PLYMOUTH - The Plymouth Common Council voted a “no fault” tax abatement to Zentis Food Solutions Monday night.
In the Council’s previous session earlier this month Kevin Chestnut - tax advisor for the North American branch of the German company - came before the board to ask for the extension of a tax abatement offered the company when it first considered where it was going to place its base of North American operations. In 2006, the Council voted Zentis a two-year abatement when the company had requested a five-year abatement for the project.
Chestnut called into question the true intention of the Council at the time of that abatement, suggesting that perhaps they intended to give the company a full five-year abatement for the project instead of the two. He also said that - in any case - had he been a consultant for the company at that time he would have come back before the Council every two years until the project’s completion to request another two year abatement.
At that meeting City Attorney Sean Surrissi told the Council that state statute allowed them to correct the mistake - if indeed they felt that was the case - or extend the abatement for the full five years requested.
Estimates at the time of the abatement by Zentis were that the project would be completed for a total of $34 million. To date the actual completion of the project added $38 million in personal property value and has provided 100 more jobs to the community than the original estimate. The company is also currently hiring.
The company did not request that the city repay the increased taxes paid in the three year period but merely for the city to award the abatement for the next three years on the investment of $38 million.
Plymouth Clerk-Tresurer Toni Hutchings pointed out to the Council that it was unlikely that the Council in 2006 had actually made a mistake in not awarding the full five years asked for by the company since it was common practice at that time to award the two years because of the effect on the tax rate. She also stated that she could understand that a company new to the United States would be confused by a different nation’s tax laws.
In the end the Council voted to award the company the additional three year abatement on the $38 million investment, stipulating that they could not determine if that were the original intention of the Council in 2006.
The abatement will apply to the company in the coming tax year.