. 6 PART C: SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS This project is not a real estate project. PART D: MUNICIPAL APPROVAL 1. Documentation of Municipal Approval — Attached are resolutions passed by the Salem City Council endorsing this application for project certification and the Tax Increment Financing plan negotiated by the City and Thermal Circuits. 2. Duration of Project Certification --The City of Salem approves this project for 10 years, as the attached City Council resolutions show. PART E: SUPPLEMENTAL INFORMATION 1. Name(s) of the business(es) intending to take advantage of state tax incentives Business Name: Thermal Circuits, Inc. Federal Employer Identification #: 042282863 Address: 4 Jefferson Avenue, Salem, MA 01970 Phoned (508) 745-1662 Fax: (508) 741-3420 Contact Person: Anthony A. Klein, President Type of organization (check that which applies): Corporation _X_For profit _S Corp Non-profit Business Trust _Partnership _General Partnership Limited Partnership Individual Anticipated Level of Interest: Thermal Circuits is committed to locating in the industrial park to be developed off of Swampscott Road in the Salem EOA. The company has hired architects to draw plans for the new facility and has begun to work with the land owner and the City of Salem to expedite the development and permitting processes. 7 2. A -If a corporation,please list the names and addresses of the officers and directors of said corporation, and any person and/or corporation with a f nancial interest of five percent or greater in said corporation: The following are officers and directors and owners of the company: David M. Abbott, Chairman 72 Central Street Andover, MA 01810 - Anthony A. Klein, President 35 Lexington Circle Swampscott, MA 01907 John J. Kellogg, Treasurer 27 Ledge Rock Road Concord, MA 01742 3. Please provide the name, address, phone number and contact person for any organization which may own or control the applicant organization, or who are affiliated with the applicant business organization. Not applicable.. 4. Certificate of Good Standing-Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is.a letter issued by the Massachusetts Department of Revenue. To obtain a copy of a Certificate of Good Standing Please see Attachment 1 of this application. We filed our request for a Certificate of Good Standing with the Department of Revenue on February 23, 1995. 8 RESOLUTION APPROVING CERTIFIED PROJECT APPLICATION OF Thermal Circuits, Inc. WHEREAS,Thermal Circuits, Inc. has applied for designation as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter 23A of Massachusetts General laws; WHEREAS, Thermal Circuits, Inc. meets the minimum standards of the Economic Development Incentive Program and the local economic development goals and criteria established as part of the documents creating the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS,the proposed certified project is located at 58 Swampscott Road, tax parcel # 763. The.legal description of this are is as follows and is within the boundaries of the Salem Economic Opportunity Area: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30)feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty(350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four . and 30/100 (1034.30)feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners,.dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. WHEREAS the City of Salem has agreed to offer Thermal Circuits,Inc. a Tax Increment Financing Agreement; WHEREAS, Thermal Circuits,Inc. will invest approximately $975,000 to construct a new manufacturing facility and will retain 81 jobs and create approximately 40 new permanent, full-time jobs for residents of the Beverly & Salem Regional Economic Target Area, and the City within three years. NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Thermal Circuits, Inc., and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this day of �G?�C� 199,6 by the Salem City Council. _Zz �z/�ZU.r�e-14— Date Neil J. HarAngton, M or Attest: Deborah E. Burkinshaw, City Clerk SEAL ' Commonwealth of Massachusetts Department of Revenue Taxpayer Service Certt6este Unit 215 First Street Cambridge,MA 02142 March 13, 1995 THERMAL CIRCUITS, INC. 4 JEFFERSON AVENUE SALEM, IVIA 01970 CERTIFICATE OF GOOD STANDING It is hereby certified by the Commissioner of Revenue of the Commonwealth of Massachusetts as of the above date, that the above named corporation is a domestic corporation organized in Massachusetts on October 5, 1961 and that said corporation is in good standing with respect to any and all returns due and taxes payable to the Commonwealth under General Laws, Chapter 62C, and the statutes referred to in Section 2 thereof. This certificate does not certify the corporation's standing as to unemployment insurance taxes under G.L.Ch. 151 a or taxes under any other provisions or law. No. 23352 B Deputy Chief, Taxpayer Assistance Bureau THIS IS NOT A WAIVER OF LIEN ISSUED UNDER GENERAL LAWS, CHAPTER 62C, SECTION 52, AND CANNOT BE USED FOR SUCH PURPOSE. 5349 - 32976 Mitchell Adams Mark McQuillen Commissioner Deputy Commissioner City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 I. LOCATION A. Economic O12nortuni1y Are : Salem EOA B. Municipality: City of Salem C: Tax Increment Financing (TIF) Zone: Attached are: general location map,parcel by parcel map, property lines, all thoroughfares public rights of way and easements, land use and zoning map, and the location of proposed private project. Common description of TIF Zone: The proposed Thermal Circuits TIF Zone is located off of 58 Swampscott Road in the Salem EOA. The tax parcel is #763. The legal description of this TIF Zone is: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight . hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84)feet, NORTHEASTERLY three hundred fifty (350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51)feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY,by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40)feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. 1 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. D. Narrative Description of TIF Zone --Needs . Problems and Opportunities: Designation of this TIF Zone meets the needs of, solves problems for and creates opportunities for both Thermal Circuits and the City of Salem. • Meeting the needs of Thermal Circuits: A rapidly growing manufacturer of heaters and heater assemblies, Thermal Circuits can no longer continue to operate in its antiquated,three-story, 20,000 s.f. manufacturing facility at 4 Jefferson Avenue in Salem. To meet customers' orders and continue to grow,the company must expand into a modem, one-floor, 26,0000 s.f. facility with room for further expansion. The tax benefits offered through the Commonwealth's Economic Development Incentive Program and this TIF plan will enable the company to invest in a state-of-the-art facility. • Meeting the needs of the City of Salem: To improve its ability to retain and attract new business,the City of Salem must gain,a competitive advantage over other communities with better highway access and more land available for development. The ability to offer tax increment financing, beginning with this proposal, will help Salem to retain existing industry and attract new companies to the City. • Solving problems for the City and Thermal Circuits: Approval of this TIF Zone and TIF Plan will enable Thermal Circuits to construct a new facility in Salem, solving the operational problems that stem from the company's cramped, antiquated plant. Approval of this project solves a problem for the City as well. Without designation as a TIF Zone,the land that makes up the TIF will not be developed through ordinary market forces. Public 2 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 investment and creative economic development tools are necessary to promote the development of one of the few remaining industrially zoned, environmentally clean areas of the City of Salem. • Creating opportunity for Thermal Circuits: Once in its new facility, Thermal Circuits will be able to continue its record of impressive growth. GROWTH OF THERMAL CIRCUITS: 1992 TO 1998 Year Sales Total Employment 1992 $3.63 in 57 1993 $4.20 in 63 1994 $4.45 in 72 - 1995 $5.13 in (estimated) 85 (estimated) 1996 $5.75 in (estimated) 95 (estimated) 1997 $6.50 in (estimated) 107 (estimated) 1998 $7.48 in (estimated) 1 120 (estimated) • Creating opportunity for the City of Salem: Designation of this TIF Zone and approval of this TIF plan will keep Thermal Circuits in Salem, retaining jobs, creating new jobs, expanding the City's tax base and making the City a more competitive location for business. All of these benefits are described in more detail in SECTION III: TIF ZONE & ECONOMIC DEVELOPMENT. • Creating opportunity for the City of Salem outside of this TIF Zone: Development of a new Thermal Circuits plant within this TIF Zone will serve as a catalyst for future development on the land surrounding the new facility. The Thermal Circuits TIF Zone is one of six vacant industrial parcels available at what will become a 29-acre industrial park. The City, using a state grant and Federal funds, will construct a road and infrastructure to serve all of these industrial parcels. This road construction and the tax incentives available through the Economic Development Incentive Program will keep Thermal Circuits in Salem, enable the development of the remaining five parcels and the creation of a small industrial park, generate jobs for area residents and expand the City's 3 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 tax base significantly. E. Property owners within the proposed TIF Zone: The property owner within the TIF Zone is Thermal Circuits, Inc. II. TIME The TIF Plan and TIF Zone described here will be in effect for a period of 10 years. III. TIF ZONE & ECONOMIC DEVELOPMENT A & B Economic Opportunities and Economic Benefits to the Community: Approving the proposed TIF Zone will create the following economic opportunities and benefits: 1. It will enable Thermal Circuits, a rapidly growing manufacturer of heaters and heater assemblies,to remain in Salem and develop a 26,000 s.f. manufacturing facility. 2. Retains 81 jobs in Salem. 3. Generates jobs: Thermal Circuits expect to hire at least 15 new employees in the Spring of 1995 and more 40 to 60 employees during the next three years. 4. Increases property tax revenue in the short term: During the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of Assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. 5. Increases property tax revenue in the long term: After Thermal Circuits' TIF Plan expires,the tax impact of development will be $76,456 per year. 6. Generates interest in Salem as a competitive location for business. If successfully approved, Salem's first TIF plan will demonstrate that the City can offer economic development tools to retain business. Success here will invite the interest of firms located outside of the City. 4 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 C: PROPOSED AND POTENTIAL LAND USES Thermal Circuits will construct a 26,000 s.f. manufacturing and office facility within the proposed TIF Zone. D. ZONING IN THE TIF ZONE The TIF Zone is currently zoned for business park development. E. No part of the proposed TIF Zone is a hazardous waste disposal site. IV. TIF ZONE PROJECTS A. Planned Private Project: Thermal Circuits will develop a 26,000 s.f. manufacturing and office facility in the proposed TIF Zone. Budget for Project: ITEM COST Land acquisition $ 50,000 Grading $ 50,000 Paving $ 45,260 Utilities $ 60,000 Parking lot lights $ 8,000 Contingency (less real estate) 10% $ 17,600 Engineering.(less real estate) 4% $ 7,000 Supervision $ 10,000 New building construction $975,000 Total $1,222,860 Relevant business plans: Time schedule for development: Construction will be completed and the company will occupy its new facility on September 1, 1995. Expected increases in job creation: The company will add 15 new jobs in the Spring of 1995 and expects to add 40 to 60 new jobs over the next three years. Given the company's recent strong growth,these are conservative estimates of job creation, according to company officials. 5 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 Estimates of tax revenue: During the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. After Thermal Circuits' TIF Plan expires,the tax impact of development will be $76,456 per year. B. Planned Public Projects: The City of Salem will direct a Community Development Action Grant of$260,000 to construct a road and infrastructure from the existing Swamspcott Road to the TIF Zone(the site of Thermal Circuits' new plant.) This road will serve three of the six development parcels that make up the industrial park under development off of Swampscott Road. The City will use CDBG funds to enable the completion of a road to serve the remaining three parcels. This infrastructure development will create a small industrial park. Budeet: The road is 1,500 linear feet and can be constructed for$384 per linear foot. BUDGET FOR CONSTRUCTION OF ROAD AND INFRASTRUCTURE Line Item Amount Clearance & Demolition $141,272. Street& Site Improvements $137,005 Water& Sewer Facilities $109,700 Professional Fees(3%) $ 8,867 Cost Subtotal $516,784 Contingencies(10%) $ 51,679 Total Project Cost $568,463 6 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 V. FINANCING FOR TIF ZONE PROJECTS A., Anticipated Financing for Thermal Circuits Plant: Source: Amount: City of Salem Loan $ 50,000 (for land acquisition) Fafard Real Estate Land subsidy $ 210,000 (for land acquisition) Bank Financing $ .962,860 Total $1,222,860 B. Anticipated Financing for Construction of Road and Infrastructure: Source: Amount Community Development Action Grant $268,553 (for construction of road and infrastructure of 700 linear feet) Community Development $299,910 (for construction of road and Block Grant infrastructure of 800 linear feet) C: Detailed Projection of Costs of Public Construction: The road is 1,500 linear feet and can be constructed for$384 per linear foot. BUDGET FOR CONSTRUCTION OF ROAD AND INFRASTRUCTURE Line Item Amount Clearance & Demolition $141,272 Street& Site Improvements $137,005 Water& Sewer Facilities $109,700 Professional Fees (3%) $ 8,867 Cost Subtotal $516,784 Contingencies (10%) $ 51,679 Total Project Cost $568,463 7 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 D. Will betterments be used to finance any public-private projects now or within the proposed life of the TIF Plan? Yes. The portion of the new road and infrastructure paid for with CDBG funds will be repaid to the City over time as the landowner, Fafard Real Estate, sells the remaining parcels served by that road. E. If Betterments or Special Assessments are a part of the TIF Plan: L Schedule for defrayal of construction costs: Costs will be defrayed as the land owner sells the remaining five lots for development. 2. Agreement of all participating parties in the betterment: Please see the attached Memorandum of Understanding signed by representatives of the City of Salem, Thermal Circuits and Fafard Real Estate. F. Describe how private projects will be financed: Anticipated Financing for Thermal Circuits Plant: Source: unt: City of Salem Loan $ 50,000 (for land acquisition) Fafard Real Estate Land subsidy $ 210,000 (for land acquisition) Bank Financing $ 962,860 Total $1,222,860 Thermal Circuits is weighing financing proposals from several banks. VI. TAX INCREMENT FINANCING A. Authorization to use TIF: The attached City Council resolution authorizes the City of Salem to use TIF in the Salem EOA. Also attached is a City Council resolution approving this TIF Plan for Thermal Circuits. B. Amount of proposed tax increment exemptions from 12rol2a1y taxes and applicable criteria: As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $231,621 over 10 years. Also, see the description of the proposed TIF Plan in part D of this section. C. Maximum percentage of public project costs that can be recovered through betterments or special assessments in lieu of the incremental real estate taxes: About 53 percent of the cost to develop a 1,500 foot road($299,910 of the 8 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 $568,463 project cost)will be repaid through betterment fees assessed on the landowner as the five remaining development parcels are sold. D. TIF exemption from property taxes: 1. The term of exemption is 10 years. 2. Calculation of exemption: The base valuation of the land that makes up the proposed TIF Zone is now approximately $1,300. Construction of the new plant will lead to a new valuation of approximately $38,479. The increment,therefore, is $37,179. The exemption package works as follows: YEAR THERMAL CIRCUITS PAYS 1 Only the base tax bill of$1,300.' 2 Only the base tax bill of$1,300.' 3 12.5%of the increment,plus base tax bill. 4 25.0%of the increment,plus base tax bill. 5 37.5 %of the increment, plus base tax bill. 6 50.0%of the increment,plus base tax bill. 7 62.5% of the increment,plus base tax bill 8 75.0%of the increment,plus base tax bill. 9 87.5%of the increment, plus base tax bill. 10 100%of the increment,plus base tax bill. As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $231,621 over 10 years. NOTE: In years one and two, Thermal Circuits will continue to operate its existing facility at 4 Jefferson Avenue, paying property taxes of $12,212.90 per year. Also note that during the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of Assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. 3. The effective date of increment exemption is July 1, 1995 or upon approval by the Economic Assistance Coordinating Council, whichever is later. 9 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 VIL APPROVAL OF TIF PROJECTS TIF projects are approved by the Salem City Council. The Mayor and his staff are responsible for negotiating TIF Plans and, after Council approval, executing those plans. Evidence of local approvals of the proposed TIF Zone and TIF Plan are provided here in the form of a resolution passed by the Salem City Council on Thursday,March 9, 1995. 10 THERMAL CIRCUITS 97YEAR TAX INCREMENT FINANCING PLAN Value now $47,000 This is the value of the property in its current, undeveloped state. Base tax bill $1,551 Value after plant built $1,400,000 Increment in value $1,353,000 TIF is applied to the increment. Year 1 Year 2 Year 3 Year 4 Year 5 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Thermal Pays $1,551 - Thermal Pays $1,551 Tax on increment $5,581 Tax on increment $11,162 Tax on increment $16,743 Thermal Saves $44,649 Thermal Saves $44,649 Thermal Pays $7,132 Thermal Pays $12,713 Thermal Pays $18,294 Thermal Saves $39,068 Thermal Saves $33,487 Thermal Saves - $27,906 Thermal pays base tax bill. Thermal pays base tax bill. Thermal pays taxes on 12.5%of Thermal pays taxes on 25%of Thermal pays taxes on 37.5%o increment plus base tax bill. increment plus base tax bila. increment plus base tax bill. Year Year Year Year Year 10 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Thermal Pays $46,200 Tax on increment $22,325 Tax on increment $27,906 Tax on increment $33,487 Tax on increment $39,068 Thermal Saves $0 Thermal Pays $23,876 Thermal Pays $29,457 Thermal Pays $35,038 Thermal Pays $40,619 Thermal Saves $22,325 Thermal Saves $16,743 Thermal Saves $11,162 Thermal Saves $5,581 Thermal pays taxes on 50%of Thermal pays taxes on 62.5%of Thermal pays taxes on 75%of Thermal pays taxes on 87.5%of Thermal pays full tax bill. increment plus the base tax bill. increment plus the base tax bill. increment plus the base tax bill. increment plus the base tax bill. Total property tax exemptions over nine years $245,570 'i Total property taxes paid over nine years $146,355 RESOLUTION AUTHORIZING THE USE OF TAX INCREMENT FINANCING IN THE SALEM ECONOMIC OPPORTUNITY AREA i WHEREAS. the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS. there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; NOW THEREFORE BE IT RESOLVED by the City Council of the City of Salem that: 1 (1) Tax Increri ent Financing may be used as a tool to encourage economic development within the Salem Economic Opportunity Area. (2) The Mayor is hereby authorized to execute and implement Tax Increment Financing agreements. JAdopted this 7 day of /C LGA 19 by the Salem City Council at a regular City Council meeting with a quorum present. 