Keurig Deal on Track

Burlington Town Administrator Robert Mercier told Patch in an interview yesterday that there has been progress in the negotiations with the Keurig, the company behind the K-Cup coffee makers, which is .

"I think things are progressing in a positive way," Mercier said. "We have exchanged proposals and Selectman Daniel DiTucci and I have visited their current headquarters. So far there is nothing in the proposal they submitted or in our response that I believe would be a deal-breaker. I’m very encouraged, but I don’t know, I don’t make the final decision. The people in Keurig and Green Mountain, the parent company, make the final decision."

, Keurig is looking to find a larger facility for its headquarters. Currently Keurig has a base of operations in Reading and offices in other New England states. Keurig is looking to close the office locations, including the Reading office, and move to a new location. Last month representatives from Keurig came to a Board of Selectmen meeting to discuss the possibility of re-locating to Burlington.

The options for Burlington are 63 South Avenue and 186 Middlesex Turnpike.

Mercier said this week that the discussions now are over a Tax Incremental Financing (TIF) agreement. He explained that a TIF agreement is a tax-alleviation incentive that a municipality can give to a business to sweeten a deal to have it locate in town.

The way a TIF agreement works, Mercier explained, is that it gives property-tax relief to a business on any added value it builds to a site. For example, he said, if a business moves into a site with a $200,000 tax levy, it will pay the full taxes that the site has been assessed. However, if the company builds an expansion or engages in renovations and increases the assessment, a TIF agreement can allow a discount on the taxes of the added value. For instance, if the company doubles the assessed levy, it could negotiate with the town to pay half the added tax levy. In this hypothetical case, the company after renovations/expansion would have a site with an assessed levy of $400,000 but would pay $300,000.

Mercier said the exact amount of the relief that may be granted to Keurig is the current focus of the negotiations. As such, he said, he is not yet in a position to release the detail of each side's proposals. 

Mercier said a TIF agreement can help attract a company to town, but that Burlington has not engaged in many such agreements. To date he said the only agreements the town has agreed to involved Oracle and Sun Microsystems.

"This is not onerous in my view," he said. "We don’t give away TIFs like candy like some communities do."

Mercier said Burlington is considering such an agreement with Keurig because the company would be a boon for Burlington. First, the relocation of the headquarters would mean that between 400 to 500 current, well-paid employees would be in town spending money in Burlington businesses.

"Having employees come in is good for local restaurants and businesses," he said. "A lot of the jobs pay between $60,000 and $80,000 so the employees have disposable money."

Keurig also plans to hire 400 to 500 new employees over the next four to five years. In the presentation with the board last month, Keurig said jobs will be advertised to qualified Burlington residents first if the company were to come to town.

Mercier said he expects the negotiations to be wrapped up within the next couple weeks, both because Keurig is on a 'fast track' to get this done and also because the state needs to approve any TIF agreements in the Commonwealth and the meeting on this potential agreement has been scheduled for June.

"It's a good size complex and a terrific name," Mercier said of Keurig. "The board is excited. This would be a good corporate name to have in Burlington. We’re going to work hard to make this all happen"