"Aggressive" Tax Plan for Quest Diagnostics
An "aggressive" tax agreement has been recommended by the Finance Committee to the City Council for the first company to sign on to the former HP location now known as "Forest Park."
Early adopters take risks for potential gains. In the case of Quest Diagnostics, they are the first business to sign on to the mixed use development of "Forest Park" where the mixed use portion has not been approved by city officials. However, the move has garnered them an "aggressive" tax program that other companies to join the development will not get.
"It's not going to be to this extent, or this aggressive," said Mayor Arthur Vigeant of any future Tax Incriment Finance (TIF) agreements for businesses that sign on to occupy the property.
There is still 550,000 square feet of office park to inhabit at the location with Quest having taken 200,000. Developers have said the final build out could see 1 million square feet of commerical footage. Quest will be the first business to take up residence at the site, within 18 to 24 months according to Tim Anderson, managing director of Quest Diagnostics.
"Our intention is truly to build a state of the art laboratory," he said explaining that Quest will be putting $78 million into interior renovations alone.
It is taxes on those improvements that the agreement addresses. The adjusted base valuation will remain fully taxable, according to the agreement. Only the increased value created by improvements will be the amount eligible for exemption from taxation.
"The agreement is only on the additional value," said Mayor Vigeant.
The 15 year agreement will be structured with exemptions of 100%, 100%, 90%, 90%, 80%, 80%, 75%, 70%, 70%, 60%, 60%, 60%, 50%, 50% and 50% for each year respectively.
The buildings on the site are currently valued at $28 million and bring in $800,000 in taxes a year, said officials.
The Finance Committee members' questions and concerns focused on the details of the business as well as the details of the document, which was based on previous TIF agreements and had a few points that needed to be modified before the final draft.
The committee voted unanymously to recommend the TIF agreement on Tuesday. The major concerns were raised about traffic from the business — they will be using regular passenger cars to transport blood samples — and the extent of future TIF agreements in the development.
"The next folks in aren't going to get as good a deal, perhaps," said Councilor Delano.