1 Neil J. Harrington, Mayor Date ATTEST: Deborah E. Burkinshaw, City Clerk SEAL RESOLUTION AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT FOR THERMAL CIRCUITS, INC. WHEREAS, the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS,the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to encourage business expansion and relocation to the City of Salem; WHEREAS, there is strong support for using Tax Increment Financing to encourage the development of a manufacturing facility for Thermal Circuits, Inc. off Swampscott Road . in the Salem Economic Opportunity Area. NOW THEREFORE BE IT RESOLVED by the Salem City Council that: (1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made part of this Resolution. (2) The area to be designated as a Tax Increment Financing Zone is: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100(844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty (350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51)feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry; and the above described land is shown as lot 698,on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. (3) A map of the Tax Increment Financing Zone is hereby attached as Exhibit B and made a part of this Ordinance. (4) The Tax Increment Financing Agreement shall be binding on all subsequent owners of the property in the Tax Increment Financing Zone. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement, as specified in the Tax Increment Financing Agreement. (5) A copy of the adopted Tax Increment Financing Agreement shall be forwarded to the Massachusetts Economic Assistance Coordinating Council for its approval. (6) The effective date of the Tax Increment Financing Agreement shall be July 1, 1995 or the date which the Tax Increment Financing Agreement is approved by the Massachusetts Economic Assistance Coordinating Council, whichever is later. (7) The Mayor is hereby authorized to execute and implement the Tax Increment Financing Agreement. Adopted this day of /LLi/1 19�by the Salem City Council at a regular City Council meeting with a quorum present. Neil J. Harrington, Mayoi Date ATTEST: Deborah E. Burkinshaw, City Clerk SEAL EXHIBIT A: Tax Increment Financing Agreement EXHIBIT B: Map of Tax Increment Financing Zone TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS and THERMAL CIRCUITS, INC. This agreement is made the 30th day of March, 1995, 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,Neil J. Harrington, (hereinafter called "the CITY"), and THERMAL CIRCUITS, INC., a Massachusetts corporation with a principal place of business at 4 Jefferson Avenue, Salem, Massachusetts, 01970 and KAK Realty Trust(hereinafter collectively called "the COMPANY") . This Agreement will take effect as of July 1, 1995 (Fiscal Year 1996). WHEREAS, the COMPANY wishes to locate a manufacturing facility off of 58 Swampscott Road in Salem; and WHEREAS, the CITY is willing to grant tax concessions in return for guarantee of construction of a new manufacturing facility and employment opportunities for local workers; and WHEREAS,the Salem City Council resolved on March 9, 1995 to allow the use of Tax Increment Financing as a tool to encourage economic development within the Salem Economic Opportunity Area; and WHEREAS, the Salem City Council resolved on March 9, 1995 to endorse the Tax Increment Financing Plan negotiated by the CITY and the COMPANY. NOW, THEREFORE, in consideration of the mutual promises contained herein,the parties do mutually agree as follows: A. THE COMPANY'S OBLIGATIONS 1. The COMPANY shall locate a manufacturing facility on a certain parcel of land off of 58 Swampscott Road in Salem. "The FACILITY" as used herein means a building to be constructed containing approximately 31,000 square feet plus site improvements;that is, improvements to the unimproved parcel of land as of the date of this agreement. 2. During the life of this agreement, if the COMPANY decides to sell the FACILITY or the business or to otherwise transfer control of the FACILITY or business and/or operations thereof, the COMPANY shall give the CITY at least three months 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 A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the construction of the FACILITY. Said exemption shall be valid for a period often(10) years,beginning with fiscal year 1996 (July 1, 1995) and ending with fiscal year 2006. During each year of this agreement,the company will pay taxes based on the current value of the unimproved land as of the date of this agreement(the base tax bill) and on that portion of the value of the FACILITY which is not exempted under the agreement. The exemption schedule on the value of the FACILITY works as follows: For the first two (2)years,the COMPANY will pay only the base tax bill and will be granted an exemption of 100 percent of the full value of the FACILITY. In year three,the COMPANY will pay taxes on 12.5% of the full value of the FACILITY,plus the base tax bill. In year four,the COMPANY will pay taxes on 25% of the full value of the FACILITY,plus the base tax bill. In year five,the COMPANY will pay taxes on 37.5% of the full value of the FACILITY,plus the base tax bill. In year six,the COMPANY will pay taxes on 50% of the full value of the FACILITY,plus the base tax bill. In year seven,the COMPANY will pay taxes on 62.5% of the full value of the FACILITY, plus the base tax bill. In year eight,the COMPANY will pay taxes on 75%of the full value of the FACILITY,plus the base tax bill. In year nine,the COMPANY will pay taxes on 87.5%of the full value of the FACILITY,plus the base tax bill. In year ten,the COMPANY will pay taxes on the full value of the FACILITY. C. OTHER CONSIDERATIONS I. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2. If the COMPANY decides to expand the facility 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 value of the expansion from property taxes. The exact amount of that exemption will be determined at the time of expansion. Executed as a sealed instrument on the day and year first above written. CITY OF SALEM THERMAL CIRCUITS,INC. Neil J. Hatiington, Moor cf, President otary Public My commission expires r March 10, 1995 Salem Economic Opportunity Area SECTION 3 PROJECT CERTIFICATION Instructions: This application form should be completed by businesses seeking project certification. Businesses may be eligible for project certification if the business controls a facility which is located or which intends to locate or expand its operations in an EOA. The business must obtain municipal approval for the project prior to submitting the application form to the EACC. The application should be typed on 8 1/2 x 11 inch paper. The pages should be indexed and numbered. Please submit ten (10) copies of the completed application and ten (10) copies of all other required application materials to Karen S. Baptiste, Director of Economic Assistance, Massachusetts Office of Business Development, One Ashburton Place, Room 2101, Boston, MA 02108. PART A: APPLICATION INFORMATION 1. Name and address of business submitting application: Thermal Circuits, Inc. 4 Jefferson Avenue Salem, MA 01970 2. Name and address of project (if different from business): This project involves the construction of a new manufacturing facility for Thermal Circuits at 58 Swampscott Road in Salem. 3. Location of ETA: Beverly & Salem Regional ETA 4. Location of EOA: Salem EOA 5. Nature and Purpose of Project: Nature of Project: Thermal Circuits, a Salem manufacturer of heaters and heater assemblies, intends to purchase a four-acre development parcel and construct a new, 26,000 square foot manufacturing facility in the Salem Economic Opportunity Area in t' Salem. The building will be constructed to allow for future expansion. [According to the Salem Zoning Ordinance, the maximum allowable foot print (ground floor) is 1 s� 78,408 square feet. The maximum height is 50 feet. Thus, depending on the first floor height, three to four stories could be added. If four stories are constructed, the maximum allowable building size would be 313,632 square feet (4 floors, each 78,408 square feet).] The company will continue to operate its current facility at Jefferson Avenue for at least two years, possibly longer. Purpose of Project: For Thermal Circuits,the purpose of this project is to increase its manufacturing capability. The company must expand its operations to continue to serve its customers and grow. For the City, the purposes of this project are: to retain a growing manufacturer in the City; save 81 jobs and promote the opportunity to generate new jobs; expand the City's tax base and begin the development of an industrial park off of Swampscott Road. The industrial park— approximately 29 acr s of undeveloped, industrially-zoned land- consists of six development parcels. Therm Circuits will be the first company to locate in the park. Construction of a road and infrastructure to serve the entire area will accompany development of Thermal Circuits' new facility. This infrastructure development —to be paid for with federal Community Development Block Grant funds and with a Community Development Action Grant from the Executive Office of Communities and Development—will open the entire area for development. PART B: MANDATORY REQUIREMENTS 1. Is the proposed project an expansion of an existing business that is currently located in the EOA? Yes. Thermal Circuits currently operates a facility at 4 Jefferson Avenue in Salem. The company will construct a new plant at Swampscott Road in Salem but will continue to operate its Jefferson Avenue facility for at least two years after construction of the new plant 2. Is the proposed project a new facility to be located within an EOA after the date of this application? Yes. (a) Is this the applicant business'first facility in the Commonwealth? No. (b) How many new permanent full-time employees will be employed by the applicant business at the new facility? Approximately 12 new permanent, full-time employees will be hired in the first year and assigned to the new plant. Thereafter, approximately nine to 12 new employees per year will be hired and 2 assigned to the new facility. (c) (i) Will the project result in the replacement or relocation of any permanent,full- time employees who work in existing facilities located in the Commonwealth? If yes, where are the facilities located and how many permanent full-time employees will be replaced or relocated? When the new facility is complete, approximately 60 of Thermal Circuits' 81 current employees will be assigned to the new plant. Approximately 21 current employees will remain in the facility at 4 Jefferson Avenue in Salem. We anticipate that 12 new employees will be hired and assigned to the new facility in the first year. Thereafter, approximately nine to 12 new employees per year will be hired and assigned to the new facility. (ii)Provide documentation demonstrating that you are not seeking project certification or relocation for any portion of the project that is attributable to the replacement or relocation of permanent full-Lime employees of an existing facility already located in the Commonwealth. This project allows for the continued growth of Thermal Circuits and is more than simply the relocation of employees from one facility to another. As the answer to question cl shows, some employees will be reassigned to the new facility. However, this project generates jobs as well. To meet current orders and obligations, Thermal Circuits must keep both plants in operation. In time, it will be more efficient to move all operations to the new, modern facility off of Swampscott Road. The new facility will be built to allow for expansion. We expect that in years to come, Thermal Circuits will expand the building size beyond 26,000 square feet. The reassignment of employees from the existing plant to our new facility will be smooth and convenient. The new facility is located just 1.5 miles from the Jefferson Avenue plant. Many of the employees who walk to work will continue to be able to do so. Those who rely on public transportation will also continue to be served. It is important to note that the City of Salem has agreed to fund a reuse study for the existing Jefferson Avenue facility. This study will examine redevelopment options for the site. Both the City of Salem and Thermal Circuits are committed to pursuing a productive reuse of the Jefferson Avenue facility when Thermal Circuits vacates the building. 3. Does the proposed project involve the renovation and reuse of an abandoned building? No. 3 4. Local Employment - How many residents of the ETA are expected to be employed in a new permanent full-time jobs at the project? What actions will you take to recruit employees from among residents of the ETA? Thermal Circuits expects that most (perhaps 80%) of its new hires will be from Salem. The company plans to advertise only in the Salem Evening News. 5. Affirmative Action - describe your affirmative action goals and recruitment techniques that will be used to fill the newly created jobs. See the attached sheet for Thermal Circuits' hiring policy. The company currently employs 18 minorities out of 81 total employees. 6. Agreement Between the Business and Area banks - If the business has entered into any agreement with area banking institutions relating to the business' intention to deposit funds in these banks and the banks' intentions to commit a portion of such deposits to fund loans to businesses in the EOA, pursuant to the Massachusetts Capital Access Program, established by M.G.L. c. 23A, Section 57, provide documentation of such agreement or agreements. No such agreement exists. 7. Economic Benefits of Project Certification - Provide a description of the benefits that are anticipated for the business and the project, if the project is certified. Benefits to Thermal Circuits: • The company will receive approximately $232,000 in local property tax benefits over 10 years. • The construction of a S975,000 plant will entitle the company to $48,750 in state investment tax credits. The company will receive additional state investment tax credits as a result of investment in equipment. • Construction of a new facility will enable Thermal Circuits to increase sales by 46% by 1998. • The City of Salem has agreed to finance a study of the reuse of the Jefferson Avenue facility. This study will help the company to identify parties interested in redeveloping the building and enhance the company's ability to sell this real estate. 4 Benefits to the City of Salem: • This project retains 81 jobs in Salem and adds 40 more. • The City has agreed to a 10-year tax increment financing plan with Thermal Circuits. Nevertheless, this project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. • Thermal Circuits will maintain operations at its existing Jefferson Avenue facility for at least two years, continuing to generate revenue for the City. • After all local property tax abatements expire, this project will generate $76,456 per year in property tax revenues. • Thermal Circuits plans to maintain its Jefferson Avenue facility for at least two years, providing tax revenue for the City. • Prior to Thermal Circuits' move of all operations to its new facility, the City will conduct a reuse study to determine the most productive redevelopment plan for the Jefferson Avenue facility, taking steps to ensure that the building does not remain vacant for long. 8. Likelihood of Increasing Employment Opportunities for Residents of the Project ETA - Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the project area. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full- time jobs for residents of the project area. Thermal Circuits is in the third year of an original business plan. This plan has been revised (upward) on two occasions during this time. Forecasts have been met or exceeded each year. This record of fast growth suggests that the company has both the intention and capacity to continue to fulfill our sales and employment forecasts. The company expects that 80 percent (possibly more) of these jobs will go to Salem residents. 5 GROWTH OF THERMAL CIRCUITS: 1992 TO 1998 Y= $A.lgt Total Employment 1992 $3.63 in 57 1993 $4.20 in 63 1994 $4.45 in 72 1995 $5.13 in (estimated) 85 (estimated) 1996 $5.75 in (estimated) 95 (estimated) 1997 $6.50 in (estimated) 107 (estimated) 1998 $7.48 in (estimated) 120 (estimated) 9. Other Benefits to the Project ETA - Provide any information, documentation, or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up contaminated land, job training, provision daycare, etc.) As the first company to make a commitment to locate in the vacant area off of Swampscott Road, Thermal Circuits is the catalyst for development of a six-parcel industrial park. To develop this industrial park and serve Thermal Circuits' new facility, a road and infrastructure will be constructed, opening a total of six parcels for development. Thus this project encourages the following economic spin-offs: • Development of an industrial park. This project will enable the City to. offer environmentally clean, industrially zoned land to firms interested expanding within or relocating to Salem. Expansion of commercial tax base. The Chairman of Salem's Board of Assessors estimates that development of all six industrial parcels will generate $260,000 in property tax revenues annually. Generation of ribs. Development of an industrial park has the potential to create 750 to 1,000 jobs. 6 PART C: SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS This project is not a real estate project. PART D: MUNICIPAL APPROVAL 1. Documentation of Municipal Approval — Attached are resolutions passed by the Salem City Council endorsing this application for project certification and the Tax Increment Financing plan negotiated by the City and Thermal Circuits. 2. Duration of Project Certification -- The City of Salem approves this project for 10 years, as the attached City Council resolutions show. PART E: SUPPLEMENTAL INFORMATION 1. Name(s) of the business(es) intending to take advantage of state tax incentives Business Name: Thermal Circuits, Inc. Federal Employer Identification #: 042282863 Address: 4 Jefferson Avenue, Salem, MA 01970 Phone: (508) 745-1662 Fax: (508) 741-3420 Contact Person: Anthony A. Klein, President Type of organization (check that which applies): Corporation _X_For profit _ S Corp _Non-profit Business Trust _Partnership _General Partnership Limited Partnership Individual Anticipated Level of Interest: Thermal Circuits is committed to locating in the industrial park to be developed off of Swampscott Road in the Salem EOA. The company has hired architects to draw plans for the new facility and has begun to work with the land owner and the City of Salem to expedite the development and permitting processes. 7 2. A -If a corporation,please list the names and addresses of the officers and directors of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation: The following are officers and directors and owners of the company: David M. Abbott, Chairman 72 Central Street Andover, MA 01810 Anthony A. Klein, President 35 Lexington Circle Swampscott, MA 01907 John J. Kellogg, Treasurer 27 Ledge Rock Road Concord, MA 01742 3. Please provide the name, address, phone number and contact person for any organization which may own or control the applicant organization, or who are affiliated with the applicant business organization. Not applicable. 4. Certificate of Good Standing-Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a copy of a Certificate of Good Standing Please see Attachment 1 of this application. We filed our request for a Certificate of Good Standing with the Department of Revenue on February 23, 1995. 8 RESOLUTION APPROVING CERTIFIED PROJECT APPLICATION OF Thermal Circuits, Inc. WHEREAS, Thermal Circuits, Inc. has applied for designation as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter 23A of Massachusetts General laws; WHEREAS, Thermal Circuits, Inc. meets the minimum standards of the Economic Development Incentive Program and the local economic development goals and criteria established as part of the documents creating the Beverly& Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the proposed certified project is located at 58 Swampscott Road,tax parcel# 763. The legal description of this are is as follows and is within the boundaries of the Salem Economic Opportunity Area: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95)feet, NORTHEASTERLY thirty(30)feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty(350)feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY,by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43)feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. WHEREAS the City of Salem has agreed to offer Thermal Circuits, Inc. a Tax Increment Financing Agreement; WHEREAS,Thermal Circuits,Inc. will invest approximately $975,000 to construct a new manufacturing facility and will retain 81 jobs and create approximately 40 new permanent, full-time jobs for residents of the Beverly & Salem Regional Economic Target Area, and the City within three years. NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Thermal Circuits, Inc., and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this day of �CQi1C� 199 ,by the Salem City Council. Date Neil J. HatHat i ton,MM or Attest: Deborah E. Burkinshaw, City Clerk SEAL ' Commonwealth of Massachusetts Department of Revenue Taxpayer service . Certificate Unit: 215 First Street Cambridge,MA 02142 March 13, 1995 - THERMAL CIRCUITS, INC. 4 JEFFERSON AVENUE SALEM, ivIA 01970 CERTIFICATE OF GOOD STANDING It is hereby certified by the Commissioner of Revenue of the Commonwealth of Massachusetts as of the above date, that the above named corporation is a domestic corporation organized in Massachusetts on October 5, 1961 and that said corporation is in good standing with respect to any and all returns due and taxes payable to the Commonwealth under General Laws, Chapter 62C, and the statutes referred to in Section 2 thereof. This certificate does not certify the corporation's standing as to unemployment insurance taxes under G.L.Ch. 151 a or taxes under any other provisions or law. No. 23352 B Deputy Chief, Taxpayer Assistance Bureau THIS IS NOT A WAIVER OF LIEN ISSUED UNDER GENERAL LAWS, CHAPTER 62C, SECTION 52, AND CANNOT BE USED FOR SUCH PURPOSE. 