City Tax Breaks Encourage Small Business Growth
A financial institution with roots in Springfield, Massachusetts that go back almost a century is planning to expand its headquarters in the downtown area. Springfield economic development officials say they are concentrating on this type of small business growth as the fate of a casino that promises to bring thousands of jobs to the city is in the hands of state voters.
Freedom Credit Union has announced a $2.2 million expansion of its Main Street headquarters, a project that when completed will bring more than 50 jobs to downtown Springfield.
The credit union purchased a former medical offices building adjacent to its headquarters for $1.3 million and plans to spend $850,000 to renovate the 12,000- square foot building. The company plans to relocate 26 Springfield employees and 16 people who work in Agawam, and hire 13 new employees to staff the new facility, according to Freedom Credit CEO Barry Crosby.
" Because of growth we had to seek other space. We are committed to the city of Springfield."
The Springfield City Council tonight is expected to approve an agreement with Freedom Credit to reduce the property taxes on the new building in exchange for the job creation. The tax break will save the company $90,000 on its property tax bill over the next five years. After that the city will collect about $70,000 annually for property taxes on the new building.
Springfield Chief Development Officer Kevin Kennedy said this type of tax increment financing has helped spur job growth.
"We are thrilled with the idea of this kind of incremental growth in the downtown. Anytime anybody wants to bring 25 jobs here, obviously if we could get ten companies to do it that would be a pretty good critical mass."
Kennedy said projects that bring thousands, or even hundreds of jobs to Springfield have been rare over the last decade. Liberty Mutual Insurance Company opened a call center in the city five years ago that created 300 jobs. MGM is proposing a casino that would have 3,000 jobs. But that project will not happen if voters on Election Day decide to repeal the state’s casino gambling law.
" Our economy is built on small businesses," said Kennedy.
A decade ago, Freedom Credit had one office and 38 employees. Now there are nine branches and two operations centers with 140 employees. Freedom Credit was chartered in 1922 and its headquarters has been on Main Street since 1978.
Springfield Mayor Domenic Sarno, at last week’s announcement of the expansion, called Freedom Credit “a good corporate citizen.”
" I want to thank the board of directors for their continued belief and investment in the city of Springfield."
Sarno praised Freedom Credit’s plan to open a branch this fall at the city’s Putnam Vocational Technical High School. Nine high school students will be employed there to train in the field of financial services.