Once the hone of New England’s largest coal-fired power plant, Brayton Point in Somerset, Mass., is strategically positioned to support the emerging offshore wind energy. (Google Earth)
SOMERSET, Mass. — The town of Somerset is considering giving a $20 million tax break to the Prysmian Group to help build a subsea transmission cable manufacturing facility at Brayton Point. Prysmian has already received a $25 million grant from the state for dredging and the construction of a pier.
The proposed tax cut won approval from one Somerset town committee but still requires the approval of the Board of Selectmen and town meeting. The tax break is becoming another issue in the increasingly divisive debate in Somerset over whether to give Prysmian approval to move forward with the $250 million project.
Prysmian is an Italian company with a worldwide reach and more than $16 billion in revenue. The firm is looking to cater to the emerging offshore wind businesses in the US and become a cog in the industry’s still developing supply chain.
Prysmian plans to buy 47 acres at Brayton Point, property the town would assess at $56.5 million if the deal goes through. The company will start paying property taxes of $1.4 million a year on the land as soon as the purchase is completed, according to records supplied by the company.
As construction work on the factory begins, the tax deal assumes Prysmian will pay no tax on the new buildings in the first two years, and then pay an increasing percent of what it would owe on the buildings without the tax break over the third through sixth years. The tax break, called tax increment financing, will save $20 million for Prysmian over the six-year period while the project itself will generate $27 million in new tax revenue for the town over that same time frame.
After the sixth year, the tax break would end and at least initially Prysmian would pay nearly $9 million a year in taxes to the town.
“This is a truly transformative project for the town of Somerset and I would say it’s transformative for the state of Massachusetts as well,” Jim Allen, Prysmian’s senior manager of facilities, told a town committee reviewing the deal earlier this week. “We just need help to get this project started.”
Somerset officials who gave their blessing to the tax break say it is a good deal for the town.
Many local and state officials are desperate to land Prysmian as a new corporate resident, but some people in town, particularly those that live adjacent to Brayton Point, are pressing the company to guarantee that no ships would dock at the facility and run on their diesel engines while in port. Prysmian has agreed to retrofit its own fleet of ships, but says it cannot guarantee that other ships it might need to hire in emergencies could comply with the requirement.
The town’s Zoning Board of Appeals in mid-September unanimously approved a condition requiring all ships docking at the facility to run on electricity in port, but the board, under heavy pressure from local and state officials, agreed at the very next meeting to reconsider that vote at a future meeting.
Prysmian has not said whether it would walk if the condition is retained, but a top company official called the provision “highly problematic and infeasible as written.”
Allen said the company wants to come to Brayton Point, but he couldn’t answer what would happen if the condition is not changed. At the meeting on the tax increment financing arrangement earlier this week, one resident who lives near Brayton Point suggested the company should relent and agree to the condition because it doesn’t have time to start the process over at another location in Massachusetts or in another state.
“We’re your only shot,” he said. “You can’t go anywhere else.”
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