Public hearing set as Ann Arbor considers $85K tax break for Barracuda Networks expansion
The Ann Arbor City Council will hold a public hearing on Aug. 9 to receive comments on a proposed tax break to facilitate the expansion of Barracuda Networks.
The company is planning to move into the former Borders book store location downtown and is hoping for establishment of an industrial development district, which would result in a five-year tax abatement from the city of Ann Arbor totaling $85,150.
The city's administration said the abatement is key to keeping Barracuda downtown, as the company has other options and could realistically expand elsewhere.
Melanie Maxwell | AnnArbor.com
The Barracuda project has been in the works for a while, but it was kept confidential until the Michigan Economic Development Corporation's Michigan Strategic Fund board on June 27 approved a $1.2 million incentive to assist with the company's expansion.
That requires a move from the company's current location on Depot Street to space at 317 Maynard. Barracuda has 148 employees and has committed to the MEDC to add 178, according to an email City Administrator Steve Powers sent to council members.
Barracuda will lease the space at 317 Maynard St., which is located at the rear portion of the building that previously housed Borders and is owned by First Martin Corp.
City records show John Teeter of First Martin, an agent for 317 Maynard LLC, submitted paperwork to request the industrial development district's creation on June 1. State records show 317 Maynard LLC was formed by Bill Martin weeks earlier on March 16.
Under Public Act 198 of 1974, the City Council has the authority to establish industrial development districts in the city.
The establishment of an industrial development district would result in an abatement of about 40 percent of the taxes the company would have to pay for five years, or an estimated $85,150 savings. After the five-year period, the full taxes would be paid to the city.
Powers said First Martin is requesting the five-year abatement to help with the cost of renovating the space for the Barracuda expansion.
Barracuda is based in Campbell, Calif. The private company creates network security devices, provides email and web filtering products and phone system solutions, and monitors network attacks from its Ann Arbor office. It has more than 1,000 employees globally.