5349 - 32976 Mitchell Adams Mark McQuillan Commissioner Deputy Commissioner City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 I. LOCATION A. Economic Opportunity Area: Salem EOA B. Municipality: City of Salem C: Tax Increment Financing (TIF) Zone: Attached are: general location map, parcel by parcel map, property lines, all thoroughfares public rights of way and easements, land use and zoning map,and the location of proposed private project. Common description of TIF Zone: The proposed Thermal Circuits TIF Zone is located off of 58 Swampscott Road in the Salem EOA. The tax parcel is#763. The legal description of this TIF Zone is: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts,bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty (350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. 1 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. D. Narrative Description of TIF Zone --Needs . Problems and Opportunities: Designation of this TIF Zone meets the needs of, solves problems for and creates opportunities for both Thermal Circuits and the City of Salem. • Meeting the needs of Thermal Circuits: A rapidly growing manufacturer of heaters and heater assemblies, Thermal Circuits can no longer continue to operate in its antiquated,three-story, 20,000 s.f. manufacturing facility at 4 Jefferson Avenue in Salem. To meet customers' orders and continue to grow,the company must expand into a modem, one-floor, 26,0000 s.f. facility with room for further expansion. The tax benefits offered through the Commonwealth's Economic Development Incentive Program and this TIF plan will enable the company to invest in a state-of-the-art facility. • Meeting the needs of the City of Salem: To improve its ability to retain and attract new business, the City of Salem must gain a competitive advantage over other communities with better highway access and more land available for development. The ability to offer tax increment financing, beginning with this proposal,will help Salem to retain existing industry and attract new companies to the City. • Solving problems for the City and Thermal Circuits: Approval of this TIF Zone and TIF Plan will enable Thermal Circuits to construct a new facility in Salem, solving the operational problems that stem from the company's cramped, antiquated plant. Approval of this project solves a problem for the City as well. Without designation as a TIF Zone,the land that makes up the TIF will not be developed through ordinary market forces. Public 2 Cit of Salem Tax Increment Financing Plan for Thermal Circuits Inc. Y g , March 10, 1995 investment and creative economic development tools are necessary to promote the development of one of the few remaining industrially zoned, environmentally clean areas of the City of Salem. • Creating opportunityfor Thermal Circuits: Once in its new facility, Thermal Circuits will be able to continue its record of impressive growth. GROWTH OF THERMAL CIRCUITS: 1992 TO 1998 Year Sales Total Employment 1992 $3.63 m 57 1993 $4.20 m 63 1994 $4.45 m 72 1995J$7.48 5.13 m (estimated) 85 (estimated) 19965.75 m (estimated) 95 (estimated) 19976.50 m (estimated) 107 (estimated) 1998 m (estimated) 1 120 (estimated) • Creating opportunityfor the City of Salem: Designation of this TIF Zone and approval of this TIF plan will keep Thermal Circuits in Salem, retaining jobs, creating new jobs, expanding the City's tax base and making the City a more competitive location for business. All of these benefits are described in more detail in SECTION III: TIF ZONE & ECONOMIC DEVELOPMENT. • Creating opportunityfor the City of Salem outside of this TIF Zone: Development of a new Thermal Circuits plant within this TIF Zone will serve as a catalyst for future development on the land surrounding the new facility. The Thermal Circuits TIF Zone is one of six vacant industrial . parcels available at what will become a 29-acre industrial park. The City, using a state grant and Federal funds, will construct a road and infrastructure to serve all of these industrial parcels. This road construction and the tax incentives available through the Economic Development Incentive Program will keep Thermal Circuits in Salem, enable the development of the remaining five parcels and the creation of a small industrial park, generate jobs for area residents and expand the City's 3 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 tax base significantly. E. Property owners within the proposed TIF Zone: The property owner within the TIF Zone is Thermal Circuits, Inc. IL TIME The TIF Plan and TIF Zone described here will be in effect for a period of 10 years. III. TIF ZONE & ECONOMIC DEVELOPMENT A & B Economic Opportunities and Economic Benefits to the Community: Approving the proposed TIF Zone will create the following economic opportunities and benefits: 1. It will enable Thermal Circuits, a rapidly growing manufacturer of heaters and heater assemblies,to remain in Salem and develop a 26,000 s.f. manufacturing facility. 2. Retains 81 jobs in Salem. 3. Generates jobs: Thermal Circuits expect to hire at least 15 new employees in the Spring of 1995 and more 40 to 60 employees during the next three years. 4. Increases property tax revenue in the short term: During the time that Thermal Circuits' TIF Plan is in effect,property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of Assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. 5. Increases property tax revenue in the long term: After Thermal Circuits' TIF Plan expires, the tax impact of development will be $76,456 per year. 6. Generates interest in Salem as a competitive location for business. If successfully approved, Salem's first TIF plan will demonstrate that the City can offer economic development tools to retain business. Success here will invite the interest of firms located outside of the City. 4 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 C: PROPOSED AND POTENTIAL LAND USES Thermal Circuits will construct a 26,000 s.f. manufacturing and office facility within the proposed TIF Zone. D. ZONING IN THE TIF ZONE The TIF Zone is currently zoned for business park development. E. No part of the proposed TIF Zone is a hazardous waste disposal site. IV. TIF ZONE PROJECTS A. Planned Private Project: Thermal Circuits will develop a 26,000 s.f. manufacturing and office facility in the proposed TIF Zone. Budget for Project: ITEM COST Land acquisition $ 50,000 Grading $ 50,000 Paving $ 45,260 Utilities $ 60,000 Parking lot lights $ 8,000 Contingency (less real estate) 10% $ 17,600 Engineering (less real estate) 4% $ 7,000 Supervision $ 10,000 New building construction $975,000 Total $1,222,860 Relevant business plans: Time schedule for development: Construction will be completed and the company will occupy its new facility on September 1, 1995. Expected increases in job creation: The company will add 15 new jobs in the Spring of 1995 and expects to add 40 to 60 new jobs over the next three years. Given the company's recent strong growth, these are conservative estimates of job creation, according to company officials. 5 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 Estimates of tax revenue: During the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. After Thermal Circuits' TIF Plan expires, the tax impact of development will be $76,456 per year. B. Planned Public Projects: The City of Salem will direct a Community Development Action Grant of$260,000 to construct a road and infrastructure from the existing Swamspcott Road to the TIF Zone (the site of Thermal Circuits' new plant.) This road will serve three of the six development parcels that make up the industrial park under development off of Swampscott Road. The City will use CDBG funds to enable the completion of a road to serve the remaining three parcels. This infrastructure development will create a small industrial park. Budget. The road is 1,500 linear feet and can be constructed for $384 per linear foot. BUDGET FOR CONSTRUCTION OF ROAD AND INFRASTRUCTURE Line Item Antou Clearance & Demolition $141,272 Street& Site Improvements $137,005 Water& Sewer Facilities $109,700 Professional Fees (3%) $ 8,867 Cost Subtotal $516,784 Contingencies (10%) $ 51,679 Total Project Cost $568,463 6 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 V. FINANCING FOR TIF ZONE PROJECTS A. Anticipated Financing for Thermal Circuits Plant: Source: Amount: City of Salem Loan $ 50,000 (for land acquisition) Fafard Real Estate Land subsidy $ 210,000 (for land acquisition) Bank Financing $ 962,860 Total $1,222,860 B. Anticipated Financing for Construction of Road and Infrastructure: Source: unt: Community Development Action Grant $268,553 (for construction of road and infrastructure of 700 linear feet) Community Development $299,910 (for construction of road and Block Grant infrastructure of 800 linear feet) C: Detailed Projection of Costs of Public Construction: The road is 1,500 linear feet and can be constructed for$384 per linear foot. BUDGET FOR CONSTRUCTION OF ROAD AND INFRASTRUCTURE Line Item Amount Clearance& Demolition $141,272 Street& Site Improvements $137,005 Water& Sewer Facilities $109,700 Professional Fees(3%) $ 8,867 Cost Subtotal $516,784 Contingencies (10%) $ 51,679 Total Project Cost $568,463 7 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 D. Will betterments be used to finance any public-private projects now or within the proposed life of the TIF Plan? Yes. The portion of the new road and infrastructure paid for with CDBG funds will be repaid to the City over time as the landowner, Fafard Real Estate, sells the remaining parcels served by that road. E. If Betterments or Special Assessments are a part of the TIF Plan: 1. Schedule for defrayal of construction costs: Costs will be defrayed as the land owner sells the remaining five lots for development. 2. Agreement of all participating parties in the betterment: Please see the attached Memorandum of Understanding signed by representatives of the City of Salem, Thermal Circuits and Fafard Real Estate. F. Describe how private projects will be financed: Anticipated Financing for Thermal Circuits Plant: Source: Amount: City of Salem Loan $ 50,000 (for land acquisition) Fafard Real Estate Land subsidy $ 210,000 (for land acquisition) Bank Financing $ 962,860 Total $1,222,860 Thermal Circuits is weighing financing proposals from several banks. VI. TAX INCREMENT FINANCING A. Authorization to use TIF: The attached City Council resolution authorizes the City of Salem to use TIF in the Salem EOA. Also attached is a City Council resolution approving this TIF Plan for Thermal Circuits. B. Amount of proposed tax increment exemptions from property taxes and applicable crite 'a: As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $231,621 over 10 years. Also, see the description of the proposed TIF Plan in part D of this section. C. Maximum percentage of public project costs that can be recovered through betterments or special assessments in lieu of the incremental real estate taxes: About 53 percent of the cost to develop a 1,500 foot road($299,910 of the 8 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 $568,463 project cost) will be repaid through betterment fees assessed on the landowner as the five remaining development parcels are sold. D. TIF exemption from property taxes: 1. The term of exemption is 10 years. 2. Calculation of exemption: The base valuation of the land that makes up the proposed TIF Zone is now approximately $1,300. Construction of the new plant will lead to a new valuation of approximately $38,479. The increment,therefore, is $37,179. The exemption package works as follows: YEAR THERMAL CIRCUITS PAYS 1 Only the base tax bill of$1,300.' 2 Only the base tax bill of$1,300 3 12.5%of the increment,plus base tax bill. 4 25.0% of the increment, plus base tax bill. 5 37.5 %of the increment,plus base tax bill. 6 50.0%of the increment, plus base tax bill. 7 62.5% of the increment,plus base tax bill 8 75.0%of the increment,plus base tax bill. 9 87.5% of the increment,plus base tax bill. 10 100% of the increment,plus base tax bill. As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $231,621 over 10 years. NOTE: In years one and two, Thermal Circuits will continue to operate its existing facility at 4 Jefferson Avenue,paying property taxes of $12,212.90 per year. Also note that during the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of Assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. 3. The effective date of increment exemption is July 1, 1995 or upon approval by the Economic Assistance Coordinating Council, whichever is later. 9 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 VII. APPROVAL OF TIF PROJECTS TIF projects are approved by the Salem City Council. The Mayor and his staff are responsible for negotiating TIF Plans and, after Council approval, executing those plans. Evidence of local approvals of the proposed TIF Zone and TIF Plan are provided herein the form of a resolution passed by the Salem City Council on Thursday, March 9, 1995. 10 THERMAL CIRCUITS 9-YEAR TAX INCREMENT FINANCING PLAN Value now - $47,000This is the value of the property in its current, undeveloped state. Base tax bill $1,551 - Value after plant built $1,400,000 Increment in value $1,353,000 - TIF is applied to the increment. - Year 1 Year 2 Year 3 Year 4 Year 5 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Thermal Pays $1,551 - Thermal Pays $1,551 Tax on increment $5,581 Tax on increment $11,162 Tax on increment $16,743 Thermal Saves $44,649 Thermal Saves $44,649 Thermal Pays $7,132 Thermal Pays $12,713 Thermal Pays $18,294 Thermal Saves $39,068 Thermal Saves $33,487 Thermal Saves $27,906 Thermal pays base tax bill. Thermal pays base tax bill. Thermal pays taxes on 12.5%of Thermal pays taxes on 25%of Thermal pays taxes on 37.5%o increment plus base tax bill. increment plus base tax bill. increment plus base tax bill. Year 6 Year 7 Year 8 Year 9 Year 10 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 - Thermal Pays $46,200 Tax on increment $22,325 Tax on increment $27,906 Tax on increment $33,487 Tax on increment $39,068 Thermal Saves $0 Thermal Pays $23,876 Thermal Pays $29,457 Thermal Pays $35,038 Thermal Pays $40,619 Thermal Saves $22,325 Thermal Saves $16,743 Thermal Saves $11,162 Thermal Saves $5,581 Thermal pays taxes on 50%of Thermal pays taxes on 62.5%of Thermal pays taxes on 75%of Thermal pays taxes on 87.5%of Thermal pays full tax bill. increment plus the base tax bill. increment plus the base tax bill. increment plus the base tax bill. increment plus the base tax bill. Total property tax exemptions over nine years $245,570 Total property taxes paid over nine years $146,355 RESOLUTION AUTHORIZING THE USE OF TAX INCREMENT FINANCING.IN THE SALEM ECONOMIC OPPORTUNITY AREA .1 WHEREAS. the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS. there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; ] NOW THEREFORE BE IT RESOLVED by the City Council of the City of Salem that: (1) Tax Increri ent Financing may be used as a tool to encourage economic development within the Salem Economic Opportunity Area. (2) The Mayor is hereby authorized to execute and implement Tax Increment Financing agreements. JAdopted this Q day of ` iLGG��C 19by the Salem City Council at a regular City Council meeting with a quorum present. Neil J. Harrington, Mayor Date ATTEST: `Deborah E. Burkinshaw, City Clerk SEAL RESOLUTION AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT FOR THERMAL CIRCUITS, INC. WHEREAS, the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to encourage business expansion and relocation to the City of Salem; WHEREAS, there is strong support for using Tax Increment Financing to encourage the development of a manufacturing facility for Thermal Circuits, Inc. off Swampscott Road in the Salem Economic Opportunity Area. NOW THEREFORE BE IT RESOLVED by the Salem City Council that: (1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City.Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made part of this Resolution. (2) The area to be designated as a Tax Increment Financing Zone is: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty (350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. (3) A map of the Tax Increment Financing Zone is hereby attached as Exhibit B and made a part of this Ordinance. (4) The Tax Increment Financing Agreement shall be binding on all subsequent owners of the property in the Tax Increment Financing Zone. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement, as specified in the Tax Increment Financing Agreement. (5) A copy of the adopted Tax Increment Financing Agreement shall be forwarded to the Massachusetts Economic Assistance Coordinating Council for its approval. (6) The effective date of the Tax Increment Financing Agreement shall be July 1, 1995 or the date which the Tax Increment Financing Agreement is approved by the Massachusetts Economic Assistance Coordinating Council, whichever is later. (7) The Mayor is hereby authorized to execute and implement the Tax Increment Financing Agreement. Adopted this day of 19 by the Salem City Council at a regular City Council meeting with a quorum present. Neil J. Harrington, Mayor Date r ATTEST: Deborah E. Burkinshaw, City Clerk SEAL EXHIBIT A: Tax Increment Financing Agreement EXHIBIT B: Map of Tax Increment Financing Zone TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS and THERMAL CIRCUITS, INC. This agreement is made the 30th day of March, 1995,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,Neil J. Harrington, (hereinafter called "the CITY"), and THERMAL CIRCUITS, INC., a Massachusetts corporation with a principal place of business at 4 Jefferson Avenue, Salem, Massachusetts, 01970 and KAK Realty Trust(hereinafter collectively called "the COMPANY") . This Agreement will take effect as of July 1, 1995 (Fiscal Year 1996). WHEREAS, the COMPANY wishes to locate a manufacturing facility off of 58 Swampscott Road in Salem; and WHEREAS,the CITY is willing to grant tax concessions in return for guarantee of construction of a new manufacturing facility and employment opportunities for local workers; and WHEREAS,the Salem City Council resolved on March 9, 1995 to allow the use of Tax Increment Financing as a tool to encourage economic development within the Salem Economic Opportunity Area; and WHEREAS,the Salem City Council resolved on March 9, 1995 to endorse the Tax Increment Financing Plan negotiated by the CITY and the COMPANY. NOW, THEREFORE, in consideration of the mutual promises contained herein,the parties do mutually agree as follows: A. THE COMPANY'S OBLIGATIONS 1. The COMPANY shall locate a manufacturing facility on a certain parcel of land off of 58 Swampscott Road in Salem. "The FACILITY" as used herein means a building to be constructed containing approximately 31,000 square feet plus site improvements;that is, improvements to the unimproved parcel of land as of the date of this agreement. 2. During the life of this agreement, if the COMPANY decides to sell the FACILITY or the business or to otherwise transfer control of the FACILITY or business and/or operations thereof, the COMPANY shall give the CITY at least three months 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 1. The CITY shall grant a tax increment financing exemption to the COMPANY in accordance with Massachusetts General Laws, Chapter A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the construction of the FACILITY. Said exemption shall be valid for a period often (10) years,beginning with fiscal year 1996 (July 1, 1995) and ending with fiscal year 2006. During each year of this agreement,the company will pay taxes based on the current value of the unimproved land as of the date of this agreement(the base tax bill) and on that portion of the value of the FACILITY which is not exempted under the agreement. The exemption schedule on the value of the FACILITY works as follows: For the first two (2)years, the COMPANY will pay only the base tax bill and will be granted an exemption of 100 percent of the full value of the FACILITY. In year three,the COMPANY will pay taxes on 12.5%of the full value of the FACILITY, plus the base tax bill. In year four,the COMPANY will pay taxes on 25% of the full value of the FACILITY,plus the base tax bill. In year five,the COMPANY will pay taxes on 37.5% of the full value of the FACILITY,plus the base tax bill. In year six,the COMPANY will pay taxes on 50% of the full value of the FACILITY,plus the base tax bill. In year seven, the COMPANY will pay taxes on 62.5% of the full value of the FACILITY,plus the base tax bill. In year eight,the COMPANY will pay taxes on 75%of the full value of the FACILITY,plus the base tax bill. In year nine,the COMPANY will pay taxes on 87.5%of the full value of the FACILITY,plus the base tax bill. In year ten,the COMPANY will pay taxes on the full value of the FACILITY. C. OTHER CONSIDERATIONS 1. