Tax Break For Worcester Unum Development At Risk, City Says

WORCESTER, MA — Unum's tax-increment financing (TIF) deal with the city of Worcester may be in jeopardy following the company's move to a mostly remote workforce over the summer.

City Manager Edward Augustus has notified the City Council that officials will likely take "corrective action" due to the company's staffing levels falling below a threshold in the TIF agreement. In July, Unum confirmed that 400 employees at its CitySquare office would start working fully remote.

Unum was granted a TIF in 2009 that allows the company to save about $1.35 million over 15 years. But to keep the tax break, the company has to have 300 people working in the CitySquare building.

Under a corrective action plan, Unum would have to find one or more tenants to sublet about 80,000 square-feet in the building to bring workers back. The company has hired Cushman & Wakefield to market the space, and to study overall office needs in the downtown area. That report is expected back in January.

"The Executive Office of Economic Development (EOED) does recognize the critical role that Unum played as a catalyst for the rest of the CitySquare development. However, at the same time, the EOED and City Administration holds companies and developers accountable for the commitments made when TIF Agreements are provided to support a project," Chief Development Officer Paul Dunn wrote in a letter to Augustus about the corrective action plan.

Worcester has used TIFs for almost all the recent major developments in the city, including the residential and commercial developments around Polar Park, new downtown hotels and a new Table Talk headquarters along Gardner Street.

In general, TIFs allow property owners to pay reduced property taxes for a set period in exchange for the long-term economic boost of a new development.