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Siemens to seek handout from taxpayers

December 7, 2015

Walpole’s largest taxpayer is looking to add up to 600 jobs, but wants Walpole taxpayers to pick up part of the tab.

The backroom deal, which screams of corporate welfare and inappropriate government intervention to give a big business a special favor while all other taxpayers are soaked, is expected to be decided on by a Special Town Meeting in the spring, according to some sources.

Siemens reportedly approached Selectmen in August asking to start negotiations with the town for a tax-increment-financing (TIF) agreement for a proposed new expansion. The German-based conglomerate has facilities worldwide, including a 577,000-square-foot facility on Coney Street that they took over from Bayer in 2007. Siemens told Selectmen that the expansion in Walpole was dependent on receiving favorable tax terms from both the town and the state.

Selectmen negotiated an agreement that will allow Siemens to pay, on average, only about 15 25 percent of the property taxes owed on the new expansion over 20 years.

During the first five years of the agreement, the company will get a 90 percent reduction on the taxes from the increased value of the expansion, an 85 80 percent reduction in the following five years, a 80 70 percent reduction in the following five years, and a 75 60 percent reduction in the remaining five years of the agreement. It averages to about 82.5 75 percent tax savings over 20 years.

Over 20 years, the company will save at least $10 million in taxes. That equates to a savings of about $500,000 on average per year.

Selectmen discussed the issue behind closed doors during two illegally-convened executive sessions, one on August 11 and again on November 3.

The Board claimed the discussions were exempt from public meetings because they fell under the state Open Meeting Law “trade secrets” exemption. Siemens wanted the information regarding their expansion plans to be kept confidential, presumably to avoid tipping off their competitors, and Selectmen believed that the “trade secrets” exemption would allow the discussions to be kept under wraps.

But the “trade secrets” exemption only applies to cases where the governmental body holding the meeting is an energy supplier or conglomerate.

The state’s Open Meeting Law does not have an exemption that would apply to a municipality’s discussions about TIFs. All discussions regarding the negotiations with Siemens had to take place during public sessions.

When the error in the Open Meeting Law interpretation was realized last week, Selectmen decided to meet in a special meeting tomorrow night to formally release the meeting minutes from those executive sessions, and discuss the issue publicly for the first time.

Although the issue was intended to be kept confidential, one of the Selectmen apparently accidentally disclosed information about the ongoing negotiations during an October meeting in which Selectmen from four area towns, including Walpole and Medfield, met with local legislators and Mass. Secretary of Housing and Economic Development Jay Ash to discuss economic development opportunities. Medfield Selectman Richard DeSorgher posted vague information about the issue on his blog, based on the Walpole Selectman’s comments, shortly afterward. The blog post was later picked up by Walpole Times reporter Adam Stuhlman, who mentioned it briefly on Twitter at the time, but couldn’t get town officials to provide any information. 180 also used DeSorgher’s information as a starting point to obtain further details from Town Hall sources within the last week.

Rumors about the negotiations had been circulating at Town Hall for months, but were confirmed late last week when Selectmen posted Tuesday’s meeting agenda.

Walpole Selectman David Salvatore is apparently the only Selectman who is heavily against the proposed deal with Siemens. He declined public comment on the issue until after Tuesday’s meeting. Selectmen Chairman Cliff Snuffer is among those who is actively pushing to give Siemens the break.

Siemens already has an existing TIF agreement with the town, negotiated in 2008, that gives the company a 10 percent discount until 2018 on the increased value of a 115,000-square-foot expansion. As part of the deal, the company was required to target Walpole residents for the 70 additional jobs that were created.

As part of the arranged new TIF deal with the town, Siemens would not be required to target Walpole residents for the 600 additional jobs. The economic growth associated with the expansion would be largely on a regional basis, rather than locally-centered.

The TIF agreement must be approved by the state’s Economic Development Coordinating Council after approval by Town Meeting.

Stay tuned to 180 for further details.

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