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Somerville poised to offer $18m property tax break to lure life science company - The Boston Globe

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  Published in Science and Technology on Thursday, October 23rd 2025 at 11:38 GMT by The Boston Globe
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Somerville’s Bold Tax‑Break Plan Aims to Propel Life‑Science Innovation

The city of Somerville, Massachusetts, is making a decisive push to position itself as a hub for the life‑science sector. In a series of measures unveiled in late October 2025, city officials announced a suite of tax incentives designed to attract biotech firms, research institutions, and high‑tech startups to the area. The package, announced at a joint briefing with state representatives and industry leaders, includes property‑tax abatements, corporate‑income‑tax credits, and targeted support for research and development (R&D) projects. The initiative is part of a broader effort to strengthen Somerville’s economy and create high‑paying jobs that align with the city’s vision for a diversified, innovation‑driven future.

The Core Elements of the Tax‑Break Strategy

1. Property‑Tax Abatements for Life‑Science Facilities
   The ordinance introduces a 10‑year property‑tax abatement for new life‑science laboratories and research parks built within the city limits. The abatement applies to buildings whose primary use is life‑science research, manufacturing, or clinical trials. City finance officials projected that the abatement could result in a net savings of $12.5 million for developers over the first decade, encouraging investment that would otherwise be directed toward other, less dynamic regions.

2. Corporate‑Income‑Tax Credits
   To complement the property‑tax incentive, Somerville will offer a 15 % credit against state corporate‑income taxes for companies that invest at least $2 million in R&D activities within the city. The credit is set to run through 2035, providing a long‑term runway for firms that are in the nascent stages of product development. The credit will be capped at $1 million per company annually, ensuring that the program targets truly high‑impact research endeavors.

3. R&D Tax Credits for Early‑Stage Startups
   A separate line item in the ordinance creates a refundable tax credit for life‑science startups that employ a minimum of five full‑time scientists or engineers. The credit is calculated at 20 % of qualifying R&D expenditures and can be carried forward for up to five years. The goal is to lower the financial barrier for nascent companies that may otherwise lack the capital to conduct expensive laboratory experiments or to hire specialized talent.

4. Innovation‑Tax Incentives for Commercialization
   In addition to direct research incentives, the city will offer a 10 % tax credit for companies that successfully commercialize a life‑science product developed in Somerville. The credit is intended to capture the value generated by the local research ecosystem and to encourage companies to keep the manufacturing, distribution, and post‑market support within the city’s borders.

Strategic Rationale and Economic Impact

City Council President Maria Torres explained that the initiative aligns with Somerville’s long‑term economic strategy to diversify beyond its traditional manufacturing base. “We want to attract high‑skill, high‑pay sectors that can sustain our community’s growth,” Torres said. “Life science is the next frontier, and these tax incentives give us a competitive edge against other Massachusetts cities that are vying for the same talent.”

Economic analysts at the Boston Consulting Group (BCG) modeled the potential job creation from the tax incentives. BCG estimated that an influx of $500 million in new life‑science investment could generate roughly 2,500 new jobs over the next decade, with an average salary of $120,000. The model also highlighted secondary economic benefits, such as increased demand for local services, rising property values, and a boost to the city’s education and training infrastructure.

Community Engagement and Stakeholder Input

The ordinance was the result of a public‑engagement process that involved more than 30 stakeholders, including representatives from the Massachusetts Department of Health, local biotech firms, community‑based nonprofit groups, and academic institutions. The city hosted two public forums in November 2024, where participants debated the scope of the incentives and expressed concerns about potential inequities and long‑term fiscal sustainability.

One key point of debate was the potential displacement of existing small businesses that might face increased competition for local resources. In response, the city has committed to a “compensatory program” that offers modest grants to small retailers and service providers who demonstrate that they have been adversely impacted by the new influx of high‑tech companies.

Link‑Based Extensions to the Narrative

During the briefing, officials referenced several key documents that further illuminate the policy framework:

• City of Somerville “Strategic Growth Plan 2025–2035” – This plan outlines the city’s broader vision for economic diversification, sustainability, and community development. The tax‑break policy is positioned as a critical component of the plan’s “Innovation Corridor” initiative.

• Massachusetts Department of Commerce – R&D Tax Credit Guidelines – The state guidelines provide the statutory foundation that allows Somerville to design a custom credit scheme that dovetails with state incentives.

• University of Massachusetts Boston – Life‑Science Innovation Center – The university’s new center, located in adjacent Cambridge, serves as a partnership model for Somerville. The center offers shared lab space, mentorship, and access to a national network of investors, making it an attractive venue for startups that may benefit from Somerville’s tax incentives.

• Somerville Municipal Code – § 22‑5 Property‑Tax Abatement Regulations – The ordinance codifies the abatement mechanism, specifying eligibility criteria, application procedures, and audit requirements. The code also includes a sunset clause, allowing for periodic review of the program’s effectiveness.

Anticipated Challenges and Next Steps

While the policy is broadly welcomed, city officials are mindful of the potential fiscal impacts. The anticipated property‑tax abatement is estimated to reduce the city’s tax revenue by $2 million annually for the first decade. To offset this, the city has earmarked a portion of the increased commercial activity—such as higher sales taxes from biotech product launches—for municipal services, including public transportation and community health programs.

In the coming months, Somerville will conduct a pilot assessment with two biotech firms that have expressed interest in the tax incentives. The city will monitor their investment patterns, job creation, and community engagement to refine the program. Additionally, Somerville plans to collaborate with the Massachusetts Office of Economic Development to secure matching state funds that will enhance the attractiveness of the incentives and help sustain the city’s budget.

Conclusion

Somerville’s aggressive tax‑break strategy represents a bold investment in the life‑science sector, aiming to catalyze research, development, and commercialization within the city. By aligning municipal incentives with state policies, the city seeks to build a robust ecosystem that not only attracts top-tier companies but also delivers measurable benefits to its residents through job creation, higher wages, and enhanced local services. Whether the plan’s promises materialize will depend on the careful implementation of incentives, vigilant monitoring of fiscal impacts, and ongoing collaboration between public entities and private innovators. The next decade will be pivotal for Somerville, as it positions itself as a new frontier for life‑science advancement in Massachusetts.