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2. If the COMPANY decides to expand the facility 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 value of the expansion from property taxes. The exact amount of that exemption will be determined at the time of expansion. Executed as a sealed instrument on the day and year first above written. CITY OF SALEM THERMAL CIRCUITS, INC. Neil J. Hpdfingion, Mir Anth y , President otary Public My commission expires I , A , N/F HUTCHINSON CONNICK / /F BARNS ROAD TRUST YIMGWF EMI c WFWS. TENNIS AND SQUASH REALTY CLUB e r . RESOLUTION AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT FOR THERMAL CIRCUITS, INC. WHEREAS, the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to encourage business expansion and relocation to the City of Salem; WHEREAS, there is strong support for using Tax Increment Financing to encourage the development of a manufacturing facility for Thermal Circuits, Inc. off Swampscott Road in the Salem Economic Opportunity Area. NOW THEREFORE BE IT RESOLVED by the Salem City Council that: (1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made part of this Resolution. (2) The area to be designated as a Tax Increment Financing Zone is: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty (350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four. and 30/100 (1034.30) feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. (3) A map of the Tax Increment Financing Zone is hereby attached as Exhibit B and made a part of this Ordinance. (4) The Tax Increment Financing Agreement shall be binding on all subsequent owners of the property in the Tax Increment Financing Zone. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement, as specified in the Tax Increment Financing Agreement. (5) A copy of the adopted Tax Increment Financing Agreement shall be forwarded to the Massachusetts Economic Assistance Coordinating Council for its approval. (6) The effective date of the Tax Increment Financing Agreement shall be July 1, 1995 or the date which the Tax Increment Financing Agreement is approved by the Massachusetts Economic Assistance Coordinating Council, whichever is later. (7) The Mayor is hereby authorized to execute and implement the Tax Increment Financing Agreement. J Adopted this day of f/�CzO�� 19 �by the Salem City Council at a regular City Council meeting with a quorum present. C / Neil J. Harrington, May6r Date ATTEST: Deborah E. Burkinshaw, City Clerk SEAL EXHIBIT A: Tax Increment Financing Agreement EXHIBIT B: Map of Tax Increment Financing Zone 04/18/98 15:14 '09787413420 THERMAL CIRCUITS - R092/004 • I AMENDMENT TO TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM AND THERMAL CIRCUITS, INC. DATED MARCH 30, 1995 AGREEMENT made this 13th day of March , 1997 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, Neil J. Harrington. (hereinafter the 'City") and Thermal Circuits, Inc. a Massachusetts corporation with a principal place of business at One Technology Way, Salem, Massachusetts 01970 and John H. Kellogg, Trustee of KAK Realty Trust, under declaration of trust dated October 27, 1995 and filed in the Registered Land Division of the Essex South District Registry of Deeds as Document No. 313348 (hereinafter collectively called the 'Company") . WHEREAS, the City and the Company entered into a Tax Increment Financing Agreement dated March 30, 1995 (hereinafter the "Agreement") ; and WHEREAS, the parties entered into the Agreement in anticipation of the acquisition by the Company of a certain parcel of land located off of 58 Swampscott Road in Salem consisting of approximately 4.08 acres (hereinafter the "Property") and the construction thereon of a manufacturing facility (hereinafter the 'Facility') , said acquisition and construction to be substantially completed within the then current fiscal tax year, Fiscal Year 1995; and WHEREAS, beeatse it was the intent of the parties that the Agreement be effective with the onset on the next fiscal year immediately following the Company's acquisition of the property and construction of the Facility, the effective date of the Agreement was July 1, 1995; and WHEREAS, effective June 30, 1995 at the close of Fiscal Year 1995, the Company did not yet own the Property and had not yet constructed the Facility thereon; and WHEREAS, the Corporation acquired ownership of the Property by deed dated October 27, 1995, filed with the Registered Land Division of the Essex South District Registry of Deeds as Document No. 313349 and thereafter constructed the Facility, receiving a Certificate of Occupancy therefor in or about March, 1996. 1 04/18/98 15:14 %29787413420 THERMAL CIRCUITS 0003/004 r NOW THEREFORE, in consideration of the mutual promises contained herein, the parties do mutually agree to amend the Agreement as follows: 1. The effective date of the Agreement shall be July 1, 1996 (Fiscal Year 1997) ; 2. Following reference to "a certain parcel of land off of 58 Swampscott Road in Salem" in paragraph A.I. insert consisting of 4.08 acres and shown as Lot 722 on a plan entitled 'Subdivision of Lot 698, Land Court Case No. 11802" dated March 24, 1995 and filed with the Land Court Engineering Department on October 24. 1995 as Plan No. 11802-54. 3. Paragraph B.1. , Line 5 the dates shall be changed to read as follows: beginning with fiscal year 1997 (July 1, 1996) and ending with fiscal year 2007. 4. This Agreement, in all other respects, is hereby ratified and affirmed. Executed as a sealed instrument on the day and year first written above. CITY of SALEM THERMAL CIRCUITS By: l � By. Neil J Harrin on, An ny Klein, Mayor a id t Duly Authorized KAK REALTY TRUST 1 ohn H. Ke ogg, tee in,City Council February 27, 1997 Adopted by a unanimous roll call vote of 11 yeas, 0 nays, and 0 absent A motion for immediate reconsideration in the hopes it would not prevail was denied. Approved by the Mayor on March 3 2 1997 i i ATTEST: oecl 7AB'Ti CITY CLERK 04/16/98 15:15 ' 9787413420 THERHAL CIRCUITS Z004/004 a� COMMONWEALTH OF MASSACHUSETTS ESSEX, ss. i ;f , 1997 Then personally appeared Neil J. Harrington as Maycr of the City of Salem and acknowledged the foregoing to be his true act and deed, before me. ((--�� �_•,, v tary Public My Commission Expires: COMMONWEALTH OF MASSACHUSETTS ESSEX, ss. k4AtP I � , 1997 Then personally appeared Anthony A. Klein, President of Thermal circuits, Inc. and acknowledged the foregoing to be his true act and deed, before me. P b1TO -� Notaryy My Commission Expires: /-/(,{Qg COMMONWEALTH OF MASSACHUSETTS ESSEX, ss. pAa,,�n�r t 1 � , 1997 . Then personally appeared John H. Kellogg, Trustee of KAK Realty Trust and acknowledged the foregoing to be his true act and deed, before no. Notary Public q o My Commission Expires:[-{6 aomacie\[netaolClceultaNendmea[ 3 I CITY OF SALEM, MASSACHUSETTS PLANNING DEPARTMENT 00 . WILLIAM E. LUSTER ONE SALEM GREEN City Planner - 01970 (508) 745-9595, EXT. 311 FAX (508) 744-5918 TO: Tony Klein FROM: Bill Luster RE: Estimates of Tax Exemptions Available to Thermal Circuits DATE: January 31, 1995 As you requested, we have prepared preliminary estimates of the state investment tax credits and local property tax exemptions available to Thermal Circuits through the Economic Target Area program. Salem's ETA designation allows qualified companies to enjoy tax benefits not available in other areas of Massachusetts. As an expanding business to be located within a Salem Economic Opportunity Area (the developing industrial park at Swampscott Road), Thermal Circuits will qualify for investment tax credits and property tax exemptions. Please note that these calculations are estimates. The Tax Increment Financing plan described here is a proposed plan that has not yet been approved by the Salem City Council. INVESTMENT TAX CREDIT Definition: Investment tax credits of five percent may be applied toward corporate excise or personal income tax. (The Commonwealth's investment tax exemption for businesses not located within an Economic Opportunity Area is just three percent. ) The investment tax credit may be applied to virtually any type of investment, including improvements to or construction of a new facility and the purchase of capital equipment. This tax credits has a 10-year carry-forward provision -- if income doesn't exceed investment, the tax credit may be applied to several years of income, abating tax liability over time. . 1 .i Calculation: The value of this tax credit is easily calculated -- simply total the investments in plant construction and equipment. Five percent of that investment can be deducted from the company's corporate income tax bill. The investment tax credit is more valuable to Thermal Circuits in Salem for two reason: first, it is more generous than elsewhere; second, the construction of a new plant in Salem qualifies as an "exemptible" expense, while the purchase of a plant elsewhere does not. If Thermal Circuits builds a $975,000 plant in Salem and invests in $100,000 in new equipment, it qualifies for a $53,750 tax credit. If Thermal Circuits buys a new plant elsewhere and invests $100,000 in equipment, it receives only a $3,000 tax credit. (Please see the attached spreadsheet for an illustration.) Ovalue to Thermal Circuits: $50,750 TAX INCREMENT FINANCING (TIF) Definition: Through a TIF plan, a municipality can exempt a part of the new value (the increment) of a development project from real estate taxes. Any project granted such an exemption will continue to pay taxes on the value of the project area prior to new development. Calculation: 1. Determine current property tax bill for parcel. The Salem Board of Assessors estimates the property tax bill for the four-acre parcel (targeted for Thermal Circuits) to be $1,300. 2. Determine what tax bill would be after parcel is developed. This is est' ated at $74,260. 3. Calculate the incremen between old and new tax bills. The increment is $7 60. ,�� 2 4. Tax increment financing works by exempting the business from part of the "increment" between the old and new tax bills. According to our preliminary plans for TIF, Thermal Circuits would pay 10% of the increment in the first year, 20% in the second, 40% in the third, 60% in the fourth, 80% of the increment in the fifth year. In year 6, the City of Salem will collect the entire $74,260 tax bill. Please see attached spreadsheets for calculations of tax credits. Value to Thermal Circuits: $211,584 over five years. If you have any questions about these estimates, please call me or Michelle Cammarata at 745-9595, ext. 311. 3 PROPERTY TAX BENEFITS AVAILABLE THROUGH TAX INCREMENT FINANCING Current tax bill(base) $1,300 This is for the four-acre parcel which Thermal Circuits will develop. s Tax bill after plant built $74,260 Increment $72,960 TIF is applied to the increment. Years Year Year Year Year Year Total Tax Bill $74,260 Total Tax Bill $74,260 Total Tax Bill $74,260 Total Tax Bill $74,260 Total Tax Bill $74,260 Total Tax Bill $74,260 Increment $72,960 Increment $72,960 Increment $72,960 Increment $72,960 Increment $72,960 Increment $72,690 Thermal Pays $8,596 Thermal Pays $15,892 Thermal Pays $30,484 Thermal Pays $45,076 Thermal Pays $59,668 Thermal Pays $74,260 Thermal Saves $65,664 Thermal Saves $58,368 Thermal Saves $43,776 Thermal Saves $29,184 Thermal Saves $14,592 Thermal Saves $0 Thermal pays 10%of increment Thermal pays 20%of increment Thermal pays 40%of increment Thermal Pays 60%of increment Thermal pays 80%of increment Thermal Pays entire tax bill. plus the base tax bill. plus the base tax bill. plus the base tax bill. plus the base tax bill. plus the base tax bill. Total property tax exemptions over five years $211,584 Net present value of benefits at 10%discount rate $207,458 _ INVESTMENT TAX CREDITS Locating at Swampscott Road,Salem entitles Thermal Circuits to a 5%investment tax credit Plant $975,000 (26,000 s.f.at$37.50 per s.f.) New Equipment $100,000 Total expenses $1,075,000 Exemptible expenses $1,075,000 Tax credit $53,750 Outside of Salem,Thermal Circuits gets a 3%investment tax credit. Plant $800,000 (Purchase of plant would not qualify for tax credit. Improvements to plant qualify.) New Equipment $100,000 Total expenses $900,000 Exemptible expenses $100,000 Tax credit $3,000 R 1' February 24, 1997 To the Salem City Council Salem City Hall Salem, MA 01970 Ladies & Gentlemen of the Council: Enclosed for your consideration is a proposed amendment to the Tax Increment Financing (TIF) Agreement made between Thermal Circuits and the City in March 1995. The TIF was made in anticipation of Thermal relocating its manufacturing facility to the new industrial subdivision off of Swampscott Road by the summer of 1995. The amendment proposed simply delays the start date of the TIF by one year to coincide with the building completion date and issuance of the Certificate of Occupancy, which occurred almost a full year later than originally planned. I have consulted with Craig Wheeler and Peter Caron and have been assured that the amendment is consistent with the original intent of the City. In its current form the agreement works to impose a tax on Thermal for the entire subdivision rather than just its facility. This unexpected result was certainly not intended and would create a substantial hardship for Thermal. I fully support the amendment which will correct this apparent clerical error and restore the intent of the parties in making the original agreement. Sincerely, Neil J. Harrington MAYOR uZ,1Z4/_!7 i11L 1)N:57 F.A.1 51)13 741 4883 SERAFINI&DARLING .. PLANNING X002 AMENDMENT TO TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM AND THERMAL CIRCUITS, INC. DATED MARCH 30, 1995 AGREEMENT made this day of 1997 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, Neil J. Harrington (hereinafter the "City") and Thermal Circuits, Inc. a Massachusetts corporation with a principal place of business at One Technology Way, Salem, Massachusetts 01970 and John H. Kellogg, Trustee of KAK Realty Trust, under declaration of trust dated October 27, 1995 and filed in the Registered Land Division of the Essex South District Registry of Deeds as Document No. 313348 (hereinafter collectively called the "Company") . WHEREAS, the City and the Company entered into a Tax Increment Financing Agreement dated March 30, 1995 (hereinafter the "Agreement') ; and WHEREAS, the parties entered into the Agreement in anticipation of the acquisition by the Company of a certain parcel of land located off of 58 Swampscott Road in Salem consisting of approximately 4.08 acres (hereinafter the "Property") and the construction thereon of a manufacturing facility (hereinafter the "Facility') , said acquisition and construction to be substantially completed within the then current fiscal tax year, Fiscal Year 1995; and WHEREAS, because it was the intent of the parties that the Agreement be effective with the onset on the next fiscal year immediately following the Company's acquisition of the property and construction of the Facility, the effective date of the Agreement was July 1, 1995; and WHEREAS, effective June 30, 1995 at the close of Fiscal Year 1995, the Company did not yet own the Property and had not yet constructed the Facility thereon; and WHEREAS, the Corporation acquired ownership of the Property by deed dated October 27, 1995, filed with the Registered Land Division of the Essex South District Registry of Deeds as Document No. 313349 and thereafter constructed the Facility, receiving a Certificate of Occupancy therefor in or about March, 1996. 1 OB:56 hAA 508 741 4683 SERAFINI&DARLING .� — PLANNING Z003 NOW THEREFORE, in consideration of the mutual promises contained herein, the parties do mutually agree to amend the Agreement as follows: 1. The effective date of the Agreement shall be July 1, 1996 (Fiscal Year 1997) ; i 2. Following reference to "a certain parcel of land off of 58 Swampscott Road in Salem" in paragraph A.I. insert consisting of 4.08 acres and shown as Lot 722 on a plan entitled "Subdivision of Lot 698, Land Court Case No. 11802" dated March 24, 1995 and filed with the Land Court Engineering Department on October 24. 1995 as Plan No. 11802-54. 3. Paragraph B. 1. , Line 5 the dates shall be changed to read as follows: beginning with fiscal year 1997 (July 1, 1996) and ending with fiscal year 2007 . 4. This Agreement, in all other respects, is hereby ratified and affirmed. Executed as a sealed instrument on the day and year first written above. CITY OF SALEM THERMAL CIRCUITS By: BY; Neil J. Harr ngton, Anthony A. Klein, Mayor President Duly Authorized KAK REALTY TRUST By; John H. Kellogg, Trustee 2 • 0272Si87 TUE 08:58 FAX 508 741 4683 SERAFINI&DARLING PLANNING 004 COMMONWEALTH OF MASSACHUSETTS ESSEX, ss. 1997 Then personally appeared Neil J. Harrington as Mayor of the City of Salem and acknowledged the foregoing to be his true act and deed, before me. Notary Public My Commission Expires: COMMONWEALTH OF MASSACHUSETTS ESSEX, as. , 1997 Then personally appeared Anthony A. Klein, President of Thermal circuits, Inc. and acknowledged the foregoing to be his true act and deed, before me. Notary Public My Commission Expires: COMMONWEALTH OF MASSACHUSETTS ESSEX, ss. 1997 Then personally appeared John H. Kellogg, Trustee of KAY, Realty Trust and acknowledged the foregoing to be his true act and deed, before me. Notary Public My Commission Expires: anm rle\thern lCSrcult!Amendment 3 10/31/96 11:19 /297413420 THERMAL CIRCUITS (41001/001 THERMAL CIRCUITS FAX apeclalMng U the design,"bwaing,and production of surhes he4ters,hseter assemblies,end hdnred panel emm"s w m OATE: 3/" PHONE NO: FAX NO: 1.1p 0 s10 - TO: / ATM: 4 u / 4Yo FROM: SUBJECT: 99 S 7 o 7 vt eO S7,o7 MEET, Thermal Clrcults Inc. One Technology Way Technology park Seism, Messachueatta 01970-7000 Telephone 80"oa.HF1►'r(4328) Facsimile 508-741-3420 08/08/94 12:31 127413420 THERMAL CIRCUITS /001/003 a CIRCUITS specialising In the de9lgn.engineering,and production of surface haaWn.heater assemblies,and infrared panel emitters August 05, 1994 Fax# 1-508-744-5918 City Of Salem One Salem Green Salem, Ma 10970 Attn: Michelle Cammarata Economic Development Planner Dear Ms. Cammarata: Thank you for taking the time last Thursday to visit our company and discuss our relocation program. It is comforting to know that you and Mr. Luster will be giving Thermal Circuits' needs your highest priority in the weeks ahead. Based on your follow-up Fax, you understand the urgency and importance of moving ahead as expeditiously as possible. Sense our initial move from Beverly 25 years ago, our relationship with the city of Salem has been a good one. From the time we made the decision one year ago to relocate once again, we have not been shy at stating our desire to remain in Salem. However, as we have come to realize, there is a significant cost to remaining in Salem that has brought us to a very important point in the strategic process. As you will see below, there is a substantial difference in cost between building a new facility (our only option for Salem),and acquiring an existing one including upgrade and build-out expense. Unfortunately, Our cost problem compounds with the issue of what to do with our existing plant. We owe$265.000. The prospect of finding a buyer for anywhere near this amount is poor at best. As we advised, our 20 July meeting with Mr. Fafard went well. He appears genuinely interested in working with Thermal Circuits on this relocation project.We provide you his quotation to develop property on Swampscott Road and comparison to the cost of procuring an existing facility: ThernL3i cucuas inc..4 Jefferson Avenue,Salem,MA 01970-2976 Teleohone 600-808-ItEAT(4328)Fax 508-741-3420 08/08/94 12:32 157413420 THERMAL CIRCUITS Z002/003 1 City of Salem,pg 2 August 06.1994 Swampscott Road Land Acquisition and Site Work Its _Q9Ml Real Estate $65,0001 acre x 4 acres= 260,000 Grading 50,000 Paving 45,260 Utilities (W, S. & D) 58,350 Parking Lot Lights 8,000 Contingency(less real estate) 10% 17,600 Engineering ( ) 4% 7,000 Supervision 10,000 456,210 New Building Construction: $37.50/square foot x 30,000= 1,125,000 (not including tum-key electrical) Tum-key Electrical Build-Out 45,000 Grand Total 1,626,210 Comparison: Purchase of Existing Facility (Outside Salem, 32,000 sq. ft.)Est- 900,000 Upgrade 1 Build-Out 240,000 1,140,000 Premium to Build New