PEDA, Pittsfield Reach Lease Agreement With Innovation Center
 A rendering of what the Berkshire Innovation Center will look like from the south. |
The City Council will be asked on Tuesday to approve a 20-year tax break for the non-profit and provide bridge financing to start construction as well as the lease.
The lease is twofold: the city's agreement with the Pittsfield Economic Development Authority for the parcel to build the new building and then, in 2018, the ownership of the building will be transferred to the non-profit Berkshire Innovation Center Inc.
"PEDA owns the land, the William Stanley Business Park, and they are conveying about a one-acre parcel to the city. The city is going to build the BIC facility with the money received from Mass Life Sciences Center. Once they reimburse us, once we get all of our grant money, we're going to transfer ownership of the building to the BIC. They are a 501(c)3 nonprofit. Any and all costs for operating and maintaining the building with be BIC Incorporated's responsibility," Director of Community Development Douglas Clark said on Friday.
The city is receiving a $9.75 million grant from the Massachusetts Life Sciences Center with payments extending through 2018. The City Council is being asked to allow the administration to borrow $7 million for the construction, which is expected to begin this summer.
"The grant from the state is coming over several years. Bridge financing will allow us to get started right away," Mayor Daniel Bianchi said.
The mayor said the city would issue short-term GANs — grant anticipated notes — to borrow the money for construction. As the grant payments come in, the notes would be paid off. Once they are and all of the money from Massachusetts Life Sciences Center is received, the entire building will be transferred to Berkshire Innovation Center Inc. At that point, all of the liability for capital, maintenance, and operations will be that organization's responsibility.
Councilor at Large Barry Clairmont had previously objected to the city being responsible for capital improvements and the lease was changed to place that burden on the BIC organization.
"The concerns that have been raised at various council meetings have been taken into consideration and addressed," Bianchi said.
About $2 million of the $9.75 million grant is to purchase equipment, which the BIC board will be choosing. While Berkshire Innovation Center Inc. as a non-profit would be free from some taxes, the administration wanted to make sure the equipment and the building were 100 percent tax free. The 20-year tax increment financing agreement being proposed will cover both the building and the equipment and excuse 100 percent of all taxes owed.
"At the core, we are trying to expand economic opportunity and jobs so we don't want to tax that effort. It just doesn't make sense," Clark said.
Clark called the Berkshire Innovation Center an organization that is executing the city's economic development plan. Every report and study Clark inherited when he was hired by the city showed that the city "needs to play to its strengths." The BIC does exactly that, he said.
"We have a legacy of manufacturing from the GE days. We still have some great companies, we have a couple big ones like SABIC, which was GE Plastics, and General Dynamics. We also have some small and medium-sized businesses that were spinoffs from GE that are involved in plastics," Clark said. "That is one of our strengths. The question is: How do you compete in today's global economy? The thought that these companies can do it on their own just isn't true anymore."
The BIC provides a research facility that the companies lack. In places like Chicago or Cambridge, companies are surrounded by colleges and universities that specialize in research. General Electric operated its own research and development department but companies in existence now in Pittsfield often can't afford it.
"The whole focus with the BIC for me is to create a facility that is really going to expand jobs. That is the key: expanding jobs in the Berkshires," Bianchi said. "The best way to do that is by growing jobs with companies that are already established, that already have links to the life sciences industry."
Clark said the building is the "intellectual infrastructure" businesses need. Just like companies need utilities and internet, they need access to high-end technology and brain power, he said.
"In today's economy this is as important as having a road to get your product to market," Clark said. "Without that support, we risk losing all of those jobs and companies to somewhere else."
The mayor specifically cited companies in the plastics industry that operate in Berkshire County. The companies make products for medical devices and need experts on new types of compounds and polymer characteristics to help find that next product or innovation. University of Massachusetts at Lowell if part of the Berkshire Innovation Center and will provide that to local companies.
"We have companies that are involved with life sciences manufacturing equipment. I mean very small refined pieces of equipment that could be something like sutures or something implemented in an operating setting. But, they manufacture implements, most of it with plastic and they are doing it here in Pittsfield. They are doing it without the advantage of research institutions helping with techniques, processes, helping with an understanding of complex polymers," Bianchi said.
For nanotechnology companies, educational organizations like the State University of New York Polytechnic Institute's Colleges of Nanoscale Science and Engineering are on board.
 The BIC when viewed from the east. |
Companies and educational institutions will pay dues to Berkshire Innovation Center Inc., which will manage the operations of the new facility. So far, 11 companies are part of the organization and nine educational organizations.
"We're putting together the pieces of an organization that I think will be very powerful," Bianchi said.
Meanwhile, the city is seek an additional $5 million through a U.S. Economic Development grant program to not only boost the BIC but the rest of the property as well.
The grant would help the following construction projects: additional site work like driveways, parking lot lights, retaining walls, landscaping; a water line extension on Woodlawn Avenue; a traffic signal at Woodlawn Avenue and East Street; extend fiber optic cable from Lyman Street through the property; installation of a photovoltaic array; and purchase of additional manufacturing equipment.
"A portion of it is to help provide additional funds for the Berkshire Innovation Center and another portion is to help the rest of William Stanley Business park," Clark said.
Regarding broadband, the hope is that the U.S. EDA will provide the funding to make the Berkshire Innovation Center a "community anchor location." The Massachusetts Broadband Initiative connected the "middle mile" of fiber optic broadband Internet to town halls and schools. That high-speed Internet can now connect outward to the "last mile."
Clark says by making the BIC an anchor, companies looking to develop at the William Stanley Business Park or nearby have an option to connect to a faster and more inexpensive Internet option than currently available there.
"The middle mile would extend to the Berkshire Innovation Center and PEDA could provide that access to the BIC and other companies," Clark said.
Not only do officials see the center as a place for local companies to grow but also a way to attract new businesses to the area and link the advanced manufacturing industry in the Albany, N.Y., area to Massachusetts.
"Berkshire County and Western Massachusetts is going to be a reach bridge between the Albany area and Springfield area. But, we'll also be in a position to be very valuable to the life science capital that is Massachusetts," Bianchi said.
Adding to the ability of companies to expand, the city and the BIC have partnerships with Berkshire Community College to help develop curriculum and hire staff to provide the workforce needed to take a new product to market. From the new Taconic High School with a stronger focus on vocational to Berkshire Community College's training and courses to the four-year Massachusetts College of Liberal Arts, the mayor envisions a new pipeline of employees of all levels will be created to keep the younger generation in town.
"Now you need somebody who is hands on and can actually operate 3D printers. That's why BCC received a grant they received — a half million dollars — because of the Berkshire Innovation Center and the model created for the innovation center," Bianchi said. "Now we have a very strong partner with great capabilities in Berkshire Community College and MCLA, who has a $40 million science center."
Exposing children at the middle school level to sciences and math, then to Taconic and then to work, BCC or MCLA is an "inexpensive path for the middle class," the mayor said.
"If we don't make these strategic investments, our tax base will continue to erode and nobody is going to help us," Bianchi said. "Part of the bottom line for the community is to expand our tax base. How do you do that? By creating jobs."
The construction is expected to start this summer and take one year. Berkshire Innovation Center Inc. has already been formed and is consulting on the building's needs.
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Tags: berkshire innovation center, business park, life sciences, PEDA, tax incentive,
