Tax Increment Financing
In rare circumstances, and to provide an incentive for large-scale transformative investments in the community, the City of Framingham has offered tax incentive agreements to businesses and developers. The City negotiates Tax Increment Financing (TIF) agreements only when the benefits of private investment are expected to exceed any foregone tax revenue. Framingham accesses two state-authorized TIF programs that encourage economic development:
- The Economic Development Incentive Program (EDIP) is for commercial properties and is tied to job creation and investment
- The Urban Center Housing TIF(UCH-TIF) program encourages revitalization of commercial centers through housing development.
One important feature of these negotiated agreements is that they temporarily reduce taxes on the improvement to the property resulting from new investment (the "increment"). The City does not lose existing revenue because it continues to collect taxes on pre-investment property value. A negotiated and temporary reduction in taxes collected against the incremental value is intended to encourage investment that may not otherwise occur. After the reduction period, the City gains all taxes against the baseline value—and all taxes gained against the increment. These principles are illustrated below:
Economic Development Incentive Program (EDIP)
The EDIP program, overseen by the Massachusetts Office of Business Development (MOBD), allows cities and towns to offer TIF agreements to businesses bringing jobs and investment to communities. The agreements often include a requirement that the business create a specific number of jobs, and that the businesses invest a specific amount of money in their facilities. As of September 2017, there were two active TIF agreements under the EDIP program, for TJX and Jack's Abby.
|Business Name||Term||New jobs pledged|
|Actual new jobs to-date||Actual investment|
|Property taxes exempted to-date|
|TJX||20 years (2032)||225|
|Jack's Abby||7 years|
|*Data as reported to Mass. Office of Business Development, CY2016 Annual Reports. Click here for TJX and here for Jack's Abby.|
Urban Center Housing (UCH-TIF)
The UCH-TIF program, overseen by the Commonwealth's Department of Housing & Community Development (DHCD), is limited to projects within a designated Urban Center zone defined by the municipality. Framingham has designated the Central Business (CB) Zoning District as its zone for eligible projects, with the goal of catalyzing multi-family housing development in a "live, work, play" environment to support downtown businesses and public transit. The City's goal, as recommended in the 2015 TOD Action Plan, is to provide support to "first mover" developments in the untested downtown housing market, which has not seen any major building in decades. In 2017, Town Meeting approved TIF agreements for two major housing projects, at 75 Concord Street and 266 Waverly Street.
|Developer name||Duration||New housing units||Investment||Tax exemption|
(75 Concord Street)
|15 years||197||$60 million||$6.3 million|
(266 Waverly Street)
|7 years||270||$73 million||$2.8 million|