First in an occasional series on Andover's heavy hitters in business.
When it comes to the taxes it pays, Wyeth has Andover's community, youth and elder services covered.
The Burtt Road pharmaceutical giant paid $1.8 million in real estate and personal property taxes to the town of Andover last year, or enough to cover the entire Community Services, Andover Youth Services and Elder Services departmental budgets. It cost $1.7 million to operate the three departments in fiscal 2008.
In all, Andover's top 10 commercial and industrial businesses paid close to $11 million in taxes last fiscal year — that's nearly 12 percent of the town's entire tax levy. Because some of the town's budget is paid by state and federal aid and other fees, the top 10 businesses cover 8 percent of the overall town operating budget.
When Philips Electronics North America — fourth on the top-ten list of tax contributors — announced last week that it was moving its New York City headquarters to Minuteman Road, where it already headquarters its Healthcare division, attention again focused on the amount of big business tucked away near the highways running through Andover.
Andover is "at the top of the heap" in the Merrimack Valley when it comes to the strength of its commercial and industrial tax base, said David Tibbetts, general counsel with the Merrimack Valley Economic Development Council.
"Cities and towns around the valley and across the state would drool at the prospect of having a third of the companies on that list," said Tibbetts. "It enables Andover to have a first-class school system and first-class town services without having an off-the-charts residential tax rate."
Big-name companies like Wyeth, Raytheon, Philips and Eisai each contributed more than 1 percent of the total taxes paid. Gillette and Putnam Investments round out the well-known companies on the top-10 list. Two real estate trusts and the owners of the Brickstone Square and Minuteman Road office parks complete the list.
Tibbetts said having big-name companies already in operation in town makes it easier to attract new commercial and industrial growth. There are still approximately 259 such developable acres remaining in town, according to its Web site.
"Success breeds success," said Tibbetts. "That speaks very loudly to CEOs when they're making decisions."
While town coffers are helped by Andover's large corporations, some residents have expressed concern over the years about the negative effects of business expansion on town roads. Andover residents have fought expansion of Ballardvale businesses because of the number of their employees already zooming down their small side streets looking for short cuts. Some people worry a proposed new ramp off Interstate 93 into southern Andover will not only bring more business, but more traffic headaches.
Officials associated with the I-93 interchange effort repeatedly have maintained the new ramp will lessen traffic on side streets. And almost everyone seems interested in the increased tax revenue of new business at a time when town fees and taxes keep rising.
Andover is fortunate to have a commercial and industrial tax base with such breadth and depth, according to Town Manager Buzz Stapczynski, who credited the town's geographical location and zoning and permitting practices.
Stapczynski said the formula to attract businesses to "campus-like settings" near highway interchanges was first developed in the 1950s and continued in the decades to come with significant success.
"It has paid off in big dividends for the communities who have done that, including Andover," said Stapczynski. "It's due in large part to the foresight of previous boards of selectmen, planning boards, Town Meeting members, who voted to rezone land along I-93 and 495 to industrial," said Stapczynski.
Andover has the work force, highway access and ancillary services to attract large companies, according to Joe Bevilacqua, president and CEO of the Merrimack Valley Chamber of Commerce.
Bevilacqua agreed with Tibbetts that the town was at the fore of the Merrimack Valley's business.
"It has to be one of the leaders, without a doubt, in terms of big companies," said Bevilacqua. "In all of Massachusetts, for that matter."
Bevilacqua said announcements like the one Philips officials made July 22 send clear messages to the international business community that the Merrimack Valley region is a desirable location.
"It's just a tremendous statement," said Bevilacqua. "These are literally world-class, internationally-known companies."
Bevilacqua said the employees of large companies are also often residents who pay property taxes and spend their income in town.
A strong commercial and industrial tax base takes the pressure off residents, he said.
"If you don't have it, then your (residential) property taxes would obviously be much higher," said Bevilacqua.
Andover's tax rate for commercial and industrial businesses is $19.13 for every $1,000 their property is worth, compared to $11.69 per $1,000 of valuation for residents. Businesses are also taxed on the personal property they own.
"For the most part, personal property is tax on machinery and equipment, furniture, fixtures, stock in trade," said Andover Assessor David Billard.
Nearly 70 percent of Andover's $134 million budget last year was paid for through property taxes. Approximately one-third of the Andover property taxes collected each year come from businesses, said Stapczynski.
Andover's Top 10 Commercial/Industrial Tax Payers
1) Name: Wyeth
Business type: pharmaceuticals
Property type: industrial
Total tax assessed: $1,806,900
Percent of total levy: 1.92 percent
2) Name: Transwestern Brickstone Square LLC
Business type: real estate
Property type: commercial
Total tax assessed: $1,451,400
Percent of total levy: 1.54 percent
3) Name: Raytheon
Business type: defense contractor
Property type: industrial/residential
Total tax assessed: $1,234,400
Percent of total levy: 1.31 percent
4) Name: Philips Electronics North America Corp.
Business type: medical devices and electronics
Property type: Industrial
Total tax assessed: $1,096,200
Percent of total levy: 1.17 percent
5) Name: CA Investment Trust
Business Type: real estate, including Andover Country Club
Property type: residential/commercial
Total tax assessed: $1,034,200
Percent of total levy: 1.09 percent
6) Name: RREEF America REIT III Corp. ZI
Business type: real estate
Property type: commercial/industrial
Total tax assessed: $1,001,000
Percent of total levy: 1.06 percent
7) Name: Eisai Research Institute
Business type: pharmaceuticals
Property type: commercial/industrial
Total tax assessed: $960,300
Percent of total levy: 1.02 percent
8) Name: One Hundred Minuteman LLC
Business type: real estate
Property type: industrial
Total tax assessed: $889,200
Percent of total levy: 0.95 percent
9) Name: Gillette Company (Proctor & Gamble)
Business type: consumer products
Property type: industrial
Total tax assessed: $834,800
Percent of total levy: 0.89 percent
10) Name: Lincoln Andover LLC (Putnam Investments)
Business type: financial management
Property type: commercial
Total tax assessed: $686,900
Percent of total levy: 0.73 percent
Top ten totals
Total tax assessed: $10,995,300
Percent of total levy: 11.69 percent
(all numbers from fiscal year 2008)