Fadilty in Salem 3486.210 Thermal Circuits Inc.,4 JBRerson Avenue.Salem.MA 0197 0-2 97 6 Telepnona 800.806-HEAT(4328)Fax 508-741-3420 08/08/94 12:33 '$7413420 THERMAL CIRCUITS /&003/003 City of Salem, pg 3 August 5, 1994 It is vital that Thermal Circuits be in a modem, one story, 30,000 square foot facility with room for expansion, no later than July 01, 1995. In fact, all indications are we will be impeding our ability to meet new business opportunities as early as January. Concurrently, we are loosing business(estimated at$500,000 in the past two years), as a result of some customers' perception that we can not produce the volume or the quality level they require in our existing four story, tum-of-the-century mill building.Additionally, our operating costs are projected to be 11-13% lower in a one story facility. In this day of tremendous competition, it is crucial that we realize this saving and pass it on to our customers. customers who not only demand the highest of quality but also demand year over year price decreases. Our existing business plan calls for 15-18% growth each year for the next five years. This translates to approximately 9-12 new factory level jobs per year with additional overhead and administrative positions. Our New Technology Development effort has recently spawned three products capable of producing sales beyond forecast, including exports, which presently account for about 23% of our total business. Investment in new and updated capital equipment and process improvement is targeted at$150,000 over the next two years. At present, Thermal Circuits has 45 full time and 18 part time employees. Our average full 6me` employee earns$28,000 annually, with an average length of service of 14 years. Our employees participate regularly in training programs and have recently completed courses in A delta T and Cycle Time Management. This program was administered by its founder, Digital Equipment Corporation at their training and educational center in Maynard. We are presently 70%of the way to IS09001 certification, at a cost of$42,000. This is a strategic necessity if we are to compete in the global marketplace. We hope to be the first in our industry so registered. We also hold numerous internal process and supervisory training programs, geared towards promoting employee involvement in goal setting and problem solving. We appreciate your interest and involvement in this matter and applaud Mr. Luster's-Salem's recent efforts. If you should require information in addition to what we have provided herewith, please do not hesitate to ask. Yours very truly, THERMAL CIRCUITS INC., J y . Klein nt cc: William E. Luster David M- Abbot John R. Serafini Sr. John H. Kellogg Thermal Circuits Inc.,4.Ia8ersOn Avenue,Salem,MA 01970-2976 Telephpne aoo-909-HEAT(4328)Fair 509-741-3420 03/01/95 17:04 $7415420 THERMAL CIRCUITS 1&01/003 THERMAL HHU CIRCUITS specializing in the design,engineering,and production o1 surface heaters,heater assemblies,and Inhaled panel emitters 01 March, 1995 Fax# 744-5918 City Of Salem Planning Department Attn: Michelle Cammarata Economic Development Planner Dear Michelle: I have attempted to provide the information required to complete the project certification application. We have filed our request for a Certificate of Good Standing with the state on 23 February. We do not know how long it will take the state to respond. Part A:OK as is. Part B:2(b). 12 permanent full-time employees the first year, 9-12 per year thereafter. 2(c). Approximately 60 current employees will be assigned to the new plant. Approximately 12 new employees the first year will be hired and assigned to the new plant. Approximately 20 employees will remain at the existing plant. 2(11). OK as is, estimate 1 1/2 -2 miles between plants. 3. Thermal Circuits expects most(perhaps 80%) new hires will be from Salem. We plan to advertise only in the Salem paper. S. See separate sheet for Thermal Circuits' hiring policy. Presently, we believe that we employ 18 minorities out of 81 total current employees.iv�o 8(a)(b).Thermal Circuits is in its 3rd year of an original business plan. This plan has been revised (upward) on two occasions during this time. Forecasts have been met or exceeded each year. &M Ems ent 1992 $3.63m 57 1993 4.20 63 1994 4.45 72 1995 5.13 est 85 est 1996 5.75 est 95 est 1997 6.50 est 107 est 1998 7.48 est 120 est Thermal Circuits inc.,4Je}lerson Avenue,Salem,NIA 019702976 Telephono S00-008-HEAT(4328)Fan 508-741-3420 03/01/95 17:04 $7413420 THERMAL CIRCUITS [A 002/003 City cif Salem 01 March, 1995 Rg20f2 Part E: 1. Thermal Circuits is a Corporation; Federal ID#042282863 2.A. The following are officers and directors and owners of the company: David M. Abbot Chairman 72 Central St. Andover, MA 01810 Anthony A. Klein President 35 Lexington Cr. Swampscott, MA 01907 John H_ Kellogg Treasurer 27 Ledge Rock Rd. Concord, MA 01742 3. None. Financial projections and completed COAG Exhibit G should be in your hands tomorrow. Any questions please call! Yours very truly Thermal Circuits, Inc., A ony . Klein sldent 1 Thermal Circuits Inc.. 4 Jefferson Avenue,Salem,MA 0197 0-297 6 Telephone 600-808-HEAT(4328)Fax 509-741-3420 March 10, 1995 Salem Economic Opportunity Area SECTION 3 PROJECT CERTIFICATION Instructions: This application form should be completed by businesses seeking project certification. Businesses may be eligible for project certification if the business controls a facility which is located or which intends to locate or expand its operations in an EOA. The business must obtain municipal approval for the project prior to submitting the application form to the EACC. The application should be typed on 8 1/2 x 11 inch paper. The pages should be indexed and numbered. Please submit ten (10) copies of the completed application and ten (10) copies of all other required application materials to Karen S. Baptiste, Director of Economic Assistance, Massachusetts Office of Business Development, One Ashburton Place, Room 2101, Boston, MA 02108. PART A: APPLICATION INFORMATION 1. Name and address of business submitting application: Thermal Circuits, Inc. 4 Jefferson Avenue Salem, MA 01970 2. Name and address of project (if different from business): This project involves the construction of a new manufacturing facility for Thermal Circuits at 58 Swampscott Road in Salem. 3. Location of ETA: Beverly & Salem Regional ETA 4. Location of EOA: Salem EOA 5. Nature and Purpose of Project: Nature of Project: Thermal Circuits, a Salem manufacturer of heaters and heater assemblies, intends to purchase a four-acre development parcel and construct a new, 26,000 square foot manufacturing facility in the Salem Economic Opportunity Area in Salem. The building will be constructed to allow for future expansion. [According to the Salem Zoning Ordinance, the maximum allowable foot print (ground floor) is I 78,408 square feet. The maximum height is 50 feet. Thus, depending on the first floor height, three to four stories could be added. If four stories are constructed, the maximum allowable building size would be 313,632 square feet (4 floors, each 78,408 square feet).] The company will continue to operate its current facility at Jefferson Avenue for at least two years, possibly longer. Purpose of Project: For Thermal Circuits, the purpose of this project is to increase its manufacturing capability. The company must expand its operations to continue to serve its customers and grow. For the City, the purposes of this project are: to retain a growing manufacturer in the City; save 81 jobs and promote the opportunity to generate new jobs; expand the City's tax base and begin the development of an industrial park off of Swampscott Road. The industrial park— approximately 29 acres of undeveloped, industrially-zoned land— consists of six development parcels. Thermal Circuits will be the first company to locate in the park. Construction of a road and infrastructure to serve the entire area will accompany development of Thermal Circuits' new facility. This infrastructure development —to be paid for with federal Community Development Block Grant funds and with a Community Development Action Grant from the Executive Office of Communities and Development— will open the entire area for development. PART B: MANDATORY REQUIREMENTS 1. Is the proposed project an expansion of an existing business that is currently located in the EOA? Yes. Thermal Circuits currently operates a facility at 4 Jefferson Avenue in Salem. The company will construct a new plant at Swampscott Road in Salem but will continue to operate its Jefferson Avenue facility for at least two years after construction of the new plant 2. Is the proposed project a new facility to be located within an EOA after the date of this application? Yes. (a) Is this the applicant business'first facility in the Commonwealth? No. (b) How many new permanent full-time employees will be employed by the applicant business at the new facility? Approximately 12 new permanent, full-time employees will be hired in the first year and assigned to the new plant. Thereafter, approximately nine to 12 new employees per year will be hired and 2 assigned to the new facility. (c) (i) Will the project result in the replacement or relocation of any permanent,full- time employees who work in existing facilities located in the Commonwealth? If yes, where are the facilities located and how many permanent full-time employees will be replaced or relocated? When the new facility is complete, approximately 60 of Thermal Circuits' 81 current employees will be assigned to the new plant. Approximately 21 current employees will remain in the facility at 4 Jefferson Avenue in Salem. We anticipate that 12 new employees will be hired and assigned to the new facility in the first year. Thereafter, approximately nine to 12 new employees per year will be hired and assigned to the new facility. (4)Provide documentation demonstrating that you are not seeking project certification or relocation for any portion of the project that is attributable to the replacement or relocation of permanent full-time employees of an existing facility already located in the Commonwealth. This project allows for the continued growth of Thermal Circuits and is more than simply the relocation of employees from one facility to another. As the answer to question cl shows, some employees will be reassigned to the new facility. However, this project generates jobs as well. To meet current orders and obligations, Thermal Circuits must keep both plants in operation. In time, it will be more efficient to move all operations to the new, modern facility off of Swampscott Road. The new facility will be built to allow for expansion. We expect that in years to come, Thermal Circuits will expand the building size beyond 26,000 square feet. The reassignment of employees from the existing plant to our new facility will be smooth and convenient. The new facility is located just 1.5 miles from the Jefferson Avenue plant. Many of the employees who walk to work will continue to be able to do so. Those who rely on public transportation will also continue to be served. It is important to note that the City of Salem has agreed to fund a reuse study for the existing Jefferson Avenue facility. This study will examine redevelopment options for the site. Both the City of Salem and Thermal Circuits are committed to pursuing a productive reuse of the Jefferson Avenue facility when Thermal Circuits vacates the building. 3. Does the proposed project involve the renovation and reuse of an abandoned building? No. ` 3 4. Local Employment - How many residents of the ETA are expected to be employed in a new permanent full-time jobs at the project? What actions will you take to recruit employees from among residents of the ETA? Thermal Circuits expects that most (perhaps 80%) of its new hires will be from Salem. The company plans to advertise only in the Salem Evening News. 5. Affirmative Action - describe your affirmative action goals and recruitment techniques that will be used to fill the newly created jobs. See the attached sheet for Thermal Circuits' hiring policy. The company currently employs 18 minorities out of 81 total employees. 6. Agreement Between the Business and Area banks - If the business has entered into any agreement with area banking institutions relating to the business' intention to deposit funds in these banks and the banks' intentions to commit a portion of such deposits to fund loans to businesses in the EOA, pursuant to the Massachusetts Capital Access Program, established by M.G.L. c. 23A, Section 57, provide documentation of such agreement or agreements. No such agreement exists. 7. Economic Benefits of Project Certification - Provide a description of the benefits that are anticipated for the business and the project, if the project is certified. Benefits to Thermal Circuits: • The company will receive approximately $232,000 in local property tax benefits over 10 years. • The construction of a $975,000 plant will entitle the company to $48,750 in state investment tax credits. • The company will receive additional state investment tax credits as a result of investment in equipment. • Construction of a new facility will enable Thermal Circuits to increase sales by 46% by 1998. • The City of Salem has agreed to finance a study of the reuse of the Jefferson Avenue facility. This study will help the company to identify parties interested in redeveloping the building and enhance the company's ability to sell this real estate. 4 Benefits to the City of Salem: • This project retains 81 jobs in Salem and adds 40 more. • The City has agreed to a 10-year tax increment financing plan with Thermal Circuits. Nevertheless, this project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. • Thermal Circuits will maintain operations at its existing Jefferson Avenue facility for at least two years, continuing to generate revenue for the City. • After all local property tax abatements expire, this project will generate $76,456 per year in property tax revenues. • Thermal Circuits plans to maintain its Jefferson Avenue facility for at least two years, providing tax revenue for the City. • Prior to Thermal Circuits' move of all operations to its new facility, the City will conduct a reuse study to determine the most productive redevelopment plan for the Jefferson Avenue facility, taking steps to ensure that the building does not remain vacant for long. 8. Likelihood of Increasing Employment Opportunities for Residents of the Project. ETA - Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the project area. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full- time jobs for residents of the project area. Thermal Circuits is in the third year of an original business plan. This plan has been revised (upward) on two occasions during this time. Forecasts have been met or exceeded each year. This record of fast growth suggests that the company has both the intention and capacity to continue to fulfill our sales and employment forecasts. The company expects that 80 percent (possibly more) of these jobs will go to Salem residents. 5 GROWTH OF THERMAL CIRCUITS: 1992 TO 1998 Yt 5ALU Total Employment 1992 $3.63 in 57 1993 $4.20 in 63 1994 $4.45 in 72 1995 $5.13 in (estimated) 85 (estimated) 1996 $5.75 in (estimated) 95 (estimated) 1997 $6.50 in (estimated) 107 (estimated) 1998 $7.48 in (estimated) 120 (estimated) 9. Other Benefits to the Project ETA - Provide any information, documentation, or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up contaminated land, job training, provision daycare, etc.) As the first company to make a commitment to locate in the vacant area off of Swampscott Road, Thermal Circuits is the catalyst for development of a six-parcel industrial park. To develop this industrial park and serve Thermal Circuits' new facility, a road and infrastructure will be constructed, opening a total of six parcels for development. Thus this project encourages the following economic spin-offs: • Development of an industrial park. This project will enable the City to offer environmentally clean, industrially zoned land to firms interested expanding within or relocating to Salem. Expansion of commercial tax base. The Chairman of Salem's Board of Assessors estimates that development of all six industrial parcels will generate $260,000 in property tax revenues annually. • Generation of iobs. Development of an industrial park has the potential to create 750 to 1,000 jobs. 6 PART C: SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS Q J This project is not a real estate project. PART D: MUNICIPAL APPROVAL 1. Documentation of Municipal Approval -- Attached are resolutions passed by the Salem City Council endorsing this application for project certification and the Tax Increment Financing plan negotiated by the City and Thermal Circuits. 2. Duration of Project Certification --The City of Salem approves this project for 10 years, as the attached City Council resolutions show. PART E: SUPPLEMENTAL INFORMATION 1. Name(s) of the business(es) intending to take advantage of state tax incentives Business Name: Thermal Circuits, Inc. Federal Employer Identification #: 042282863 Address: 4 Jefferson Avenue, Salem, MA 01970 Phone: (508) 745-1662 Fax: (508) 741-3420 Contact Person: Anthony A. Klein, President Type of organization (check that which applies): }� Corporation _X_ For profit _ S Corp _Non-profit Business Trust _Partnership _ General Partnership Limited Partnership Individual Anticipated Level of Interest: Thermal Circuits is committed to locating in the industrial park to be developed off of Swampscott Road in the Salem EOA. The company has hired architects to draw plans for the new facility and has begun to work with the land owner and the City of Salem to expedite the development and permitting processes. 7 2. A - If a corporation,please list the names and addresses of the officers and directors of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation: The following are officers and directors and owners of the company: David M. Abbott, Chairman 72 Central Street Andover, MA 01810 Anthony A. Klein, President 35 Lexington Circle Swampscott, MA 01907 John J. Kellogg, Treasurer 27 Ledge Rock Road Concord, MA 01742 3. Please provide the name, address, phone number and contact person for any organization which may own or control the applicant organization, or who are affiliated with the applicant business organization. Not applicable. 4. Certificate of Good Standing- Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a copy of a Certificate of Good Standing Please see Attachment 1 of this application. We filed our request for a Certificate of Good Standing with the Department of Revenue on February 23, 1995. 8 t •, •_ � I ��il FIS i v .i; '4 _�`, N R / t ri \ � e r i . o S. A P ja1 � � 1i1A1 ;! !