Starboard / Rudman Winchell Economic Development Team Assist with New Molnlycke TIF Project

By Rudman Winchell Attorney

On Tuesday, January 14th, the voters of the Town of Wiscasset, at a special town meeting, overwhelmingly approved a new tax
increment financing (TIF) deal for Molnlycke Health Care U.S., LLC.
Consultant Noreen Norton of Starboard Leadership Consulting, LLC and attorney
Erik Stumpfel of Rudman Winchell were instrumental in negotiating the agreement
ultimately approved by Wiscasset’s voters.

Molnlycke is a leading international manufacturer of
specialized wound care products (dressings), typically used in hospitals’ care
of severe trauma and burn victims. In 2012, Noreen and Erik helped
Molnlycke win approval of a TIF deal with the Town of Brunswick for
construction of a new $51 million facility (building and equipment) to produce
the company’s finished wound care products in Maine.

The Wiscasset TIF deal approved on January 14th amends an existing TIF district for Molnlycke’s production facility in that
community. The Wiscasset facility currently produces the raw material now
used by the Brunswick facility to produce the company’s finished wound care
products. A TIF district and credit enhancement agreement approved by the
Town ten years ago grants a 35% reimbursement of property taxes paid on the
existing Wiscasset facility, for the twenty year term of that TIF.

The TIF amendment approved on January 14th extends the existing TIF district from 20 to 30 years; provides Molnlycke with
a 20% reimbursement of property taxes on the existing facility during the ten
year extension period; and grants Molnlycke a 50% reimbursement of property
taxes to be paid on a planned expansion of the Wiscasset facility.

Molnlycke’s planned expansion will add 32,000 square feet of
floor space to the existing 40,000 square foot Wiscasset facility, at an
estimated cost of approximately $6 million. The additional space will
enable Molnlycke to enlarge its research and development facilities and staff
in Wiscasset; expand production of raw materials for the Brunswick facility;
and add a new line of wound care products to its manufacturing
operations. In turn, these changes will allow Molnlycke to add an
estimated ten to thirty new jobs at the Wiscasset facility over the next three
to five years.

Over the remaining twenty year term of the extended TIF
district, the Town of Wiscasset will retain $1.1 million out of an estimated
$1.9 million property taxes to be paid by the facility, for Town economic
development purposes. The TIF district designation and extension will
also enable the Town to avoid another $1.1 million in adverse State funding
formula and county tax impacts, that would occur if the new project value was
not “sheltered” within the TIF district. The Town will also receive an
estimated $500,000 State reimbursements on account of new personal property to
be located in Wiscasset as part of the project, that is exempt from taxation
under Maine’s Business Equipment Tax Exemption (“BETE”) statute.

Direct foreign investment to expand high tech manufacturing
and research facilities here in Maine, while adding new, well-paid jobs.
It doesn’t get much better than that.

Disclaimer


These materials have been prepared by Rudman Winchell for educational purposes only. They should not be considered legal advice. The transmission of this information to you is not intended to create a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel. You should not send any confidential or private information to Rudman Winchell until a formal attorney-client relationship has been established, in writing.