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Rooke questions deal with Smith & Wesson

Date: 1/18/2011

Jan. 19, 2011

By G. Michael Dobbs

Managing Editor

SPRINGFIELD — City Councilor Tim Rooke has requested information from the state agency that monitors special tax arrangements between businesses and municipalities for information on whether or not gun-making icon Smith & Wesson lived up to the terms of a Tax Increment Financing agreement (TIF) with the city from FY1998 through FY2002.

Rooke explained to Reminder Publications the issue of whether or not Smith & Wesson fulfilled the previous agreement came as the city is considering a Special Tax Agreement (STA) that would give the company an exemption of about $600,000 and would be used to apply for $6 million in state assistance.

The STA was to come before the City Council on Jan. 10 for approval, but was taken off the agenda and was referred to the Council's finance and economic committees.

Rooke has asked both the Smith & Wesson legal department and the Economic Assistance Coordinating Council (EACC) for verification the company fulfilled its side of the agreement. As of this date, Rooke has not received any confirmation.

The city has no records of what the company did, he added.

The city councilor believes that if Smith & Wesson did not live up to the provisions, the city should pursue the collection of the property taxes that would have been owed to the city during that time.

Rooke has consulted with City Solicitor Edward Pikula about the matter of collections and said Pikula believes the city could not ask for those taxes. Rooke said the opposite opinion is expressed on the EACC Web site.

In 1995, Mayor Robert Markel agreed to a TIF that would obligate the company to take the following measures:

• Smith & Wesson shall employ 1,125 workers and shall hire an additional 13 workers by December 31, 1997.

• The company agrees to operate a business and maintain its work force at the level described as long as the TIF plan is in place.

• The company shall provide the city with an annual report no later than July 31 for each year ended June 30 of the agreement. That report would include the following: employment levels at the property and within the company; number of Springfield residents employed at the property (Roosevelt Avenue and Guion Street) at the end of the reporting period; utilization of local contractors for construction and renovation during the year; and summary for the company's financial contribution to the city including property taxes, vehicle excise taxes, water and sewer fees.

Rooke said no one has been able to give him copies of the annual reports cited as a requirement in the TIF agreement.

In exchange, the city exempted certain properties taxes 100 percent for FY98; 75 percent for FY99; 50 percent FY00; 25 percent for FY01 and 10 percent for FY02.

Rooke, who described himself as a "pro business councilor," said he supports Smith & Wesson, one of the city's best-known businesses. The motivation for his action, he explained, is the ordinance he helped draft that states that any unpaid taxes will prevent any business from being awarded any licenses, permits and agreements from the city.



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