SOUTH PORTLAND — National Semiconductor had planned to invest another $100 million in its manufacturing facility off Western Avenue, expanding capacity by about 30 percent over the next five years, company officials told the City Council Monday night.

Those plans are uncertain now that the maker of analog semiconductors is being acquired by Texas Instruments.

The $6.5 billion deal, announced in April, is expected to close sometime this summer. Leaders at the South Portland site told councilors they still hope the investment plan materializes.

“We want to get this in front of them as soon as the deal closes,” Doug Wilson, vice president of operations at the South Portland facility, said about the upcoming transition in ownership.

Wilson believes Texas Instruments paid a higher than expected price for National because the Dallas-based company is confident that its sales team can boost sales of National’s product line.

“They paid as if we are going to grow,” Wilson said of the Texas Instruments purchase.

Councilors told Wilson and three other representatives of National that they hope Texas Instruments will invest in the South Portland location, and will maintain and possibly expand employment. National employs 550 workers at the plant and the company is the city’s second largest taxpayer, behind the owners of the Maine Mall.

Councilors agreed in the meantime to support a one-year extension of a local tax break that was granted in 1995 and is due to expire Thursday. The agreement returned about half of National’s property taxes on the manufacturing plant over that period – roughly $45 million – while the other half has gone into the city’s general fund.

“Our goal now is to continue this partnership,” Mayor Rosemarie DeAngelis said.

The hope is that next year, Texas Instruments will agree to a capital improvement schedule for the plant – at an average of at least $12 million in new investment per year – and the city would then enter into another long-term property tax break.

National received a 15-year tax increment financing, or TIF, deal from the city when it agreed to build a new manufacturing plant in the mid-1990s.

The tax bill for National’s plant was about $2.6 million for the fiscal year that ends this month. Half of that amount, about $1.3 million, went to the city’s general fund, and the other half went back to the company.

The terms will change slightly for the one-year extension of the TIF agreement, which face a formal council vote on July 6. National will get back 40 percent of the tax bill for the plant, and the city will get 60 percent.

 

Staff Writer Trevor Maxwell can be contacted at 791-6451 or at: tmaxwell@pressherald.com

 

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