| Brewer Considers Tax Deal for Manufacturer
BREWER — An $11 million tax increment financing package aimed at keeping a
local auto parts maker competitive and creating new jobs will be the subject of
a public hearing Tuesday night.
During the City Council’s regular monthly meeting, which starts at 6:30 p.m.,
local officials will consider a proposal to amend an existing TIF with Brewer
Automotive Components, which plans to invest heavily in new manufacturing
equipment for its plant in the East-West Industrial Park over the next few
years.
BAC comptroller Jerry Bernier said Friday that the investment would occur in
two phases. In the first phase, in 2001 and 2002, BAC plans to install a total
of $9 million in new manufacturing equipment. The company intends to add another
$2 million in equipment by 2005, he said.
City documents pertaining to the TIF proposal show that the company also
expects to expand its existing facility or build an addition to house the
equipment acquired as part of the second phase of investment.
According to Bernier, the new equipment will enable BAC to continue
manufacturing automotive components for it primary customer, the makers of the
Toyota Camry and Corolla. Those two models are undergoing design changes and if
it is to continue supplying parts, BAC needs to retool, Bernier said.
In addition, BAC has picked up some new business, also from Toyota, Bernier
said.
The equipment, which Bernier said would be state-of-the-art and will include
computer-operated robotics, is expected to result in the creation of 13 new
jobs.
It also will allow the company to retain even more positions. Bernier said
that a decision not to invest in new technology could have resulted in the loss
of an estimated 15 positions at the Brewer plant, which has a work force of 88
employees.
TIF districts, subject to local and state approval, enable municipalities to
shelter new tax revenues, thereby preventing the new value from reducing the
community’s levels of school funding and state revenue sharing, or increasing
its county tax bill.
Unlike regular taxes, which go into the general fund, a portion of the TIF
district’s taxes are earmarked for improvements and expenses directly related
to the auto parts manufacturer.
To that end, $1.46 million, or 58 percent, of the new tax proceeds the
project is projected to generate over the 20-year life of the TIF will be
retained by BAC, according to Drew Sachs, the city’s economic development
director. The city will collect 42 percent, or $1.06 million, over the same
period, he said.
The TIF agreement is structured so that the city will receive 5 percent of
the new taxes in years one through three, 25 percent in the fourth through sixth
years, 50 percent in years seven through 10, 60 percent in years 11 through 15
and all of the tax income in subsequent years.
Established in Brewer in 1989, BAC is a joint venture of two international
auto component manufacturers, Somic Ishikawa of Japan and Lemforder Metalwarren
AG of Germany. Production began in 1991.
In 1995, the company undertook an $11 million project that more than doubled
the company’s existing space and more than doubled the number of people it
employs.
This is a copyright article written by Dawn Gagnon of the NEWS Staff
that appeared in the Bangor Daily News, Saturday, March 10, 2001.
Brewer Economic Development Office
D'arcy Main-Boyington
(207)989-7500
Brewer City Hall
80 North Main Street
Brewer, Maine 04412
dmain-boyington@brewerme.org
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