- 9 CITY OF SALEM, MASSACHUSETTS PLANNING DEPARTMENT PATRICK REFFETT ONE SALEM GREEN City Planner 01970 (978)745.9595 Ext.311 Fax(978)740-0404 MEMORANDUM TO: Frank Kulik, City Assessor FROM: Patrick Reffett, City Planner f RE: Thermal Circuits TIF DATE: February 8, 2000 Thermal Circuits received a TIF in March 1995 that was approved by the City and the State. The company obtained approval from the Salem Planning Board for a two phase building project. The company completed Phase I in March 1996 and Phase II in November 1998. In May 1998, in anticipation of the expansion, Mary Cassidy, Economic Development Planner, discussed the mechanics of incorporating the expansion and the new value into the TIF with Sean Calnan, the Director of the Economic Assistance Coordinating Council. Mr. Calnan informed the Planning Department that the increased incremental value due to the expansion can be incorporated into the original TIF agreement, as long as it was on the same tax parcel, which is the case with Thermal Circuits. He indicated that further approvals from the State and City were not required. If the City and company wanted to change the length or percentages of the TIF, that would require City approval. Therefore, the Assessors should apply the current exemption percentage to the new incremental value based on the Phase 11 expansion. Please feel free to call me if you have additional questions. Cc: Stanley J. Usovicz, Jr., Mayor Attorney Joseph Correnti Anthony Klein, Thermal Circuits CITY OF SALEM, MASSACHUSETTS PLANNING DEPARTMENT coxo� WILLIAM E. LUSTER 5��� �P ONE SALEM GREEN City Planner = ss 01970 (508) 745-9595, EXT. 311 FAX (508) 744-5918 TO: Tony FROM: Michelle RE: QUALIFYING FOR STATE & LOCAL TAX CREDITS DATE: February 13, 1995 To ensure that Thermal Circuits can take advantage of state and local tax credits, the company must be declared a "certified project" by the Economic Assistance Coordinating Council, the state body that oversees tax incentive programs. I know that you're much too busy planning the new facility to devote much time to paperwork. So, I have started to prepare your application for project certification. Of course, I do not know enough about the company to provide all of the information required. On the attached application, I have noted where I need your help. As with everything else we are working on, we should aim to complete this application as soon as possible. Also, I would appreciate it if you could provide the information I requested in connection with our CDAG application. Thanks for your help. Post-It'"brand fax transmittal memo 7671 "Pages pages p R From TO Co. `— Phone# Dept. Fa x# a'a '/ Fax# Fax '�"l 1�3�t February 13, 1995 Swampscott Road Economic Opportunity Area, Salem SECTION 3 PROJECT CERTIFICATION Instructions: This application form should be completed by businesses seeking project certification. Businesses may be eligible for project certification if the business controls a facility which is located or which intends to locate or expand its operations in an EOA. The business must obtain municipal approval for the project prior to submitting the application form to the EACC. The application should be typed on 8/2/ x 11 inch paper. The pages should be indexed and numbered. Please submit ten (10) copies of the completed application and ten (10) copies of all other required application materials to Karen S. Baptiste, Director of Economic Assistance, Massachusetts Office of Business Development, One Ashburton Place, Room 2101, Boston, MA 02108. PART A: APPLICATION INFORMATION 1. Name and address of business submitting application: Thermal Circuits, Inc. 4 Jefferson Ave. Salem, MA 01970 2. Name and address of project (if different from business): This project involves the construction of a new facility for Thermal Circuits in the Swampscott Road EOA in Salem. This 29-acre area is currently undeveloped. Construction of a road and infrastructure will be completed in Spring 1995. There is no mailing address to report at this time. 3. Location of ETA: Salem 4. Location of EOA: In the area of 29 Swampscott Road, Salem 5. Nature and Purpose of Project: TONY --FEEL FREE TO ADD TO THIS DESCRIPTION Nature of Project: Thermal Circuits, a Salem manufacturer of heaters and heater 1 assemblies, intends to purchase a four-acre development parcel and construct a new, 26,000 s.f. manufacturing facility at the Swamspcott Road Economic Opportunity Area in Salem. The building will be constructed to allow for future expansion. [According to the Salem Zoning Ordinance, the maximum allowable foot print (ground floor) is 78,408 square feet. The maximum height is 50 feet. Thus, depending on the first floor height, three to four stories could be added. If four stories are constructed, the maximum allowable building size would be 313,632 square feet (4"78,408).] The company will continue to operate its current facility at Jefferson Avenue for at least two years, possibly longer. Purpose of Project: For Thermal Circuits, the purpose of this project is to increase its manufacturing capability. The company must expand its operations to continue to serve its customers and grow. TONY, YOU WOULD KNOW BETTER THAN I HOW TO DESCRIBE THE PURPOSE OF THE PROJECT FROM THERMAL CIRCUITS' PERSPECTIVE. For the City, the purpose of this project is to retain a growing manufacturer in the City, save 80 jobs and promote the opportunity to generate new jobs, expand the City's tax base and begin the development of an.industrial park. The EOA -- approximately 29 acres of undeveloped, industrially-zoned land-- consists of six development parcels. Construction of a road and infrastructure to serve the entire area will accompany development of Thermal Circuits' new facility. This infrastructure development --to be paid for with federal Community Development Black Grant funds and with a Community Development Action Grant from the Executive Office of Communities and Development -- will open the entire area for development, creating a small industrial park. PART B: MANDATORY REQUIREMENTS 1. Is the proposed project an expansion of an existing business that is currently located in the EOA? No. 2. Is the proposed project a new facility to be located within an EOA after the date of this application? Yes. (a) Is this the applicant business'first facility in the Commonwealth? No. 2 (b) How many new permanent full-time employees will be employed by the applicant business at the new facility? PLEASE PROVIDE YOUR BEST ESTIMATE OF HOW MANY NEW EMPLOYEES WILL HAVE JOINED THE COMPANY WHEN YOU MOVE INTO THE NEW PLANT. THEN, PROVIDE ESTIMATES OF GROWTH IN THE COMING MONTHS AND YEARS. (c) (i) Will the project result in the replacement or relocation of any permanent,full- time employees who work existing facilities located in the Commonwealth? If yes, where are the facilities located and how many permanent full-time employees will be replaced or relocated? PLEASE FILL IN THE BLANKS. When the new facility is complete, approximately of Thermal Circuits' current employees will be assigned to the new plant. We anticipate that new employees will be hired and assigned to the new facility. Approximately will remain in the facility at 4 Jefferson Avenue. (ii)Provide documentation demonstrating that you are not seeking project certification or relocation for any portion of the project that is attributable to the replacement or relocation of permanent full-time employees of an existing facility already located in the Commonwealth. This project enables the continued growth of Thermal Circuits and is more than simply the relocation of employees from one facility to another. As the answer to question cl shows, some employees will be reassigned to the new facility. However, this project generates jobs as well. To meet current orders and obligations, Thermal Circuits must keep both plants in operation. In time, it will be more efficient to move all operations to the new, modern facility and close the Jefferson Avenue plant. The new facility will be built to allow for expansion. We expect that in years to come, Thermal Circuits will expand the building size beyond 26,000 s.f. The reassignment of employees from the existing plant to the new facility will be smooth and convenient. The new facility is located just—miles from the Jefferson Avenue plant. Many of the employees who walk to work will continue to be able to do so. Those who rely on public transportation will continue to be served. It is important to note that The City of Salem has agreed to fund a reuse study for the existing Jefferson Avenue facility. This study will examine redevelopment options for the site. Both the City of Salem and Thermal 3 Circuits are committed to pursuing a productive reuse of the Jefferson Avenue facility when Thermal Circuits vacates the building. 3. Does theroj osero d project involve the renovation and reuse f p p p eo an abandoned building? No. 4. Local Employment - How many residents of the ETA are expected to be employed in new permanent full-time jobs at the project? What actions will you take to recruit employees from among residents of the ETA? PLEASE PROVIDE YOUR BEST GUESS OF HOW MANY SALEM RESIDENTS WILL BE AMONG THE NEWLY HIRED. 5. Affirmative Action - describe your affirmative action goals and recruitment techniques that will be used to fill the newly created jobs. SINCE THERMAL CIRCUITS DOES NOT HAVE A FORMAL AFFIRMATIVE ACTION HIRING PLAN, DESCRIBE YOUR HIRING PHILOSOPHY, POINTING OUT THAT THERMAL CIRCUITS DOES NOT DISCRIMINATE. PROVIDE AN ESTIMATE OF HOW MANY MINORITIES WORK IN THE COMPANY. 6. Agreement Between the Business and Area banks - If the business has entered into any agreement with area banking institutions relating to the business' intention to deposit funds in these banks and the banks' intentions to commit a portion of such deposits to fund loans to businesses in the EOA, pursuant to the Massachusetts Capital Access Program, established by M.G.L. c. 23A, Section 57, provide documentation of such agreement or agreements. No such agreement exists. 7. Economic Benefits of Project Certification - Provide a description of the benefits that are anticipated for the business and the project, if the project is certified. Benefits to Thermal Circuits: • The company will receive approximately $232,000 in local property tax benefits over a ten year period. • The construction of a $975,000 plant will entitle the company to $48,750 in state investment tax credits. • The company will receive state investment tax credits as a result of investment in plant and equipment. 4 • Construction of a new facility will enable Thermal Circuits to grow by x%. • The City of Salem has agreed to finance a study of the reuse of the Jefferson Avenue facility. The study will help the company to identify parties interested in redeveloping the building and will enhance the company's ability to sell this real estate. Benefits to the City of Salem: • This project retains 80 jobs in Salem and adds more. • The City has agreed to a ten-year tax increment financing plan with Thermal Circuits. Nevertheless, this project immediately generates $39,000 in additional tax revenue, since the tax bills will increase for the parcels surrounding the Thermal Circuits plant. • After Thermal Circuits' TIF plan expires, the company will pay approximately $38,479 per year in property taxes. • Thermal Circuits plans to maintain its Jefferson Avenue facility for at least two years, providing tax revenue for the City. • Prior to Thermal Circuits' move of all operations to its new facility, the City will conduct a reuse study to determine the most productive redevelopment plan for the Jefferson Avenue facility, taking steps to ensure that the building does not remain vacant for long. 8. Likelihood of Increasing Employment Opportunities for Residents of the Project ETA - Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the project area. I GUESS HERE YOU SHOULD PROVIDE ESTIMATES THE COMPANY'S GROWTH, SHOWING THAT THIS GROWTH REQUIRES NEW EMPLOYEES. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full-time jobs for residents of the project area. 5 AGAIN, CITE THE COMPANY'S EXPANSION AND ESTIMATES OF NEW EMPLOYEES 9. Other Benefits to the Project ETA - Provide any information, documentation, or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up on contaminated land, job training, provision daycare, etc.) Thermal Circuits is the first company to locate in the Swampscott Road Economic Opportunity Area. To develop this EOA and serve Thermal Circuits' new facility, a road and infrastructure will be constructed, opening a total of six parcels for development. The development of a new Thermal Circuits plant will encourage the following economic spin-offs: • Development of an industrial lark. This project will enable the City to offer environmentally clean, industrially zoned land to firms interested expanding within or relocating to Salem. • Expansion of commercial tax base. Development of all six industrial parcels will generate $260,000 in property tax revenues annually. • Generation of lobs. Development of an industrial park has the potential to create 750 to 1000 jobs. PART C: SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS This project is not a real estate project. PART D: MUNICIPAL APPROVAL 1. Documentation of Municipal Approval --I WILL ATTACH DOCUMENTATION 2. Duration of Project Certification -- The City of Salem approves this project for ten years. I WILL ATTACH DOCUMENTATION. 6 PART E: SUPPLEMENTAL INFORMATION 1. Name(s) of the business(es) intending to take advantage of state tax incentives Business Name: Thermal Circuits, Inc. Federal Employer Identification #: Address: 4 Jefferson Ave, Salem, MA 01970 Phone: (508) 745-1662 Fax: (508) Contact Person: Anthony A. Klein, President Type of organization (check that which applies): Corporation For profit _ S Corp _Non-profit Business Trust Partnership _ General Partnership Limited Partnership Individual Anticipated Level of Interest: Thermal Circuits is committed to locating in the Swampscott Road EOA. The company has hired architects to draw plans for the new facility and has begun to work with the land owner and the City of Salem to expedite the development and permitting processes. Business Name: No other business intends to take advantage of state tax credits at this time. Federal Employer Identification #: Address: Phone: Fax: Contact Person: Type of organization (check that which applies): Corporation For profit _S Corp Non-profit Business Trust Partnership _ General Partnership Limited Partnership Individual Anticipated Level of Interest: 7 2. A - If a corporation,please list the names and addresses of the officers and directors of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation B - If a partnership,please list the names and addresses of all partners, and include the proportionate share owned by each partner. C - If a business trust, please name al members and beneficiaries f said trust. 3. Please provide the name, address, phone number and contact person for any organization which may own or control the applicant organization, or who are affiliated with the applicant business organization. 4. Certificate of Good Standing - Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a copy of a Certificate of Good Standing Please see Attachment 1 of this application. TONY --I SUGGEST THAT YOU FILE FOR A CERTIFICATE AS SOON AS POSSIBLE. 8 SSP Sp _ //LI It fi Commonwealth of Massachusetts Department of Revenue Taxpayer Service certmease unit 215 Firm Street Cambridge, MA 02142 Request Requirements for a Gertificate of Good Standing To obtain a Certificate of Good Standing, a corporation must send DOR a request letter explaining why the certificate is needed.The letter must be signed by an officer of the corporation and must include the following: 1. Types of taxes to which the corporation is subject and the corresponding Massachusetts identification numbers. 2. Power of Attorney for any third parties with whom this matter may be discussed. (Form M-2848) 3. Any returns and payments still due for any tax to which the corporation is subject, 4. $10 filing fee with check made payable to Commonwealth of Massachusetts.Add$5 for each additional copy requested. 5. A copy of 501C letter from the federal government if the requester is a non-profit corpo- ration (Chapter 180). DOR will notify the requester of any remaining liabilities. A certificate will be issued only if the organization is in full compliance. For more information on certificates of good standing, contact the Bureau of Technical Services at(617)621-5500. Mail Request to: Massachusetts Department of Revenue Taxpayer Service Certificate Unit 215 First Street, 3rd Floor Cambridge, MA 02142 Mitchell Adams Mark McQuillan Commissioner Deputy Commissioner 09/01/95 17:05 $7419420 THERMAL CIRCUITS 0003/003 EffTHERMAL CIRCUITS speciallting;in the design,engineering,and preductlen of surface heaters,heater aesemDllee,and Infrared pend emiHen TO: Department Managers Supervisory Personnel Employees Applicants for Employment SUBJECT: Equal Employment Opportunity OBJECTIVE:To obtain qualified employees consistent with position requirements;to seek, employ, promote, and treat all employees and applicants for employment without discrimination as to race, color, creed, sex or national origin. It is the policy of Thermal Circuits Inc. to give equal opportunity to all qualified persons without regard to race, color, creed, sex or national origin. All employment practices are to provide that all individuals be recruited, hired, assigned, advanced, compensated and retained on the basis of their qualifications and treated equally in these and all other respects without regard to race, color, creed, sex or national origin. It shall be considered the responsibility of every supervisory employee to further the implementation of this policy and insure conformance by their subordinates. Supervisory personnel as well as those responsible for hiring new employees must take affirmative action in the elimination of any possible discrimination towards employees and applicants for employment with Thermal Circuits Inc. in all categories and levels of employment and employee relations. Responsibility for seeing that this policy is continuously followed has been assigned to Timothy Doggett. He shall work with each department manager and plant supervisor in furthering its implementation and monitoring the progress being made. Signature: Anth . KI in, President Thermal circulls lnC.,4.letlerson Avenue.Salcm.MA01970-2976 Telephonceoo.aoo-MEAT(a328)Fax 508-741-3420 RESOLUTION AUTHORIZING THE CREATION OF AN ECONOMIC OPPORTUNITY AREA WHEREAS, the Salem City Council strongly supports increased economic development to provide additional jobs for City residents, and expanded commercial and industrial activity with the City to promote and develop a healthy economy and stronger tax base; WHEREAS, the City of Salem is part of the Beverly & Salem Regional Economic Target Area (ETA) designated on September 12, 1994 by the Economic Assistance Coordinating Council; WHEREAS, the Salem City Council desires beneficial economic uses creating jobs for local residents and increasing commercial and industrial activity for the area known as the Salem Economic Opportunity Area; WHEREAS, the Salem City Council desires that this area, described as the City of Salem, be designated as the Salem Economic Opportunity Area; WHEREAS, finds that the proposed Salem Economic Opportunity Area meets the definition of a Decadent Area as defined by 402 CMR 2.03; WHEREAS, the Salem City Council finds that the proposed Salem Economic Opportunity Area meets the local criteria set forth in the approved Beverly & Salem Regional Economic Target Area application; WHEREAS, the Salem City Council supports and endorses the economic development goals for the Salem Economic Opportunity Area; WHEREAS, the ability of the municipality, the needs of the proposed economic development projects, and the community benefits of proposed projects will be reasonably proportional to state tax incentives offered through the Massachusetts Economic Development Incentive Program, and the resulting economic development benefits to the municipality; NOW THEREFORE BE IT RESOLVED by the Salem City Council that the following activities as necessary pursuant to the application for an Economic Opportunity Area designation in the City of Salem be authorized; 1. The City Council hereby authorizes the submission of the Economic Opportunity Area application to the Massachusetts Economic Assistance Coordinating Council, substantially in the form attached hereto as Exhibit 1; 2. The Salem Economic Opportunity Area is defined to be: The corporate boundaries of the City of Salem, MA A map of said area is attached, and marked as Exhibit 2, which is hereby made a part of this Resolution. 3. The City Council agrees to authorize the use of either tax increment financing or a special tax assessment for each qualified certified project located within said Economic Opportunity Area. Adopted this day of ✓j�L Chi 199 , by the Salem City Council. �/l J.H . mDate 3111, y Neil J. H ngton, or Attest: eborah E. Burkinshaw, City Clerk SEAL EXHIBIT 1: Application to Designate Salem Economic Opportunity Area EXHIBIT 2: Map of Proposed EOA r ~ RESOLUTION AUTHORIZING THE USE OF TAX INCREMENT FINANCING IN THE SALEM ECONOMIC OPPORTUNITY AREA WHEREAS, the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; NOW THEREFORE BE IT RESOLVED by the City Council of the City of Salem that: (1) Tax Increment Financing may be used as a tool to encourage economic development within the Salem Economic Opportunity Area. (2) The Mayor is hereby authorized to execute and implement Tax Increment Financing agreements. q Adopted this day of �CG 1 19 95 by the Salem City Council at a regular City Council meeting with a quorum present. Neil J. Harrington, Mayor Date ATTEST: 2 Z'I- Deborah E. Burkinshaw, City Clerk SEAL CITY OF SALEM. MA FAX COVER LL-r= FAX (508) 744-5418 DATE 3 TmAF-. FROM: Ich" AAa"AwMA&-wv DEPT: r. M J TO: ��� -- %- / �y 'I SUBJECT.• �n/Drik � �/ � COMMENTS: WE ARE TRANSMn-MG TMS ANDy PAGES (S). IF YOU HAVE ANY QUESTIONS OR PROBLEMS, PLEASE CALL US AT (5boo) -AT 9,r9.r K%I!