Tax Increment Financing (TIF)
Case Study

Leominster, Massachusetts
Star Container Corporation

The City of Leominster entered into a TIF Agreement with Star Container Corporation. To encourage Star Container's expansion plans for its packaging facility. Star Container had a long established, successful manufacturing presence in Leominster. The expansion consisted of an additional 54,000 square feet of floor area and the purchase of additional corrugated box manufacturing equipment. The TIF Agreement had an eight year term, and provided for a front loaded sliding scale of exemptions from taxation of the tax increment as follows;

Aerial view of the Star Container Corporation complex.Year 1  100%  of the increment
Year 2   90%   of the increment
Year 3   75%   of the increment
Year 4   60%   of the increment
Year 5   45%   of the increment
Year 6   30%   of the increment
Year 7   15%   of the increment
Year 8    0%    of the increment

Star Container invested approximately 6.2 million dollars into the facility and equipment. The Agreement provided for the creation of 25 new full time manufacturing and managerial jobs. 150 existing jobs were retained by ensuring the facility stayed at the existing site. At the end of the TIF period, the City will gain approximately $23,000.00 annually in additional property taxes. Star Container is located in the state designated Economic Target Area of Northern Worcester County. Therefore, Star Container can seek other state economic incentives in addition to the TIF Agreement with the City.

Leominster uses TIF agreements only for manufacturing businesses. This is compatible with the needs of the city, which historically has had a manufacturing base in the plastics industry. Star Container distributes its packaging to many local and regional firms. The focus on manufacturing has the effect of creating jobs, which pay higher than the minimum wage, bringing a greater economic benefit to the area. The shorter term TIF is also geared towards manufacturing, and is tied to the equipment life.