When it’s finished, sometime later this year or in early 2014, Schneider Electric’s new research and development center at 800 Federal St. will be like a giant grocery store of energy-saving technology.
The interior of the 230,000-square-foot, $20 million building will be filled with products made by the global energy technology giant, some of which aren’t even sold on the open market yet, helping the building consume less electricity while showing potential customers how well the products work.
“It will be highly energy efficient,” said Matt Volpe, regional facility manager for Schneider, during a recent tour of the construction site. “This will be an R&D lab for us and a showcase for Schneider products.”
The construction of Schneider Electric’s new facility at the Andover location, off River Road near the Massachusetts School of Law, is the culmination of months of work, both internally — within the company — and externally — negotiating with local and state officials over tax breaks and other issues.
But in the end, the fight was worth it, said Barry Coflan, senior vice president of Buildings Business for Schneider Electric.
“This is a big company,” he said, noting that Schneider has 140,000 employees worldwide, including 850 whop will be ultimately be based in Andover. “They could have said, `We are moving you overseas.’”
Coflan’s team, now based in North Andover and with units in Billerica, Andover and Rhode Island, made a convincing argument to corporate colleagues in Paris, France, that the best place for one of Schneider’s five worldwide research and development centers is none other than Andover.
“It’s a big deal for us, to be one of the top five R&D locations in the world,” he said. “Other groups within Schneider competed for this. We had to submit a business case to the parent company in France.”
Among the reasons the move to Andover was good for Schneider, he said, is its proximity to Boston and universities like MIT, where the company is recruiting heavily.
“There was discussion about moving to Rhode Island, maybe the Franklin area,” he said, which is about halfway between the Merrimack Valley and the company’s locations farther south.
But Andover won out, he said, because people coming from Cambridge would have a relatively easy, reverse commute.
“It was an internal analysis,” he said. “We were looking for where our employees are centered.”
Company officials also looked at the local economy, where there are good hotels and easy access to Interstates 93 and 495.
Finally, and the piece that may have made Andover the winner, was an attractive tax-increment financing plan, otherwise known as a TIF, that artificially reduces the property tax rate, saving the company thousands of dollars over the five years of the agreement.
“It factors into making the finances work when we get these incentives,” he said.
Another option was to expand into one of the company’s existing buildings on High Street in North Andover, which it now shares with the Converse shoe company. Converse is moving its operation to Boston in a couple years, which will free up space in the 1860s-era brick mill structure, which Schneider has invested heavily in over the years.
But that didn’t work, either, Coflan said.
“North Andover approached us, but it came down to trying to fit everybody on the site,” he said. “It’s been a good relationship with North Andover for many years, but it was just logistics and sizing of the facility.”
Poised for growth
Chad Reynolds of Leggat McCall Properties in Boston, the owner of the Andover property, said the project has been going well since it broke ground in January. The last roof beam was placed April 16. The 77,000-square-foot addition is being attached to an existing 160,000-square-foot structure that has been vacant for some time.
He called it an exciting project to work on.
“The stuff going into this building is leading-edge,” Reynolds said. “From a landlord perspective, we are happy to have this kind of innovation in our building.”
Volpe said the building will use “chilled beam design” for heating and cooling, a highly efficient way to regulate the temperature inside a structure. He said all the electrical management systems, LED lighting, data centers and other systems in the building will employ Schneider technology to reduce energy use.
Coflan said 40 percent of the energy of the world is consumed in commercial buildings and “we can save 20 to 30 percent in annual energy use” by taking advantage of Schneider products.
“We are in different markets, where there is a lot of new construction, like Malaysia and Indonesia,” he said. “Those economies are seeing explosive growth, the population is growing, the middle class is emerging, so our market can grow 30 to 40 percent a year. The systems we are designing are going into those markets.”
The R&D center in Andover will be home to engineers and others who have worked locally in the energy field for many years.
APC, or American Power Conversion, started in Billerica, and was bought out by Schneider. Andover Controls was founded in Brickstone, forming part of Coflan’s unit in North Andover. Modicon was also founded in Andover in Brickstone, becoming part of one of the groups that is moving back to Andover.
While the company has grown, it has kept its roots in Massachusetts, Coflan said.
“We have been here for decades,” he said. “By putting us all together in one site, we can incubate new ideas, be more efficient and the chances of growth are better.
“Making it stable in one place makes a lot more sense. We will be in a high-tech facility rather than being camped out in different buildings.”