/ met-, '� •tY i d CITY OF SALEM, MASSACHUSETTS PLANNING DEPARTMENT WILLIAM E. LUSTER - ONE SALEM GREEN City Planner " 01970 (508) 745-9595, EXT. 311 FAX (508) 744-5918 TO: Kathy McCabe Karen Baptiste FROM: Michelle Cammarata RE: CORRECTION TO TIF PROPOSAL DATE: March 24, 1995 Attached is a correction to the TIF proposal submitted to you on March 10. The budget for construction of road and infrastructure outlined on pages 6 and 7 is $575,482. However, I entered the wrong cost ($137,005) for street and site improvements. (That is the portion of this line item to be paid for with CDBG funds.) The total cost of street and site improvements is $256,882 (CDBG plus CDAG financing). Now the total project cost makes sense. I thought you might want to present the amended charts to the EACC members in case they caught my error in arithmetic. Please call if you have any questions or need more information. Next week, I will have for you a TIF agreement signed by Mayor Harrington and Tony Klein of Thermal Circuits. Thanks for your help. City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 Estimates of tax revenue: During the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. After Thermal Circuits' TIF Plan expires,the tax impact of development will be $76,456 per year. B. Planned Public Projects: The City of Salem will direct a Community Development Action Grant of$260,000 to construct a road and infrastructure from the existing Swamspcott Road to the TIF Zone (the site of Thermal Circuits' new plant.) This road will serve three of the six development parcels that make up the industrial park under development off of Swampscott Road. The City will use CDBG funds to enable the completion of a road to serve the remaining three parcels. This infrastructure development will create a small industrial park. Budget: The road is 1,500 linear feet and can be constructed for approximately $384 per linear foot. BUDGET FOR CONSTRUCTION OF ROAD AND INFRASTRUCTURE Line Item Amount Clearance& Demolition $141,273 Street& Site Improvements $256,882 Water& Sewer Facilities $109,773 Professional Fees (3%) $ 15,238 Cost Subtotal $523,166 Contingencies (10%) $ 52,316 Total Project Cost $575,482 6 MITHERMAL CIRCUITS ' specializing in ibe design,engineering and . production of surface heaters,air heaters,molded heaters, heater assemblies,and infrared panel ANTHONY A. KLEIN ' President Chief Chief Executive officer + ^ Email:Klein@thermalcircuits.cum Web:www.thai9 u�'ts • " OneTedvwbgY lI,T KKJY�, kmAoi741.3420 • _ -7000 Telephone 80OM&HEAT(432.8) Fax 6` • r 04/18/98' 15:13 09787413420 THERMAL CIRCUITS (N01/004 THERMAL FAXCD CIRCUITS 3 aPW01lZJn9 In the design,onpineerinp,and productlen of surface haetere,haster assembllee,and Infrared panel amiltars 61 GATE: -9F PHONE NO: FAX NO: TO: / ATTN: � 4 el Pyo FROM: SUBJECT: i .-tee s SHEET 1 of +f Thermal Clrcults Inc, One Technology Way Technology Park Salem, Massachusetts 01970-7000 Telephone 800�OB.HEAT(4328) Facsimile 50B-741-3420 March 10, 1995 Salem Economic Opportunity Area SECTION 3 PROJECT CERTIFICATION Instructions: This application form should be completed by businesses seeking project certification. Businesses may be eligible for project certification if the business controls a facility which is located or which intends to locate or expand its operations in an EOA. The business must obtain municipal approval for the project prior to submitting the application form to the EACC. The application should be typed on 8 1/2 x 11 inch paper. The pages should be indexed and numbered. Please submit ten (10) copies of the completed application and ten (10) copies of all other required application materials to Karen S. Baptiste, Director of Economic Assistance, Massachusetts Office of Business Development, One Ashburton Place, Room 2101, Boston, MA 02108. PART A: APPLICATION INFORMATION 1. Name and address of business submitting application: Thermal Circuits, Inc. 4 Jefferson Avenue Salem, MA 01970 2. Name and address of project (if different from business): This project involves the construction of a new manufacturing facility for Thermal Circuits at 58 Swampscott Road in Salem. 3. Location of ETA: Beverly & Salem Regional ETA 4. Location of EOA: Salem EOA 5. Nature and Purpose of Project: Nature of Project: Thermal Circuits, a Salem manufacturer of heaters and heater assemblies, intends to purchase a four-acre development parcel and construct a new, 26,000 square foot manufacturing facility in the Salem Economic Opportunity Area in d" Salem. The building will be constructed to allow for future expansion. [According to the Salem Zoning Ordinance, the maximum allowable foot print (ground floor) is _ 1 00 78,408 square feet. The maximum height is 50 feet. Thus, depending on the first floor height, three to four stories could be added. If four stories are constructed, the maximum allowable building size would be 313,632 square feet (4 floors, each 78,408 square feet).] The company will continue to operate its current facility at Jefferson Avenue for at least two years, possibly longer. Purpose of Project: For Thermal Circuits, the purpose of this project is to increase its manufacturing capability. The company must expand its operations to continue to serve its customers and grow. For the City, the purposes of this project are: to retain a growing manufacturer in the City; save 81 jobs and promote the opportunity to generate new jobs; expand the City's tax base and begin the development of an industrial park off of Swampscott Road. The industrial park— approximately 29 acr s of undeveloped, industrially-zoned land— consists of six development parcels. Therm Circuits will be the first company to locate in the park. Construction of a road'and infrastructure to serve the entire area will accompany development of Thermal Circuits' new facility. This infrastructure development —to be paid for with federal Community Development Block Grant funds and with a Community Development Action Grant from the Executive Office of Communities and Development — will open the entire area for development. PART B: MANDATORY REQUIREMENTS 1. Is the proposed project an expansion of an existing business that is currently located in the EOA? Yes. Thermal Circuits currently operates a facility at 4 Jefferson Avenue in Salem. The company will construct a new plant at Swampscott Road in Salem but will continue to operate its Jefferson Avenue facility for at least two years after construction of the new plant 2. Is the proposed project a new facility to be located within an ECA after the date of this application? Yes. (a) Is this the applicant business'first facility in the Commonwealth? No. (b) How many new permanent full-time employees will be employed by the applicant business at the new facility? Approximately 12 new permanent, full-time employees will be hired in the first year and assigned to the new plant. Thereafter, approximately nine to 12 new employees per year will be hired and 2 assigned to the new facility. (c) (i) Will the project result in the replacement or relocation of any permanent,full- time employees who work in existing facilities located in the Commonwealth? If yes, where are the facilities located and how many permanent full-time employees will be replaced or relocated? When the new facility is complete, approximately 60 of Thermal Circuits' 81 current employees will be assigned to the new plant. Approximately 21 current employees will remain in the facility at 4 Jefferson Avenue in Salem. We anticipate that 12 new employees will be hired and assigned to the new facility in the first year. Thereafter, approximately nine to 12 new employees per year will be hired and assigned to the new facility. (ii)Provide documentation demonstrating that you are not seeking project certification or relocation for any portion of the project that is attributable to the replacement or relocation of permanent full-time employees of an existing facility already located in the Commonwealth. This project allows for the continued growth of Thermal Circuits and is more than simply the relocation of employees from one facility to another. As the answer to question cl shows, some employees will be reassigned to the new facility. However, this project generates job's as well. To meet current orders and obligations, Thermal Circuits must keep both plants in operation. In time, it will be more efficient to move all operations to the new, modern facility off of Swampscott Road. The new facility will be built to allow for expansion. We expect that in years to come, Thermal Circuits will expand the building size beyond 26,000 square feet. The reassignment of employees from the existing plant to our new facility will be smooth and convenient. The new facility is located just 1.5 miles from the Jefferson Avenue plant. Many of the employees who walk to work will continue to be able to do so. Those who rely on public transportation will also continue to be served. It is important to note that the City of Salem has agreed to fund a reuse study for the existing Jefferson Avenue facility. This study will examine redevelopment options for the site. Both the City of Salem and Thermal Circuits are committed to pursuing a productive reuse of the Jefferson Avenue facility when Thermal Circuits vacates the building. 3. Does the proposed project involve the renovation and reuse of an abandoned building? No. 3 4. Local Employment - How many residents of the ETA are expected to be employed in a new permanent full-time jobs at the project? What actions will you take to recruit employees from among residents of the ETA? Thermal Circuits expects that most (perhaps 80%) of its new hires will be from Salem. The company plans to advertise only in the Salem Evening Nems. 5. Affirmative Action - describe your affirmative action goals and recruitment techniques that will be used to fill the newly created jobs. See the attached sheet for Thermal Circuits' hiring policy. The company currently employs 18 minorities out of 81 total employees. 6. Agreement Between the Business and Area banks - If the business has entered into any agreement with area banking institutions relating to the business' intention to deposit funds in these banks and the banks' intentions to commit a portion of such deposits to fund loans to businesses in the EOA, pursuant to the Massachusetts Capital Access Program, established by M.G.L. c. 23A, Section 57, provide documentation of such agreement or agreements. No such agreement exists. 7. Economic Benefits of Project Certification - Provide a description of the benefits that are anticipated for the business and the project, if the project is certified. Benefits to Thermal Circuits: • The company will receive approximately $232,000 in local property tax benefits over 10 years. • The construction of a S975,000 plant will entitle the company to $48,750 in state investment tax credits. • The company will receive additional state investment tax credits as a result of investment in equipment. • Construction of a new facility will enable Thermal Circuits to increase sales by 46% by 1998. • The City of Salem has agreed to finance a study of the reuse of the Jefferson Avenue facility. This study will help the company to identify parties interested in redeveloping the building and enhance the company's ability to sell this real estate. 4 Benefits to the City of Salem: • This project retains 81 jobs in Salem and adds 40 more. • The City has agreed to a 10-year tax increment financing plan with Thermal Circuits. Nevertheless, this project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. • Thermal Circuits will maintain operations at its existing Jefferson Avenue facility for at least two years, continuing to generate revenue for the City. • After all local property tax abatements expire, this project will generate $76,456 per year in property tax revenues. • Thermal Circuits plans to maintain its Jefferson Avenue facility for at least two years, providing tax revenue for the City. • Prior to Thermal Circuits' move of all operations to its new facility, the City will conduct a reuse study to determine the most productive redevelopment plan for the Jefferson Avenue facility, taking steps to ensure that the building does not remain vacant for long. 8. Likelihood of Increasing Employment Opportunities for Residents of the Project ETA - Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the project area. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full- time jobs for residents of the project area. Thermal Circuits is in the third year of an original business plan. This plan has been revised (upward) on two occasions during this time. Forecasts have been met or exceeded each year. This record of fast growth suggests that the company has both the intention and capacity to continue to fulfill our sales and employment forecasts. The company expects that 80 percent (possibly more) of these jobs will go to Salem residents. 5 GROWTH OF THERMAL CIRCUITS: 1992 TO 1998 Year Sales Total Employment 1992 $3.63 in 57 1993 $4.20 in 63 1994 $4.45 in 72 1995 $5.13 in (estimated) 85 (estimated) 1996 $5.75 in (estimated) 95 (estimated) 1997 $6.50 in (estimated) 107 (estimated) 1998 $7.48 in (estimated) 120 (estimated) 9. Other Benefits to the Project ETA - Provide any information, documentation, or studies demonstrating any additional benefits (i.e. reduction of blight, reuse of abandoned buildings, clean up contaminated land, job training, provision daycare, etc.) As the first company to make a commitment to locate in the vacant area off of Swampscott Road, Thermal Circuits is the catalyst for development of a six-parcel industrial park. To develop this industrial park and serve Thermal Circuits' new facility, a road and infrastructure will be constructed, opening a total of six parcels for development. Thus this project encourages the following economic spin-offs: • Development of an industrial park. This project will enable the City to offer environmentally clean, industrially zoned land to firms interested expanding within or relocating to Salem. Expansion of commercial tax base. The Chairman of Salem's Board of Assessors estimates that development of all six industrial parcels will generate $260,000 in property tax revenues annually. • Generation of jobs. Development of an industrial park has the potential to create 750 to 1,000 jobs. 6 PART C: SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS This project is not a real estate project. PART D: MUNICIPAL APPROVAL 1. Documentation of Municipal Approval — Attached are resolutions passed by the Salem City Council endorsing this application for project certification and the Tax Increment Financing plan negotiated by the City and Thermal Circuits. 2. Duration of Project Certification -- The City of Salem approves this project for 10 years, as the attached City Council resolutions show. PART E: SUPPLEMENTAL INFORMATION 1. Name(s) of the business(es) intending to take advantage of state tax incentives Business Name: Thermal Circuits, Inc. Federal Employer Identification #: 042282863 Address: 4 Jefferson Avenue, Salem, MA 01970 Phone: (508) 745-1662 Fax: (508) 741-3420 Contact Person: Anthony A. Klein, President Type of organization (check that which applies): _ Corporation _X_For profit _ S Corp _Non-profit Business Trust _ Partnership _General Partnership Limited Partnership Individual Anticipated Level of Interest: Thermal Circuits is committed to locating in the industrial park to be developed off of Swampscott Road in the Salem EOA. The company has hired architects to draw plans for the new facility and has begun to work with the land owner and the City of Salem to expedite the development and permitting processes. 7 2. A -If a corporation,please list the names and addresses of the officers and directors of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation: The following are officers and directors and owners of the company: David M. Abbott, Chairman 72 Central Street Andover, MA 01810 Anthony A. Klein, President 35 Lexington Circle Swampscott, MA 01907 John J. Kellogg, Treasurer 27 Ledge Rock Road Concord, MA 01742 3. Please provide the name, address, phone number and contact person for any organization which may own or control the applicant organization, or who are affiliated with the applicant business organization. Not applicable. 4. Certificate of Good Standing- Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a copy of a Certificate of Good Standing Please see Attachment 1 of this application. We filed our request for a Certificate of Good Standing with the Department of Revenue on February 23, 1995. 8 RESOLUTION APPROVING CERTIFIED PROJECT APPLICATION OF Thermal Circuits, Inc. WHEREAS, Thermal Circuits, Inc. has applied for designation as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter 23A of Massachusetts General laws; WHEREAS, Thermal Circuits, Inc. meets the minimum standards of the Economic Development Incentive Program and the local economic development goals and criteria established as part of the documents creating the Beverly& Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the proposed certified project is located at 58 Swampscott Road, tax parcel # 763. The legal description of this are is as follows and is within the boundaries of the Salem Economic Opportunity Area: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty(350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. WHEREAS the City of Salem has agreed to offer Thermal Circuits, Inc. a Tax Increment Financing Agreement; WHEREAS, Thermal Circuits, Inc. will invest approximately $975,0001to construct a new manufacturing facility and will retain 81 jobs and create approximately 40 new permanent, full-time jobs for residents of the Beverly & Salem Regional Economic Target Area, and the City within three years. NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Thermal Circuits, Inc., and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for its approval and endorsement. Adopted this day of `_��Cz ' 199,6 , by the Salem City Council. �7 Date6� Neil J. HavAngton, M13for Attest: Deborah E. Burkinshaw, City Clerk SEAL ' Commonwealth of Massachusetts Department of Revenue Taxpayer Service Certificate Unfi 215 First Street Cambridge,MA 02142 March 13, 1 995 THERMAL CIRCUITS, INC. 4 JEFFERSON AVENUE SALEM, rV1A 01970 CERTIFICATE OF GOOD STANDING It is hereby certified by the Commissioner of Revenue of the Commonwealth of Massachusetts as of the above date, that the above named corporation is a domestic corporation organized in Massachusetts on October 5, 1961 and that said corporation is in good standing with respect to any and all returns due and taxes payable to the Commonwealth under General Laws, Chapter 62C, and the statutes referred to in Section 2 thereof. This certificate does not certify the corporation's standing as to unemployment insurance taxes under G.L.Ch. 151 a or taxes under any other provisions or law. No. 23352 B �• Deputy Chief, Taxpayer Assistance Bureau THIS IS NOT A WAIVER OF LIEN ISSUED UNDER GENERAL LAWS, CHAPTER 62C, SECTION 52, AND CANNOT BE USED FOR SUCH PURPOSE. 5349 - 32976 Mitchell Adams Mark McOuillen Commissioner Deputy Commissioner City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 I. LOCATION A. Economic Opportunity Area: Salem EOA B. Municipality: City of Salem C: Tax Increment Financing (TIF) Zone: Attached are: general location map, parcel by parcel map, property lines, all thoroughfares public rights of way and easements, land use and zoning map, and the location of proposed private project. Common description of TIF Zone: The proposed Thermal Circuits TIF Zone is located off of 58 Swampscott Road in the Salem EOA. The tax parcel is #763. The legal description of this TIF Zone is: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty (350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524=13 and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. 1 1 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. D. Narrative Description of TIF Zone --Needs Problems and Opportunities: Designation of this TIF Zone meets the needs of, solves problems for and creates opportunities for both Thermal Circuits and the City of Salem. • Meeting the needs of Thermal Circuits: A rapidly growing manufacturer of heaters and heater assemblies, Thermal Circuits can no longer continue to operate in its antiquated, three-story, 20,000 s.f. manufacturing facility at 4 Jefferson Avenue in Salem. To meet customers' orders and continue to grow,the company must expand into a modern, one-floor, 26,0000 s.f. facility with room for further expansion. The tax benefits offered through the Commonwealth's Economic Development Incentive Program and this TIF plan will enable the company to invest in a state-of-the-art facility. • Meeting the needs of the City of Salem: To improve its ability to retain and attract new business,the City of Salem must gain a competitive advantage over other communities with better highway access and more land available for development. The ability to offer tax increment financing, beginning with this proposal, will help Salem to retain existing industry and attract new companies to the City. • Solving problems for the City and Thermal Circuits: Approval of this TIF Zone and TIF Plan will enable Thermal Circuits to construct a new facility in Salem, solving the operational problems that stem from the company's cramped, antiquated plant. Approval of this project solves a problem for the City as well. Without designation as a TIF Zone, the land that makes up the TIF will not be developed through ordinary market forces. Public 2 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 investment and creative economic development tools are necessary to promote the development of one of the few remaining industrially zoned, environmentally clean areas of the City of Salem. • Creating opportunityfor Thermal Circuits: Once in its new facility, Thermal Circuits will be able to continue its record of impressive growth. GROWTH OF THERMAL CIRCUITS: 1992 TO 1998 Year Sales Total Employ 1992 $3.63 in 57 1993 $4.20 in 63 1994 $4.45 in 72 E 5.13 m (estimated) 85 (estimated) 5.75 m (estimated) 95 (estimated) 6.50 m (estimated) 107 (estimated) 7.48 in (estimated) 1 120 (estimated) • Creating opportunityfor the City of Salem: Designation of this TIF Zone and approval of this TIF plan will keep Thermal Circuits in Salem, retaining jobs, creating new jobs, expanding the City's tax base and making the City a more competitive location for business. All of these benefits are described in more detail in SECTION III: TIF ZONE& ECONOMIC DEVELOPMENT. • Creating opportunityfor the City of Salem outside of this TIF Zone: Development of a new Thermal Circuits plant within this TIF Zone will serve as a catalyst for future development on the land surrounding the new facility. The Thermal Circuits TIF Zone is one of six vacant industrial parcels available at what will become a 29-acre industrial park. The City, using a state grant and Federal funds, will construct a road and infrastructure to serve all of these industrial parcels. This road construction and the tax incentives available through the Economic Development Incentive Program will keep Thermal Circuits in Salem, enable the development of the remaining five parcels and the creation of a small industrial park, generate jobs for area residents and expand the City's 3 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 tax base significantly. E. Property owners within the proposed TIF Zone: The property owner within the TIF Zone is Thermal Circuits, Inc. II. TIME The TIF Plan and TIF Zone described here will be in effect for a period of 10 years. 