SPRINGFIELD — Performance Food Group is planning to expand its Springfield operation with the construction of a new facility on its existing land.
During the Jan. 8 City Council meeting, Performance Food Group representatives were present to discuss an item regarding authorizing execution and delivery of a tax incentive financing agreement for Performance Food Group.
Brian Connors from the Office of Planning and Economic Development explained that this is for an expansion of 117,000 square feet at their facility at 1 Performance Blvd. in the Smith & Wesson Industrial Park.
This is an investment of $31.7 million and it will create 350 new jobs with an average salary of $74,000 per person.
Connors described this as a “very significant” project for Springfield.
He went on to say that the company plans to use local hiring agencies like MassHire to focus on hiring Springfield and neighborhood residents.
Performance Food Group plans to use local labor to construct the facility as well.
Regarding the TIF, tax increment financing, Connors said this does not impact taxes being collected today.
“The existing facility — we will continue to collect full taxes on that throughout the TIF agreement. The TIF exemption schedule applies only to the expansion,” Connors said. “The exemption schedule averages 58% which is in line with previous TIFs that have been approved. Previous TIFs usually are five years but this goes 10 years because of the significant amount of private investment and job creation.”
Connors noted that they worked with Kathy Brown and the East Springfield Neighborhood Council, and have a letter of support from that neighborhood organization.
Recently, the Massachusetts Economic Assistance Coordinating Council approved the project, conditionally, upon City Council approval.
Tax and Business Incentives Vice President for Performance Food Group Tami Gardner shared more information on the company.
“We are a nationwide food distributor, distributing food and beverage and food service supplies to food service operators all across the United States,” Gardner said.
She shared, “The Springfield location is what we call a broad line distributor whereby they distribute a ‘broad line’ of products from mops to plates to custom cut meats. So, it’s a one-stop-shop for a food service operator.””
Performance Food Group has been an employer and a taxpayer in Springfield for over 50 years, supporting many local vendors and customers. This includes Frigo’s, Big Y, the Big E and the University of Massachusetts Amherst, to name a few.
Today, Performance Food Group employs 565 people — over 25% of whom are Springfield residents.
Currently, the company is funneling about $42 million a year into the local economy — in payroll — and with this growth, that will grow to $68 million.
Gardner said they have a “very diverse” and “inclusive” workplace, with six languages spoken within the facility.
Reaching capacity, Gardner said they have two choices. They can move — potentially out of the city — or expand in place. “Our preference is to expand, mostly because we have great associates that we want to keep and we have great highway access where we are,” she said.
She continued, “This expansion will give us about 50% more capacity.”
If approved, construction would start this spring and hopefully be complete by summer 2025.
Gardner reiterated Connors’ point about using local contractors for site work, plumbing, electrical, heating, ventilation and air conditioning.
“All taxes we pay today, we will continue to pay,” she added.
Over the term of the TIF, Performance Food Group will also use 100% abatement and will continue to contribute additional taxes — roughly $2.1 million in additional property taxes. Once the TIF is over, she estimates that the annual taxes will be a little over $1 million a year.
“We believe the project’s a win-win for us and a win-win for the city,” Gardner said.
City Councilor Brian Santaniello said he loved the idea of this project and the number of employees it will continue to hire. He shared that he would like to see more local people hired so that they can keep that money within the community and provide financing for homeownership in the city of Springfield. Gardner said they expect it to.
When it came time to vote on the item, the council unanimously approved it.
Fair Share Amendment funds
The City Council also approved $1.6 million of Fair Share Amendment funds for the repair of several streets within the city.
Department of Public Works Director Chris Cignoli said in November 2022, Massachusetts residents voted in the Fair Share Amendment that puts a 4% surtax on taxable income over $1 million. At that time, former Gov. Charlie Baker said the money that was brought in would be split between transportation and education.
In December 2023, municipalities were notified that the state was using $100 million of that for transportation purposes and distributed money on Chapter 90 calculations.
The city of Springfield received over $1.6 million. That money is being placed in the Chapter 90 account.
At this point, Cignoli said his goal is to use that money for paving.
He noted that he expects to receive the Chapter 90 letter in February. Once that letter is received, Cignoli will share with the council what he expects the paving program to be.
“I anticipate this year that our paving program will probably be about $5 million, with the money we will get from Chapter 90 and these funds and some other programs they have funds for. Once the list is finalized, it will be shared, most likely in March,” he said.
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