WISCASSET
Selectmen voted 5-0 Tuesday to accept amendments to a tax increment financing deal with Mölnlycke Health Care — a move company officials said could help them create up to 30 new permanent full-time jobs.
The TIF now goes to a public hearing and vote at a special town meeting — both Jan. 14, 2014.
The Swedish maker of wound care products currently employs 70 at its Rynel plant on Twin Rivers Drive.
James Detert, Mölnlycke’s development director for the Americas, said the amended TIF would be used to refurbish the Rynel plant to bring it “up to standard” with its sister plant in Brunswick.
Mölnlycke also is deciding whether to relocate its Brennan Medical operations to Wiscasset. Brennan manufactures temporary coverings for burn victims and was acquired by Mölnlycke in early 2012.
Detert said Mölnlycke’s expansion would nearly double the size of the existing Wiscasset footprint, adding 3,200 square feet at a cost of $5.5 million to $7 million.
The goal, Detert said, is for Mölnlycke to expand its research and development base in Maine, and for its Rynel plant to produce finished, packaged product in Wiscasset. To achieve this, existing facilities have to meet certain regulatory standards.
Mölnlycke opened a new $47-million facility earlier this year at 192 Admiral Fitch Ave. in the Brunswick Landing development. Currently staffed with more than 45 employees, Detert described it as the most advanced wound care manufacturing facility in the world.
Wiscasset Town Planner Misty Parker presented a series of slides Tuesday and explained to selectmen the costs of not negotiating a TIF — which is essentially a rebate of future municipal property taxes in exchange for business development.
She said tax revenue from a Mölnlycke expansion would increase the municipality’s total assessed value, which increases county tax rates and decreases education and revenue sharing.
Parker showed a slide illustrating that, without the TIF, 59 percent of every new tax dollar from the expansion would be lost, with 7 percent going toward county taxes, 4 percent to state revenue sharing and 48 percent to education aid.
Parker said that with a TIF, 100 percent of new assessed value is sheltered and reserved for bond payments, economic development and credit enhancement to the business.
Mölnlycke currently is in year nine of a 20-year TIF agreement with Wiscasset. It distributes captured revenues 35 percent toward credit enhancement to the business, 40 percent toward bond payments for infrastructure and 25 percent for economic development to the town.
The amended TIF would add 10 years to the lifespan of the current agreement, and would alter the allocations of revenues after the first 20 years, allotting 20 percent toward credit enhancement to the business and 80 percent for town use, from 2025 to the end of its term.
Regarding the new construction, the TIF term would extend 30 years, allocating 50 percent to credit enhancement to the business and 50 percent for town uses for the duration.
The Rynel plant is currently under lease to Mölnlycke. However, the company is pursuing purchasing the property, so the amended TIF would disburse funds directly to Mölnlycke, rather than the leasor, for the expansion.
“For Wiscasset, there are only pros” and no cons to the proposed agreement, Wiscasset Town Manager Laurie Smith said.
She spoke glowingly of Mölnlycke, describing it as the “poster child” for a business the town wants.
“They have a facility that is already here, they have the infrastructure; it would provide additional jobs and revenue,” Smith said.
Wiscasset had previously taken out a bond for infrastructure at the plant, she said, adding that revenue to help “expire” that bond would be a positive factor for Wiscasset.
The relocation of Brennan Medical to Wiscasset would bring an additional 10 to 30 jobs to Wiscasset in the first three to five years, Smith said.
Previous discussions mentioned moving Brennan Medical to Brunswick, but Brunswick Town Manager Gary Brown said Mölnlycke never approached Brunswick with an official request for a TIF.
“I had a one-time conversation with Jim Detert and there has been zero followup,” Brown said. “My understanding is that they’ve made a decision to move to Wiscasset.”
Detert told The Wiscasset Newspaper that Mölnlycke’s board has approved the addon to the Rynel plant if:
— it can buy the building it now leases;
— it can design the expansion at a cost that works for the company; and
— that a proposed tax incentive deal with the town goes through.
“So the (tax deal) is really the remaining piece,” he said.
Based in Gothenburg, Sweden, Mölnlycke manufactures surgical and wound-care products. Originally founded in 1849 as a textile manufacturer, Mölnlycke is now active internationally and employees more than 7,000 people worldwide.
The special town meeting and hearing is 7 p.m. Jan. 14, 2014, in the Wiscasset Community Center gymnasium.
rgargiulo@timesrecord.com
Comments are not available on this story.
Send questions/comments to the editors.