1II. TIF ZONE & ECONOMIC DEVELOPMENT A & B Economic Opportunities and Economic Benefits to the Community: Approving the proposed TIF Zone will create the following economic opportunities and benefits: 1. It will enable Thermal Circuits, a rapidly growing manufacturer of heaters and heater assemblies, to remain in Salem and develop a 26,000 s.f. manufacturing facility. 2. Retains 81 jobs in Salem. 3. Generates jobs: Thermal Circuits expect to hire at least 15 new employees in the Spring of 1995 and more 40 to 60 employees during the next three years. 4. Increases property tax revenue in the short term: During the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of Assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. 5. Increases property tax revenue in the long term: After Thermal Circuits' TIF Plan expires, the tax impact of development will be $76,456 per year. 6. Generates interest in Salem as a competitive location for business. If successfully approved, Salem's first TIF plan will demonstrate that the City can offer economic development tools to retain business. Success here will invite the interest of firms located outside of the City. 4 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 C: PROPOSED AND POTENTIAL LAND USES Thermal Circuits will construct a 26,000 s.f. manufacturing and office facility within the proposed TIF Zone. D. ZONING IN THE TIF ZONE The TIF Zone is currently zoned for business park development. E. No part of the proposed TIF Zone is a hazardous waste disposal site. IV. TIF ZONE PROJECTS A. Planned Private Project: Thermal Circuits will develop a 26,000 s.f. manufacturing and office facility in the proposed TIF Zone. Budget for Project: ITEM COST Land acquisition $ 50,000 Grading $ 50,000 Paving $ 45,260 Utilities $ 60,000 Parking lot lights $ 8,000 Contingency (less real estate) 10% $ 17,600 Engineering (less real estate) 4% $ 7,000 Supervision $ 10,000 New building construction $975,000 Total $1,222,860 Relevant business plans: Time schedule for development: Construction will be completed and the company will occupy its new facility on September 1, 1995. Expected increases in job creation: The company will add 15 new jobs in the Spring of 1995 and expects to add 40 to 60 new jobs over the next three years. Given the company's recent strong growth, these are conservative estimates of job creation, according to company officials. 5 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 Estimates of tax revenue: During the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. After Thermal Circuits' TIF Plan expires, the tax impact of development will be $76,456 per year. B. Planned Public Projects: The City of Salem will direct a Community Development Action Grant of$260,000 to construct a road and infrastructure from the existing Swamspcott Road to the TIF Zone (the site of Thermal Circuits' new plant.) This road will serve three of the six development parcels that make up the industrial park under development off of Swampscott Road. The City will use CDBG funds to enable the completion of a road to serve the remaining three parcels. This infrastructure development will create a small industrial park. Budeet: The road is 1,500 linear feet and can be constructed for$384 per linear foot. BUDGET FOR CONSTRUCTION OF ROAD AND INFRASTRUCTURE Line Item Amount Clearance & Demolition $141,272 Street& Site Improvements $137,005 Water& Sewer Facilities $109,700 Professional Fees (3%) $ 8,867 Cost Subtotal $516,784 Contingencies (10%) $ 51,679 Total Project Cost $568,463 6 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 V. FINANCING FOR TIF ZONE PROJECTS A. Anticipated Financing for Thermal Circuits Plant: Source: Amount: City of Salem Loan $ 50,000 (for land acquisition) Fafard Real Estate Land subsidy $ 210,000 (for land acquisition) Bank Financing $ 962,860 Total $1,222,860 B. Anticipated Financing for Construction of Road and Infrastructure: Source: Amount: Community Development Action Grant $268,553 (for construction of road and infrastructure of 700 linear feet) Community Development $299,910 (for construction of road and Block Grant infrastructure of 800 linear feet) C: Detailed Projection of Costs of Public Construction: The road is 1,500 linear feet and can be constructed for$384 per linear foot. BUDGET FOR CONSTRUCTION OF ROAD AND INFRASTRUCTURE Line Item Amount Clearance & Demolition $141,272 Street& Site Improvements $137,005 Water& Sewer Facilities $109,700 Professional Fees (3%) $ 8,867 Cost Subtotal $516,784 Contingencies (10%) $ 51,679 Total Project Cost $568,463 7 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 D. Will betterments be used to finance any public-private projects now or within the proposed life of the TIF Plan? Yes. The portion of the new road and infrastructure paid for with CDBG funds will be repaid to the City over time as the landowner, Fafard Real Estate, sells the remaining parcels served by that road. E. If Betterments or Special Assessments are a part of the TIF Plan: 1. Schedule for defrayal of construction costs: Costs will be defrayed as the land owner sells the remaining five lots for development. 2. Agreement of all participating parties in the betterment: Please see the attached Memorandum of Understanding signed by representatives of the City of Salem, Thermal Circuits and Fafard Real Estate. F. Describe how private projects will be financed: Anticipated Financing for Thermal Circuits Plant: Source: Amount: City of Salem Loan $ 50,000 (for land acquisition) Fafard Real Estate Land subsidy $ 210,000 (for land acquisition) Bank Financing $ 962,860 Total $1,222,860 Thermal Circuits is weighing financing proposals from several banks. VI. TAX INCREMENT FINANCING A. Authorization to use TIF: The attached City Council resolution authorizes the City of Salem to use TIF in the Salem EOA. Also attached is a City Council resolution approving this TIF Plan for Thermal Circuits. B. Amount of proposed tax increment exemptions from propertv taxes and applicable criteria: As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $231,621 over 10 years. Also, see the description of the proposed TIF Plan in part D of this section. C. Maximum percentage of public project costs that can be recovered through betterments or special assessments in lieu of the incremental real estate taxes: About 53 percent of the cost to develop a 1,500 foot road ($299,910 of the 8 City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 $568,463 project cost) will be repaid through betterment fees assessed on the landowner as the five remaining development parcels are sold. D. TIF exemption from prope , taxes: 1. The term of exemption is 10 years. 2. Calculation of exemption: The base valuation of the land that makes up the proposed TIF Zone is now approximately $1,300. Construction of the new plant will lead to a new valuation of approximately $38,479. The increment, therefore, is $37,179. The exemption package works as follows: YEAR THERMAL CIRCUITS PAYS 1 Only the base tax bill of$1,300.' 2 Only the base tax bill of$1,300.` 3 12.5%of the increment, plus base tax bill. 4 25.0% of the increment, plus base tax bill. 5 37.5 % of the increment, plus base tax bill. 6 50.0% of the increment, plus base tax bill. 7 62.5%of the increment, plus base tax bill 8 75.0%of the increment, plus base tax bill. 9 87.5% of the increment, plus base tax bill. 10 100%of the increment, plus base tax bill. As the attached spreadsheet shows, the City estimates the tax benefits to total approximately $231,621 over 10 years. NOTE: In years one and two, Thermal Circuits will continue to operate its existing facility at 4 Jefferson Avenue, paying property taxes of $12,212.90 per year. Also note that during the time that Thermal Circuits' TIF Plan is in effect, property tax revenue will actually increase, even as the company receives tax exemptions. The Chairman of Salem's Board of Assessors estimates that the project immediately generates $39,000 in additional tax revenue, since the tax bills increase for the parcels surrounding the Thermal Circuits plant. 3. The effective date of increment exemption is July 1, 1995 or upon approval by the Economic Assistance Coordinating Council, whichever is later. 9 r r City of Salem Tax Increment Financing Plan for Thermal Circuits, Inc. March 10, 1995 VII. APPROVAL OF TIF PROJECTS TIF projects are approved by the Salem City Council. The Mayor and his staff are responsible for negotiating TIF Plans and, after Council approval, executing those plans. Evidence of local approvals of the proposed TIF Zone and TIF Plan are provided here in the form of a resolution passed by the Salem City Council on Thursday, March 9, 1995. 10 THERMAL CIRCUITS 9-YEAR TAX INCREMENT FINANCING PLAN Value now $47,000 This is the value of the property in its current, undeveloped state. Base tax bill $1,551 Value after plant built $1,400,000 Increment in value $1,353,000 TIF is applied to the increment. Year 1 Year 2 Year 3 Year 4 Year 5 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Base tax bill $1,551 Thermal Pays $1,551 Thermal Pays $1,551 Tax on increment $5,581 Tax on increment $11,162 Tax on increment $16,743 Thermal Saves $44,649 Thermal Saves $44,649 Thermal Pays $7,132 Thermal Pays $12,713 Thermal Pays $18,294 Thermal Saves $39,068 Thermal Saves $33,487 Thermal Saves $27,906 Thermal pays base tax bill. Thermal pays base tax bill. Thermal pays taxes on 12.5%of Thermal pays taxes on 25%of Thermal pays taxes on 37.5%o increment plus base tax bill. increment plus base tax bill. increment plus base tax bill. Year Year Year Year Year 10 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Tax at full value $46,200 Base tax bill $1,551 Base tax bill $1,551 Base lax bill $1,551 Base tax bill $1,551 Thermal Pays $46,200 Tax on increment $22,325 Tax on increment $27,906 Tax on increment $33,487 Tax on increment $39,068 Thermal Saves $0 Thermal Pays $23,876 Thermal Pays $29,457 Thermal Pays $35,038 Thermal Pays $40,619 Thermal Saves $22,325 Thermal Saves $16,743 Thermal Saves $11,162 Thermal Saves $5,581 Thermal pays taxes on 50%of Thermal pays taxes on 62.5%of Thermal pays taxes on 75%of Thermal pays taxes on 87.5%of Thermal pays full tax bill. increment plus the base tax bill. increment plus the base tax bill. increment plus the base tax bill. increment plus the base tax bill. Total property tax exemptions over nine years $245,570 Total property taxes paid over nine years $146,355 RESOLUTION AUTHORIZING THE USE OF TAX INCREMENT FINANCING IN THE SALEM ECONOMIC OPPORTUNITY AREA WHEREAS. the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS. there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; NOW THEREFORE BE IT RESOLVED by the City Council of the City of Salem that: (1) Tax Increri4ent Financing may be used as a tool to encourage economic development within the Salem Economic Opportunity Area. (2) The Mayor is hereby authorized to execute and implement Tax Increment Financing agreements. Adopted this day of `:'/CGL / 19by the Salem City Council at a regular City Council meeting with a quorum present. Neil J. Harrington, Mayor Date ATTEST: pf `Deborah E. Burkinshaw, City Clerk SEAL -. RESOLUTION AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT FOR THERMAL CIRCUITS, INC. WHEREAS, the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to encourage business expansion and relocation to the City of Salem; WHEREAS, there is strong support for using Tax Increment Financing to encourage the development of a manufacturing facility for Thermal Circuits, Inc. off Swampscott Road in the Salem Economic Opportunity Area. NOW THEREFORE BE IT RESOLVED by the Salem City Council that: (1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made part of this Resolution. (2) The area to be designated as a Tax Increment Financing Zone is: That land situated in Salem in the County of Essex and Commonwealth of Massachusetts, bounded and described as follows: NORTHEASTERLY by Swampscott Road eight hundred ten and 28/100 (810.28) feet; SOUTHERLY and SOUTHEASTERLY on two courses measuring together eight hundred forty four and 95/100 (844.95) feet, NORTHEASTERLY thirty (30) feet, SOUTHEASTERLY eighty two and 84/100 (82.84) feet, NORTHEASTERLY three hundred fifty (350) feet, NORTHWESTERLY sixty seven and 84/100 (67.84) feet, NORTHEASTERLY two hundred sixty six and 11/100 (266.11) feet, NORTHWESTERLY one hundred forty one and 51/100 (141.51) feet, NORTHEASTERLY one hundred seventy three and 97/100 (173.97) feet by lot 699, as shown on plan hereinafter mentioned; SOUTHEASTERLY by land now or formerly of Margaret J. Bryson seven hundred sixteen and 16/100 (716.16) feet; SOUTHWESTERLY by lot 633, as shown on said plan, one thousand thirty four and 30/100 (1034.30) feet; WESTERLY, by land now or formerly of Frederick H. Griswold nine hundred eighty five and 40/100 (985.40) feet; NORTHEASTERLY by lots 524, 524-B and 524-A, as shown on said plan, four hundred eighteen and 43/100 (418.43) feet, and NORTHWESTERLY by said lot 524-A, as shown on said plan, five hundred eighty three and 06/100 (583.06) feet. All of said boundaries are determined by the Court to be located as shown upon plan numbered 11802-42, draw by Merrimack Engineering Services, Surveyors, dates September 13, 1985, as modified and approved by the Court, filed in the Land Registration Office, a copy of a portion of which is filed with certificate of title 55254 in said Registry, and the above described land is shown as lot 698, on last mentioned plan. Part of the above described land is subject to a Taking of Easement by the Essex County Commissioners, dated July 16 1963, and filed as Document 106456 in said Registry, and shown on plan filed with said Document. The above described land is subject to the rights and easements in favor of said lot 699, as described in Deed Document 206220 in said Registry. (3) A map of the Tax Increment Financing Zone is hereby attached as Exhibit B and made a part of this Ordinance. (4) The Tax Increment Financing Agreement shall be binding on all subsequent owners of the property in the Tax Increment Financing Zone. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement, as specified in the Tax Increment Financing Agreement. (5) A copy of the adopted Tax Increment Financing Agreement shall be forwarded to the Massachusetts Economic Assistance Coordinating Council for its approval. (6) The effective date of the Tax Increment Financing Agreement shall be July 1, 1995 or the date which the Tax Increment Financing Agreement is approved by the Massachusetts Economic Assistance Coordinating Council, whichever is later. (7) The Mayor is hereby authorized to execute and implement the Tax Increment Financing Agreement. i Adopted this day of19 �J by the Salem City Council at a regular City Council meeting with a quorum present. Neil J. Harrington, Mayor Date ATTEST: Deborah E. Burkinshaw, City Clerk SEAL EXHIBIT A: Tax Increment Financing Agreement EXHIBIT B: Map of Tax Increment Financing Zone . h TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS and THERMAL CIRCUITS, INC. This agreement is made the 30th day of March, 1995, 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,Neil J. Harrington, (hereinafter called "the CITY"), and THERMAL CIRCUITS, INC., a Massachusetts corporation with a principal place of business at 4 Jefferson Avenue, Salem, Massachusetts, 01970 and KAK Realty Trust(hereinafter collectively called "the COMPANY") . This Agreement will take effect as of July 1, 1995 (Fiscal Year 1996). WHEREAS, the COMPANY wishes to locate a manufacturing facility off of 58 Swampscott Road in Salem; and WHEREAS, the CITY is willing to grant tax concessions in return for guarantee of construction of a new manufacturing facility and employment opportunities for local workers; and WHEREAS, the Salem City Council resolved on March 9, 1995 to allow the use of Tax Increment Financing as a tool to encourage economic development within the Salem Economic Opportunity Area; and WHEREAS,the Salem City Council resolved on March 9, 1995 to endorse the Tax Increment Financing Plan negotiated by the CITY and the COMPANY. NOW, THEREFORE, in consideration of the mutual promises contained herein,the parties do mutually agree as follows: A. THE COMPANY'S OBLIGATIONS 1. The COMPANY shall locate a manufacturing facility on a certain parcel of land off of 58 Swampscott Road in Salem. "The FACILITY" as used herein means a building to be constructed containing approximately 31,000 square feet plus site improvements; that is, improvements to the unimproved parcel of land as of the date of this agreement. 2. During the life of this agreement, if the COMPANY decides to sell the FACILITY or the business or to otherwise transfer control of the FACILITY or business and/or operations thereof, the COMPANY shall give the CITY at least three months 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. r 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 A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the construction of the FACILITY. Said exemption shall be valid for a period often(10) years, beginning with fiscal year 1996 (July 1, 1995) and ending with fiscal year 2006. During each year of this agreement, the company will pay taxes based on the current value of the unimproved land as of the date of this agreement(the base tax bill) and on that portion of the value of the FACILITY which is not exempted under the agreement. The exemption schedule on the value of the FACILITY works as follows: For the first two (2) years, the COMPANY will pay only the base tax bill and will be granted an exemption of 100 percent of the full value of the FACILITY. In year three, the COMPANY will pay taxes on 12.5% of the full value of the FACILITY, plus the base tax bill. In year four, the COMPANY will pay taxes on 25% of the full value of the FACILITY, plus the base tax bill. In year five,the COMPANY will pay taxes on 37.5% of the full value of the FACILITY,plus the base tax bill. In year six, the COMPANY will pay taxes on 50%of the full value of the FACILITY, plus the base tax bill. In year seven, the COMPANY will pay taxes on 62.5% of the full value of the FACILITY, plus the base tax bill. In year eight,the COMPANY will pay taxes on 75% of the full value of the FACILITY, plus the base tax bill. In year nine, the COMPANY will pay taxes on 87.5% of the full value of the FACILITY, plus the base tax bill. In year ten, the COMPANY will pay taxes on the full value of the FACILITY. C. OTHER CONSIDERATIONS 1. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2. If the COMPANY decides to expand the facility 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 value of the expansion from propertytaxes. The exact amount of that exemption will be determined at the time of expansion. Executed as a sealed instrument on the day and year first above written. CITY OF SALEM THERMAL CIRCUITS, INC. Neil J. Hon, Mayor Anth y . I , President otary Public My commission expires N/F SALEM • A ' CONSERVATION COMMISSION � 1000'_ - -" O . N/F CITY OF SALEM LOT A 5.6'ACR LOT �p .9 CR S G N/F HUTCHINSON N/F CONNICK LOT_ C 4.0±ACRES 4g� /moo N/F BARNS ROAD TRUST T I. _ 0 / :RES N/F EXiS�ING y IMG EMI ---� PSS �SNA� 420L _ _ C OT E N1F RAGON WF W.S. TENNIS AND SQUASH N/F AaJ 1REALTY CLUB LOT F 42LACR / WE LAN f � 4 I f 1220'' CWAMPSCMT ROAD