November 6, 2018

S. Windsor council approves 7-year tax break totaling $2.4 million for proposed Coca-Cola facility

PHOTO | Contributed
PHOTO | Contributed
The Coca-Cola Bottling Company said it plans to invest $64.6 million in Connecticut.

The South Windsor Town Council on Monday unanimously approved a seven-year tax abatement totaling $2.4 million as an incentive for the Coca-Cola Bottling Co. of Northern New England to build a multimillion-dollar office and distribution facility on Ellington Road.

The council approved a 70 percent reduction of the facility's real property assessment for a period of seven years, according to the resolution, which was voted on during a council meeting at Town Hall.

Coca-Cola is proposing to build a $42.4 million office and distribution facility at 325 and 359 Ellington Road. The estimated tax benefit would amount to a $341,479 reduction annually, or roughly $2.4 million over the life of the agreement.

In spite of the tax abatement, Town Manager Matthew Galligan said the facility is expected to generate $4.6 million in new tax revenue over 10 years. Without the Coca-Cola facility, the town would have received $7,000 a year in property taxes for those parcels of land, which are cornfields, or $70,000 over 10 years.

The facility will consist of a 219,000-square-foot office and warehouse space and another 38,000-square-foot warehouse on 25 acres.

For the first year alone, increases in property values combined with personal property taxes will generate about $550,000 in new taxes, Galligan said.

Galligan's estimated 10-year tax revenue does not include items such as the company's trucks and taxable furniture and fixtures, he said, adding that he doesn't know the quantity of those items yet.

The Coca-Cola Bottling Co. of Northern New England — which is independent of the Atlanta-based soft drink-maker — is shifting production work from its plant in Needham, Massachusetts, to the East Hartford area and a bottling center in Londonderry, New Hampshire. The transition includes fully moving its East Hartford distribution operations to the new South Windsor facility.

The facility at 471 Main St. in East Hartford employs more than 400 people. It was the town's third-biggest taxpayer on the 2017 grand list, with property valued at $50.45 million.

At the East Hartford facility, Coca-Cola plans to spend $22 million to expand manufacturing so the company can create six new products, Galligan said, which would also create 25 new jobs there.

According to Nick Martin, Coca-Cola's director of public affairs, the new production line is expected to become operational in early 2020.

East Hartford Town Council Chairman Richard Kehoe said that having a larger manufacturing facility in East Hartford wouldn't increase taxes very dramatically.

"We will lose the property tax revenue on the trucks because they'll be in South Windsor, but gain tax revenue on additional manufacturing equipment," Kehoe said.

East Hartford and South Windsor have been working together to save and create jobs for the area, Galligan said.

There's an accelerated timetable on breaking ground at the South Windsor site, said officials from Scannell Properties, the Indiana-based real estate developer handling the project. Officials said they hope to break ground within the next 16 days, just before winter.

"This will be another opportunity for regional economic development associated with job growth," said Mayor M. Saud Anwar. "Communities need to remain open to partnerships for mutual and long-term benefits for towns, region, and state."

This story has been modified for the web

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