Smith & Wesson get city, state tax incentives

Date: 2/15/2011

Feb. 16, 2011

By G. Michael Dobbs

Managing Editor

SPRINGFIELD — Despite concerns raised about a previous tax agreement with gun-making legend Smith & Wesson, Mayor Domenic Sarno said there is "no controversy" over a new deal that will give the manufacturer $600,000 in local tax incentives over five years and awarded them $6 million in investment tax credits.

Sarno made his comments to Reminder Publications after a press event formally announcing the new arrangement Feb. 10 at the manufacturer's Roosevelt Avenue facility.

Smith & Wesson has agreed to create 225 new jobs at the Springfield plant, retain 882 existing jobs and support $62.9 in private investment from the company.

Lt. Gov. Timothy Murray explained the Smith & Wesson deal was one of 21 such agreements made in 2010 to create and retain jobs in the Commonwealth.

"We are aware in our administration that manufacturing in the Pioneer Valley continues to be an important employer," Murray said.

He explained the jobs created and retained under this agreement are not the only ones that will be affected by it. Murray said the manufacturing at Smith & Wesson should positively affect jobs in the companies along the Smith & Wesson supply chain.

Sarno said the 225 new jobs will be "life-changing" and "good-paying." He added Smith & Wesson would be coordinating with the "Buy Springfield" home buying program to encourage these new employees to consider making a home in the city.

City Councilor Tim Rooke had raised concerns about the new arrangement. Smith & Wesson had previous tax increment financing (TIF) that was in place during the Albano Administration. Rooke had tried to find out if Smith & Wesson had kept records detailing their compliance with the terms of the agreement that included an increase of employment.

Rooke's point was if the company hadn't kept their end of the bargain, it should be compelled to pay the taxes it would have owed from that period. Under city ordinance, companies must be current in property tax payments before they can receive licenses or permits.

City Solicitor Edward Pikula told Rooke state law stipulates the remedy in the case of a company reneging on a tax agreement is to ask the state to revoke the agreement rather than seek the back taxes.

In a letter dated Jan. 26 to City Council President Jose Tosado, Annamarie Kersten, director of the Economic Assistance Coordinating Council (EACC) — the state agency that monitors TIFs — wrote in reply to Rooke's questions, "In the case of this specific TIF in February, 1999, Mayor Michael Albano requested, on behalf of the city, that the EACC take no action against Smith & Wesson. The mayor acknowledged that although the company had not met its job creation numbers, Smith & Wesson was a major employer in Springfield with a long-standing history of commitment to the community and the city wanted to keep the TIF in place. The EACC honored the city's wishes and the EACC took no action against the company."

Sarno said the current arrangement has provisions that protect the city.